Senator reintroduces bill to strip FERC of LNG terminal authority

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Mar. 5 -- Saying that states should have the final say on LNG terminals, Ron Wyden (D-Ore.) and four other US Senate Democrats reintroduced their bill on Mar. 2 to strip the Federal Energy Regulatory Commission of that authority, which it received under the 2005 Energy Policy Act.

“Oregonians have said time and again that they don’t want some federal agency 3,000 miles away forcing LNG terminals on them,” said Wyden, who introduced an identical bill in 2009. “I’m not going to stop until [they] get to decide whether or not they need LNG terminals and, if they do, where to put them.” The bill’s cosponsors include Marie E. Cantwell (Wash.), Benjamin L. Cardin (Md.), Christopher Dodd (Conn.), Barbara Mikulski (Md.), and Jeff Merkley (Ore.).

The Natural Gas Council, whose members represent each stage of the industry, said on Mar. 3 that approving the measure, S. 3056, would be a mistake. “Natural gas infrastructure of national importance needs a national focus when it comes to approval, siting, and regulation,” said Donald F. Santa, president of the Interstate Natural Gas Association of America.

“The United States has developed an open, competitive and market-responsive natural gas industry over the last 70 years, in large part because of a regulatory environment that stresses the national public interest. We shouldn't turn away from a policy that has served the nation so well,” he maintained.

R. Skip Horvath, president of the Natural Gas Supply Association, noted that EPACT Section 311 clarified that the federal government should have the final say on approval and siting of gas facilities engaged in interstate and foreign commerce consistent with the US Constitution’s Commerce Clause.

States’ continuing role
Horvath said, “The states continue to have a role in the permitting of LNG facilities through such statutes as the Coastal Zone Management Act, the Clean Air Act, and the Clean Water Act, and they have the authority to block a specific LNG facility under existing law. Overall approval and siting of these facilities, on the other hand, should remain the exclusive authority of the federal government.”

State-by-state determinations of these national energy policy questions could lead to dysfunctional outcomes, suggested Bill Cooper, president of the Center for Liquefied Gas, an associate member of the council.

“The sponsors of S. 3056 would take us back to the days of the Articles of Confederation, which could lead to states enacting conflicting regulations that thwart interstate and foreign commerce, to the detriment of our economy,” he said. “That formula didn't work in the 18th century, and it sure won't work in the 21st century. The nation needs new energy infrastructure to remain globally competitive.”

The American Gas Association, which represents utilities and local distribution companies, is also a member of the NGC, but did not issue a statement on the matter.

Contact Nick Snow at nicks@pennwell.com.

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