US House subcommittee examines gas pipeline permitting delays

May 14, 2015
Reforms should be considered to ease delays that have developed for interstate natural gas pipeline projects requiring federal permits, two witnesses told a US House Energy and Commerce subcommittee. But a third warned that trying to facilitate approvals is unnecessary and could jeopardize protections for states under three major federal statutes.

Reforms should be considered to ease delays that have developed for interstate natural gas pipeline projects requiring federal permits, two witnesses told a US House Energy and Commerce subcommittee. But a third warned that trying to facilitate approvals is unnecessary and could jeopardize protections for states under three major federal statutes.

The committee’s Energy and Power Subcommittee held the hearing to consider draft legislation that would require the US Federal Energy Regulatory Commission, as lead permitting agency under the 2005 Energy Policy Act (EPACT), to identify all agencies considering aspects of an application and establish a review schedule, including a deadline for a final decision.

Cooperating agencies would be required to conduct reviews concurrently and identify any issues that might delay or prevent meeting FERC’s established schedule. Under this section, FERC could let an applicant fund a third-party contractor or FERC staff’s assistance in reviewing the application. FERC also would be required to track, and publicly post on its web site, information related to pipeline project reviews requiring multiple federal authorizations.

The federal approval process for interstate gas pipelines has not kept pace with the dramatic increase in domestic production, Subcommittee Chairman Ed Whitfield (R-Ky.) said in his opening statement. “A December 2012 study by the INGAA Foundation found that delays of more than 90 days have risen 28% after EPACT’s permitting reforms, while delays of 180 days or more have risen 20%,” he noted.

But Frank Pallone Jr. (D-NJ), the full committee’s ranking minority member, said the draft was simply another solution in search of a problem, since FERC has said it completes 91% of the gas pipeline project applications it reviews within a year. The proposal would simply impose “a laundry list of prescriptive, duplicative, and potentially harmful requirements on FERC and every agency involved in the permitting process,” he said.

‘Hit a bottleneck’

Maine Gov. Paul R. LePage (R) said New England has grown increasingly dependent on gas in the last 15 years. Its production of electricity from gas increased from 15% of total supply in 2004 to 44% in 2014, but its gas infrastructure has not kept up, he said in his written testimony.

“Transportation of gas from the west to east hit a bottleneck that winter, causing prices to spike from $3/MMbtu to nearly $20/MMbtu,” LePage said. “Prices in New England were the highest in the world, despite the fact that the most prolific gas production on the planet is less than a day’s drive away.” Maine has lost two major manufacturers and seen electricity bills spike to an average 17.34¢/kw-hr since the bottleneck appeared 2 years ago, he said.

LePage said the draft legislation before the subcommittee would help modestly. “There are major projects proposed in New England to bring gas to households and employers. Federal law should reflect that these pipeline projects are critical to our economy, and there should be one lead agency that has the clear authority to coordinate the review of the projects,” he said.

“It makes no sense that it should take 3-5 years to construct a pipeline, especially when the economic consequences are massive,” he said.

Approval and permitting for interstate gas pipelines has become more challenging, Interstate Natural Gas Association of America Pres. Donald F. Santa said in his written testimony.

“What was once orderly and predictable has become increasingly protracted and contentious,” he said. “We need a process that balances thorough environmental review and active public involvement with orderly, predictable, and timely approval and construction of necessary energy infrastructure.”

The draft bill would modestly improve the permitting process by introducing more transparency and accountability for federal and state permitting agencies, Santa said. “We support these steps, but continue to urge Congress to create real consequences for agencies that fail to meet reasonable deadlines,” he said.

Unnecessary and risky

But Carolyn Elefant, a lawyer who also is a Pipeline Safety Coalition board member, said the draft legislation was not necessary and could lead to unintended conflicts. “There is little evidence to suggest that state and federal permitting agencies are responsible for delays in the development of pipeline infrastructure,” she said in her written testimony.

To the extent that they are, companies already have the right under the Natural Gas Act, as amended by EPACT, to sue in US Appeals Court for the District of Columbia to compel a dilatory state or federal agency to act on a permit, Elefant said.

She said the coalition also is concerned that the proposed legislation’s approach to expediting the permitting process would subordinate regulatory mandates of other federal agencies as well as state agencies implementing delegated authority under the federal Clean Air, Clean Water, and Coastal Zone Management Acts.

Ann F. Miles, who directs FERC’s Energy Projects Office, said in her written testimony that the draft bill would make several existing practices FERC already uses in working with other government agencies on interstate gas pipeline project applications requirements under the Gas Act.

“However, the proposed changes would move some activities to later in the process…thus lessening efficiency,” she said. “This would limit [FERC’s] flexibility to adapt its process to the unique circumstances of each project.”

Miles also said the proposed Gas Act modifications would change FERC’s role from one of collaboration with sister agencies to one of enforcement and oversight of those agencies’ execution of congressionally mandated duties. “I am concerned that this will require the use of commission resources that could be better spent analyzing proposed projects, and could lead to unproductive tension between the agencies involved in the review process,” she said.

The hearing also examined proposed legislative changes to the federal hydropower authorization process which the subcommittee’s majority said also has become lengthy with overlapping and duplicative requirements under other federal laws.

Contact Nick Snow at [email protected].