Denying a report that the US Federal Energy Regulatory Commission notified LNG project sponsors that there would be a 12-18 month delay in processing applications, Chairman Kevin McIntyre said the commission has made significant strides “in reforming the permitting process in working with federal partners, eliminating duplicative processes, and streamlining procedures that will significantly reduce our LNG permitting timelines.”
The chairman said during a July 17 podcast, “The details are still being hammered out, but we expect to have a formalized agreement in place within the coming days.” In the last 6 months, FERC has issued revised notices of schedule for two projects, and one schedule for a greenfield project that is subject to Title 41 of the 2015 Fixing America’s Surface Transportation Act, McIntyre said. “FERC’s staff has not revised or released schedules for the remaining projects at this time,” he added.
FERC now has 15 LNG applications, the majority of which are for export projects. This compares with one application in 2011 resulting from dramatically higher domestic production and strong global demand, the chairman said.
“We are seeing evolution in the size and complexity of the projects as well. Further, we not only review these applications, but we also monitor the construction of these projects post-authorization,” he said. “Currently, the commission’s Office of Energy Projects staff is performing construction inspections for 6 authorized projects. So let me tell you what FERC is doing to address this rapidly increasing LNG workload.
“We are hiring additional LNG engineering staff. We have made offers to several talented LNG engineers. And we are looking for ways to attract additional LNG engineers. We are identifying additional opportunities to hire third parties to assist our LNG engineers,” McIntyre said.
FERC late last month sent letters to project applicants to solicit their interest in using third-party contractors in their requisite fire protection review process, the chairman said. “We also are looking at hiring third parties for construction inspections. And we have been in discussions with the Department of Energy’s Sandia National Laboratory to provide assistance with parts of our siting review,” McIntyre said.
“Consistent with our commitment to the One Federal Decision memorandum of understanding, we are coordinating with other federal entities such as the US Department of Energy and the Department of Transportation to improve coordination. We are confident that this will expedite completion of those entities’ roles in the LNG project application process,” he said.
“Lastly, we are taking a hard look at our internal FERC processes and have identified a number of changes we will implement going forward,” McIntyre said.
There is no enumerated priority list for these projects, and the commission does not show a preference for one over another, he emphasized.
“However, a number of factors can cause LNG projects to be processed by FERC staff at different speeds, including the varying complexity of the projects themselves, the completeness of the initial application, the need for FERC staff to request additional information, and the timeliness and completeness of the applicant’s responses and the degree to which other agencies act in a coordinated and timely manner,” McIntyre said.
Responding to the chairman’s comments, LNG Allies Pres. Fred H. Hutchison said that the group has been discussing the time FERC takes to consider LNG project applicants and is cheered by what McIntyre said.
“We are also pleased that the agency is taking other steps to reduce LNG review timelines including bringing on additional in-house and third-party resources and considering opening an office in Houston,” Hutchison said. “Technical expertise in LNG is a highly specialized discipline, and senior engineers command top salaries. We are heartened that the commissioners understand this reality and will continue to work with FERC to make sure that all pending and future LNG project applications can be reviewed as quickly as possible.”
