FERC grilled on project reviews

Jun 24th, 2019

Members of the US Federal Energy Regulatory Commission were called before the US House Energy and Commerce Committee’s Energy Subcommittee on June 12 to answer questions about whether FERC’s reviews of oil and gas transportation projects adequately addressed potential environmental and other consequences.

“This is particularly concerning because FERC seems more than willing to approve any pipeline even though the Natural Gas Act [(NGA)] directs the commission to only approve projects that are in the public convenience and necessity,” Rep. Frank Pallone Jr. (D-NJ), the full committee’s chairman, said in his opening statement.

Pallone also expressed concern that FERC looks at each proposed gas pipeline in a vacuum without regard to any other pipeline application. “This could result in two pipelines running right next to each other,” Pallone said. “I think we can all agree that’s just not a smart or responsible way of planning our system—particularly when people’s private property could be taken by a pipeline company.

“The bottom line is that this whole process needs a more thoughtful strategy of planning and broad-ranging analysis,” Pallone said.

Commissioner Bernard L. McNamee provided the fullest discussion of gas transportation project reviews in his written testimony. The US became a net gas exporter in 2017 for the first time in 60 years, and FERC plays a role in this under both Section 3 of the NGA and the National Environmental Policy Act, he said.

“After two years in which no new LNG project was approved, the commission now has approved—in a 3-month period—four [LNG] export projects, with a total estimated export capacity of 8 bcfd,” McNamee said.

FERC also has 10 LNG export applications pending before it, and four LNG export facility proposals are in the prefiling process, McNamee said.

Are changes needed?

McNamee said the commission also issued a notice of inquiry seeking stakeholder input on whether changes should be made in how it considers applications to build new gas pipelines and infrastructure.

It specifically asked if its methodology for determining (1) whether there is a need for a proposed project, including FERC’s consideration of precedent agreements and contracts for service as evidence of project need; (2) its consideration of the potential exercise of eminent domain and of landowner interests relating to a proposed project; (3) its environmental impact analysis; and (4) specific changes it could consider implementing to improve the efficiency and effectiveness of its processes.

FERC received nearly 3,000 comments in response, 2,300 of which were form letters and 700 were unique. “My colleagues, our staffs and staff of the commission program offices are working through these comments,” he told the subcommittee.

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