Better agency coordination needed for energy projects, senators told

March 20, 2017
The Trump administration will have only limited success in pursuing its ambitious US energy infrastructure improvements unless federal regulatory agencies do a better job coordinating their reviews of proposed transportation projects, witnesses told the US Senate Energy and Natural Resources Committee on Mar. 14.

The Trump administration will have only limited success in pursuing its ambitious US energy infrastructure improvements unless federal regulatory agencies do a better job coordinating their reviews of proposed transportation projects, witnesses told the US Senate Energy and Natural Resources Committee on Mar. 14.

"Coordination among several federal agencies is critical to the timely review of a project, and as designed today, the federal permitting process is challenging," said Dominion Energy Chief Executive Diane Leopold.

The Dominion Resources Inc. natural gas subsidiary has been in discussions with those agencies about its proposed interstate Atlantic Coast Pipeline (ACP) since May 2014, months before it filed an application for approval with the US Federal Energy Regulatory Commission the following September, Leopold told the committee.

"In addition, to facilitate interagency coordination, the [ACP] was placed on the FAST-41 list of high-priority, nationally significant projects. And to address agency resource constraints, Dominion has entered into cost-sharing agreements with the US Fish and Wildlife Service and National Park Service. As of this date, we are continuing to seek guidance from the agencies on a number of schedule-critical issues of great importance to the overall project schedule," Leopold said.

While virtually all of the 600-mile system will be underground, the ACP is taking extraordinary steps to protect views from the Blue Ridge Parkway and the nearby Appalachian Trail by boring under a mountain for nearly 1 mile using horizontal directional drilling, she said.

"This construction method, while…more costly, was selected precisely to ensure that there will be no surface disturbances, tree clearing, or interference with public access to the parkway or trail," Leopold said. "Even with this diligence, the Park Service took 14 months to review our 22-page application just to survey the area. Once permission was granted, the survey work was accomplished in one afternoon."

The approval did not address the extensive permitting review under way by the NPS for the crossing's actual construction permit, she added.

Nearly 10-year delay

PacifiCorp received a record of decision for its Gateway West electricity transmission expansion project on the Obama administration's final day in January, nearly 10 years after the initial application was filed in May 2007, said Stefan Bird, chief executive of the utility holding company's Pacific Power division.

"We kept having to refile as new policies and guidelines were rolled out," Bird said. "It would have made more sense if decisions could have been grandfathered and not subject to new conditions and requirements."

Schedule predictability is essential, with the greatest potential efficiency improvements coming from better permit application and coordination under the National Environmental Policy Act, Bird told the committee. Berkshire Hathaway Energy, PacifiCorp's parent, recommends focusing improvement efforts there, he said.

Laborers International Union of North America (LIUNA) Gen.-Pres. Terry O'Sullivan called for regulatory reforms that would streamline necessary review processes, allow reviews by separate agencies and entities to proceed concurrently, and make permitting processes more definitive so projects can be built without delay once all regulatory concerns have been addressed.

LIUNA also calls for the speedy filling of vacant spots at FERC so it has the quorum necessary to complete regulatory reviews and approvals in a thorough-and timely-manner, O'Sullivan said.

"Moving forward with a nonpartisan energy agenda will facilitate…private investment that will create millions of new jobs across…the economy. It is also critical to addressing and improving the vital energy infrastructure that keeps our lights on, that heats and cools our homes and businesses, and that moves people and goods across the country," O'Sullivan said.

"This infrastructure is in desperate need of repair and modernization," he said. "In its most recent report card on the state of America's infrastructure, the American Society of Civil Engineers gave our energy infrastructure a grade of D+."

Possible improvements

Leopold said sponsors of major energy transportation projects support and understand each federal agency's requirement for careful analysis to ensure the protection of the natural and cultural resources under its stewardship. Dominion Energy also believes the NEPA process undertaken by FERC and the interagency coordination called for in the FAST-41 legislation strive for project schedule coordination and timely reviews, she testified.

She said Dominion and other sponsors of major energy transportation projects also would like to see:

• Concurrent NEPA analysis and review of permits by FERC and other permitting agencies. "Given FERC's lead agency status for the NEPA review of interstate gas pipelines, it is essential that there be a predictable schedule followed by other agencies as they complete permit reviews required by other laws," Leopold said.

• A requirement for other permitting agencies to determine when an application is complete to ensure compatibility with FERC's timeline. "To ensure that an agency has ample time to review an application within the FERC schedule, such a determination should be made within a specific time period," she said. "This action would improve the transparency of the FERC permitting process and put the applicant on notice if its permit application was deficient."

• Stronger coordination of FERC's NEPA environmental reviews with cooperating agencies. Leopold said she sees a very real need to give meaning to the responsibilities of "lead agency" and "cooperating agency" so that all federal agencies work together efficiently for a robust environmental review. "It is equally important to ensure that once the NEPA process is completed and a review is issued, that other agencies use the information already contained in the NEPA document as the basis for permits required under other statutes," she noted.

In her opening statement, Committee Chair Lisa Murkowski (R-Alas.) said, "Energy infrastructure is central to our way of life and our standard of living, but it is almost always an afterthought-until it breaks down. We have seen that too often in recent years, making this a perfect time to look at our options to either rebuild or, in many cases, build energy infrastructure for the first time."

About the Author

Nick Snow

NICK SNOW covered oil and gas in Washington for more than 30 years. He worked in several capacities for The Oil Daily and was founding editor of Petroleum Finance Week before joining OGJ as its Washington correspondent in September 2005 and becoming its full-time Washington editor in October 2007. He retired from OGJ in January 2020.