FERC acts to allow gas project construction even if project is in court

The US Federal Energy Regulatory Commission (FERC) can authorize natural gas project construction even in the face of ongoing legal challenges under new orders issued June 18.

The commission also expanded the number of natural gas projects eligible for streamlined permitting by increasing the cost threshold for projects eligible for blanket certificates by over 50%.

Development for demand

FERC said the moves were necessary to expedite natural gas infrastructure development.

“As the demand for electrical power continues to grow, getting more natural gas generation built is critically important and that means we must get natural gas infrastructure to supply that generation built more quickly as well, so that we can provide consumers with reliable power,” FERC Chairman Mark Christie said in a statement.

The 1-year waiver of Order No. 871 could save natural gas project developers about 150 days to complete projects and reduce their costs because FERC will no longer block construction if a project’s certificate is pending legal action. The move will “eliminate delays in, and use lawful emergency authorities to expedite, the development of energy infrastructure,” FERC said in the order.

During the waiver period, FERC is seeking public input on its proposal to permanently remove the section.

Meanwhile, the new blanket-certificate policy allows FERC to grant routine pipeline construction, modification, acquisition, operation, and abandonment activities for projects costing less than $62 million without needing a specific case-by-case certificate for each activity.  The previous cost threshold for no-notice certificates was $41 million.

Blanket authorizations limit opportunities for public protests, public review, and landowner notifications and allow the sponsor to streamline its FERC application.

While new cost limits apply only to projects constructed and placed in service by May 31, 2027, FERC also issued a Notice of Inquiry to determine if a permanent revision is warranted. FERC last evaluated the cost thresholds for the blanket certificate in 2006.

Both orders come at the request of the Interstate Natural Gas Association of America (INGAA), which represents interstate natural gas pipelines.

“There is widespread recognition that new natural gas infrastructure, as well as continued maintenance to ensure the integrity of the existing interstate natural gas system, are critical for the immediate term to help address pressing nationwide reliability and resource adequacy concerns,” FERC said in the order.

FERC said it was particularly concerned about near-term natural gas and electricity demand, which are both expected to grow rapidly in the period covered by the waivers. US natural gas demand is forecasted to average 98.7 bcfd in summer 2025, 1.7 bcfd more than summer 2024, and nearly 10% more than the previous 5-year summer average.

The US Energy Information Administration (EIA) estimates gross natural gas exports, including increased LNG exports and piped gas sent to Mexico, will average 15.5 bcfd in summer 2025, an increase of 3.2 bcfd from summer 2024, and 51% over the previous 5-year average, further tightening the market, FERC noted.