CERAWEEK: Glick says FERC permitting does not limit more LNG exports to Europe

FERC Commissioner Richard Glick has pushed back on the narrative that the agency's policies present an onerous barrier to the US sending more gas overseas to European customers.

Glick's comments on LNG projects, made March 10 at CERAWeek by S&P Global in Houston, came as GOP lawmakers and gas industry groups have called on the administration to expedite LNG project approvals and encourage US production to shore up energy security of the US and its allies in Europe.

"I don't think our regulations are going to inhibit Europeans receiving [US] natural gas," Glick said. "If anything, over the long run, it is going to facilitate a quicker process."

Some critics have characterized FERC's two recent policy statements on natural gas project reviews as multiplying uncertainties and chilling future investment in infrastructure projects, including the pipelines that would carry away gas from producing regions and serve LNG export terminals.

"FERC has never rejected an LNG project based on climate change [concerns]," Glick said. "I don't think there's a linkage between climate change and limitations on exports."

Under FERC's interim greenhouse gas policy approved Feb. 17, the commission will consider GHG emissions resulting from construction and operation of a project, and in many cases GHG emissions resulting from downstream combustion.

In one benefit for LNG producers, FERC said it will not consider the upstream and downstream emissions associated with export facility projects, a decision opposed by environmental groups.

Unused permits

As for the status of US LNG projects, Glick suggested that the ball is in the court of LNG developers who have applied for and received FERC permits but have not yet gone through with the projects.

Of the 18 LNG export projects that have sought out FERC approval, Glick said only nine have been built.

"That's something I think we need to take a look at: why haven't those other nine not been built yet?"

Higher global gas prices could be the incentive needed to shift the economics on constructing new LNG export terminals, with S&P Global Commodities Insights predicting in December that three to five additional LNG export projects will take FID in North America in 2022. James Huckstepp, head of EMA gas analytics at S&P Global Commodities Insights, said March 11 that proposed US LNG projects stand to benefit from European policy makers' ambitious plans to reduce reliance on Russian gas imports over the next decade.

The next wave of LNG export terminals has already commenced, with Venture Global's Calcasieu Pass shipping its first cargo on March 1. CEO Mike Sabel said in CERAWeek remarks March 9 that work had already begun on the developer's next US Gulf Coast LNG export facility, Plaquemines LNG.

Stakeholder engagement

Following stakeholder meetings CERAWeek, Glick noted various concerns raised by industry over the agency's new policies, including uncertainty over its possible regulation of downstream greenhouse gas emissions.

In a March 11 interview with S&P Global Commodity Insights, Glick said is an aspect of the policies in which FERC heard concerns from a number of companies and "we probably need to further clarify. I think there was some other language in there that confused people," he said. "We are not going require mitigation of downstream emissions." Such clarifying might go some distance toward easing pipeline company fears they would have to mitigate emissions associated with combustion.

Glick's comments on LNG projects come as GOP lawmakers and gas industry groups have called on the administration to expedite LNG project approvals and encourage US production to shore up energy security of the US and its allies in Europe.

"I don't think our regulations are going to inhibit Europeans receiving [US] natural gas," Glick said March 10 at CERAWeek. "If anything, over the long run, it is going to facilitate a quicker process. I think there was some other language in there that confused people," he said. "We are not going require mitigation of downstream emissions,"

Glick positioned the agency's greenhouse gas emissions analysis as a potential protective boon to gas pipeline developers, by acting as a bulwark against later court challenges.

"From our perspective, we try to provide a more legally durable approach," Glick said.

MVP legislation

Atlantic Coast Pipeline – now cancelled—and Mountain Valley Pipeline are examples of proposed gas pipelines that could have benefited from more thorough vetting by FERC prior to receiving approvals, the FERC commissioner said.

In the case of the MVP project, FERC had approved the project, but it later got bogged down in court challenges over other permits related to the Forest Service and the Interior Department.

Notably, Senate Energy and Natural Resources Chairman Joe Manchin, West Virginia, said March 10 he was preparing legislation to help free the MVP project from regulatory setbacks.

"It would add 2 Bcf/d into the market for domestic use for export ahead of next winter when we'll all need it the most," Manchin said, during a Senate Energy and Natural Resources Committee hearing, on energy security implications of US policies in light of the European energy crisis.

The mainline MVP project has faced myriad legal stumbles, with the 4th UC Circuit Court of Appeals recently invalidating federal authorizations from the Interior Department and US Forest Service for a second time. Also outstanding are water crossing authorizations from the US Army Corps of Engineers. FERC has been urged by environmental groups to issue a broad stop-work order following the court action.

Separately, former FERC Chairman Neil Chatterjee continued to cheer on the pressure over FERC's new permitting policies. He said on Twitter March 10 that if Senate Republicans can force even a symbolic floor vote it could add leverage on FERC's direction.