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Chatterjee suggests action on LNG depends on compromise or new commissioner

Federal Energy Regulatory Commission Chairman Neil Chatterjee hinted that the agency will have to tackle different opinions on whether to expand consideration of the potential impacts of greenhouse gas emissions in reviews of LNG terminals and gas pipelines before making final decisions on those kinds of projects.

The alternative to a compromise could be waiting for a full complement of commissioners, and even then, a fractured commission could lead to trouble in cases where FERC orders go to federal court. The Jan. 2 death of Republican Commissioner and former Chairman Kevin McIntyre returned the commission to a 2-2 split between Republican and Democratic members on certain contentious issues, such as the commission's approach to assessing climate change impacts or public need for gas infrastructure projects.

In comments to reporters following a Jan. 17 FERC meeting, Chatterjee declined to specifically address FERC's delayed action on Venture Global LNG's proposed Calcasieu Pass LNG terminal and a small pipeline project, citing FERC policy to not comment on matters pending before the commission. But the delays have signaled that Chatterjee might lack the votes to advance major gas projects amid the rift between Republicans and Democrats.

"These are complex things," Chatterjee told reporters. "The courts have made some decisions that have added complexities to our consideration, and I want to ensure, as does everyone in this building, that our orders and approvals are legally durable. And that takes time. And so we just want to make sure we get it right."

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FERC Chairman Neil Chatterjee

Source: Federal Energy Regulatory Commission

The only certificate order FERC approved during the meeting was a small natural gas pipeline replacement project in West Virginia and Maryland on the Columbia Gas Transmission LLC system.

Democrat commissioners Richard Glick and Cheryl LaFleur have repeatedly called for expanding consideration of the potential impacts of greenhouse gas emissions as part of the agency's review of gas projects. Among other reasons, they have said doing so would fix a narrower analysis that allowed a federal appeals court to overturn FERC authorizations in a landmark pipeline case.

"So far, Chairman Neil Chatterjee has resisted this push to modify FERC's analysis," research firm Washington Analysis LLC said in a Jan. 10 note to clients. "We question how long he can resist this effort."

Chatterjee had spiked a scheduled vote on Calcasieu Pass and a small pipeline project in December 2018, when only Chatterjee and the two Democrats on the commission were set to cast votes. The items were left off the agenda of the latest meeting.

LaFleur is seen as the swing vote. She had supported many FERC approvals of LNG export projects and pipeline projects in the years before the federal appeals court decision and before Glick's arrival at the commission. But she has not always joined her fellow Democrat in dissents on gas project votes, in some cases signing off on projects after considering greenhouse gas emissions on her own.

Asked by reporters Jan. 17 what was restraining him from bringing LNG projects to the commission for a vote, Chatterjee said each of the four commissioners wants to ensure that projects they approve will hold up in court.

"The most disruptive thing would be if a court were to later intervene and potentially stay a project," Chatterjee said. "And so we are all working together hard to ensure that when and if we do approve a project, that it can withstand legal scrutiny."

Chatterjee also emphasized that considering and permitting LNG projects remains one of his top priorities for FERC, and he reiterated his preference for a unified commission.

"FERC speaks loudest when it speaks with one voice and strongest when it has its full complement of five commissioners," Chatterjee told reporters. "So obviously it's my strong preference to have a full complement of five commissioners, but that is outside of our control here. And so we are going to continue to plow ahead on these myriad initiatives and let nomination and confirmation process play out on its own."

Meanwhile, it remains unclear whether FERC will accommodate Venture Global's recent plea to approve the Calcasieu Pass project by Jan. 22. FERC can approve projects outside of the monthly public meetings and can also vote on items added to a public meeting agenda just before the meeting starts.

Venture Global filed an "urgent request for commission action" Jan. 15. The LNG developer took the Jan. 22 date in its request from a schedule published in August 2018 by FERC, which said it expected to issue a final order by that time. The project, with a production capacity of up to 10 million tonnes per annum of LNG, is considered one of the front-runners among second-generation U.S. LNG export projects seeking final investment decisions in 2019.

"We have made very significant financial commitments to our vendors and suppliers, acting in reliance on the expectation that the commission will act on a timely basis in accordance with its public pronouncements and the established schedule," Venture Global wrote. "It is imperative that the commission do so."

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