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FERC chair resignation may delay 4 projects; Spectra New England expansion OK’d

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FERC chair resignation may delay 4 projects; Spectra New England expansion OK’d

Resignation of former FERC chairman may hobble 4 major gas pipeline projects

The departure of former FERC Chairman Norman Bay could cause delay for months for four major natural gas pipeline projects at vulnerable points in their review, analysts said the day after Bay announced his intent to step down.

Bay's resignation, which he announced Jan. 26, will leave FERC with just two commissioners as of Feb. 3: acting Chairman Cheryl LaFleur and Commissioner Colette Honorable, both Democrats. Three commissioners are needed for the independent agency to establish a quorum to vote on orders, such as those to issue Natural Gas Act certificates for gas pipeline and LNG terminal projects. Much of the agency's business, including environmental reviews and construction authorizations of these projects, can continue without action from the commissioners.

Analysts from ClearView Energy Partners LLC, FBR & Co. and Washington Analysis LLC see the lack of a quorum affecting four significant gas pipeline projects, all involving the Marcellus Shale: DTE Energy Co. and Spectra Energy Corp's NEXUS project, as well as Energy Transfer Partners LP's Rover project to the west of the shale; Williams Cos. Inc.'s Atlantic Sunrise project on the southern edge; and National Fuel Gas Co.'s Northern Access 2016 project to the north. The analysts noted that a delay in approvals could delay construction schedules, which are often subject to tight windows because of environmental and wildlife conflicts. If the delay is substantial, the projects could miss their targeted in-service dates.

FERC approves Spectra's expansion project to New England

FERC approved Spectra Energy Corp's Atlantic Bridge natural gas pipeline expansion project, which will provide approximately 132,705 Dth/d of additional firm transportation to New England and Canadian markets.

The Jan. 25 FERC order granted authorization for the Algonquin Gas Transmission LLC and Maritimes & Northeast Pipeline LLC project, which involves new pipeline and compression facilities in New York, Connecticut and Massachusetts. The expansion project will allow for additional gas supplies to flow north from Algonquin's receipt points in New Jersey and New York and will enable Maritimes to provide 106,276 Dth/d of firm transportation service from Massachusetts. The project is estimated to cost approximately $451.8 million.

Northern Natural approved for new stage of Northern Lights gas expansion

FERC approved Northern Natural Gas Co.'s Northern Lights 2017 natural gas transportation project to provide additional winter peak-day firm service of about 76,000 Dth/d to residential, commercial and industrial customers.

FERC issued a certificate to Northern Natural, a Berkshire Hathaway Energy company, in a Jan. 30 order that included 15 environmental and construction conditions. FERC staff gave the Northern Lights 2017 project, part of a larger Northern Lights expansion project to upgrade the Northern Natural system over years, a positive environmental review in November 2016. Northern Natural applied for the project in June 2016.

Pipelines push for FERC approval before Feb. 3 deadline

Companies with pending natural gas infrastructure projects are pushing FERC to issue certificate orders before Commissioner Norman Bay's resignation on Feb. 3 likely leaves the commission unable to issue such orders.

Spectra Energy Corp and DTE Energy Co.'s NEXUS Gas Transmission LLC, Williams Cos. Inc.'s Transcontinental Gas Pipe Line Co. LLC, and affiliates National Fuel Gas Supply Corp. and Empire Pipeline Inc. all submitted requests asking FERC to grant Natural Gas Act certificate authorization for the NEXUS pipeline project, the Atlantic Sunrise project and the Northern Access 2016 project, respectively. The projects have all received a final environmental review from FERC staff and are awaiting a final decision from the commission.

If certificate orders are not issued prior to Bay's resignation, the projects might have to wait months until FERC regains a quorum, which could have even larger impacts on construction schedules. All three projects cited construction and preparatory activities such as tree clearing that must be performed within certain dates, some dictated by environmental mitigation measures and some by the projects' in-service deadlines.

FERC approves ETP's 1.1-Bcf/d San Elizario Crossing for service

FERC approved a request from Energy Transfer Partners LP's Comanche Trail Pipeline LLC to put in service the 1.1-Bcf/d San Elizario Crossing natural gas border-crossing pipeline project between Texas and Mexico.

Rich McGuire, director of the FERC Division of Gas - Environment and Engineering, gave Comanche Trail the authorization in a Jan. 27 letter. Connecting to the Comanche Trail interstate pipeline, the San Elizario project runs from San Elizario in El Paso County, Texas, to a new interconnect in Mexico.

FERC actions will not come to total standstill with just 2 commissioners, freeze

While the departure of former Chairman Norman Bay from FERC could leave the agency unable to vote out major orders for some time, the work of FERC staff will continue, including the issuance of letters and delegated orders that can be signed by a FERC staff member. In addition, sources indicate that FERC is looking at ways it can expand the authority it has delegated to staff.

In a statement issued late Jan. 27, acting Chairman Cheryl LaFleur said FERC "is working to get as many orders out as we can in the time we have left with a quorum." She also confirmed that the agency is evaluating "how best to do the business" after Bay's departure, and that "all existing staff delegations will continue." In addition, she said FERC will be posting a podcast on Jan. 30 offering more detail, "and I expect there will be still more to communicate on this in coming days."

LaFleur issued a separate statement addressing the regulatory freeze directive issued by President Donald Trump in a memo. She said FERC has reviewed the memo carefully, and to the extent that it applies to the commission, which is an independent agency, the triggering event described in the memo is the presence of an official designated by the new president.

Gas industry groups ask Trump to fill FERC seats

The Interstate Natural Gas Association of America and the Natural Gas Supply Association reached out to President Donald Trump to ask him to bring a quorum back to FERC.

INGAA President and CEO Don Santa asked in a Jan. 27 letter that Trump nominate candidates to fill vacancies at the commission as quickly as possible. The vacancies will soon grow from two to three. Hours after Trump named Commissioner Cheryl LaFleur as acting chairman on Jan. 26, replacing former Chairman Norman Bay, Bay announced his resignation. Bay's departure on Feb. 3 will leave FERC unable to vote out orders on things such as certificates for gas infrastructure projects, since the commission must have at least three members out of five for a quorum.