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FERC will not alter pipe reviews after court, state challenges, chairman says

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Essential Energy Insights - February 2021

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Six trends shaping the industries and sectors we cover in 2021

Six trends shaping the industries and sectors we cover in 2021


FERC will not alter pipe reviews after court, state challenges, chairman says

The chairman of the Federal Energy Regulatory Commission said his agency will not adjust its reviews of interstate pipelines even after recent court and state decisions introduced uncertainty into the federal process for natural gas infrastructure.

Chairman Neil Chatterjee said he could not talk about what FERC might do legally to respond to an adverse decision by the U.S. Court of Appeals for the District of Columbia Circuit in August that vacated approvals for a Florida pipeline project, but he said the commission would not alter the way it evaluates pipeline projects.

"The week that court decision came down, we authorized the Nexus pipeline," Chatterjee said during an Oct. 13 meeting with reporters at FERC headquarters in Washington, D.C. "In many ways, that approval anticipated the court's arguments in the Southeast/Florida case and addressed [them]. That is an example of how we will continue with our processes."

In an Aug. 22 decision, the D.C. Circuit vacated the FERC approvals of the Southeast Market Pipelines project components and asked the commission to perform an extra analysis of greenhouse gas emissions from Florida power plants at the southern end of the pipeline system. In asking the commission to evaluate emissions from the burning of gas by downstream customers, the court pushed the commission into new territory. FERC does not normally evaluate the environmental effects of upstream natural gas production or downstream consumption in its environmental reviews of pipelines.

When asked about New York permitting decisions that have either stopped or delayed FERC-approved gas pipeline projects, Chatterjee reiterated that FERC has statutory guidelines and said, "we will continue to follow our processes."

Some FERC observers expected the commission to adjust environmental reviews to withstand litigation and delay after the strikes against the commission's authority. The Sierra Club, one of the parties that asked the D.C. Circuit to review the FERC approvals, used the Southeast Market Pipelines decision in the following weeks to challenge several other projects.

A former FERC commissioner and attorneys said the ruling threatened the commission's pipeline review process, and some thought the commission might appeal the decision to prevent a permanent expansion of its environmental reviews. FERC performed the required emissions analysis in a few weeks, and then in an Oct. 6 petition, it asked the D.C. Circuit to adjust the Aug. 22 decision so that it did not vacate the commission approvals. (U.S. Appeals Court for the D.C. Circuit dockets 16-1329, 16-1387)

Chatterjee said he was open to changes in FERC processes that could speed up reviews for developers. Republican congressional leaders have tried to streamline reviews of proposed pipelines and LNG export terminals. Such streamlining changes are mostly based around making other agencies more responsive to FERC deadlines in the review process.

"This is something that is frustrating for stakeholders around the country," he said. "A process that used to take 11 months to a year is now taking three years in some instances. I think that is a challenge, and it is a problem."

Chatterjee said he hopes such streamlining efforts will "shave time off that process," but "also ensure that the process can withstand legal scrutiny and that we don't cut corners."