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FERC under pressure

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FERC under pressure

Pressure mounted on the Federal Energy Regulatory Commission with the announcement of the upcoming resignation of one of its Republican commissioners and signs of a shortage of resources for LNG applications.

Commissioner Robert Powelson's resignation in August will temporarily eliminate the panel's Republican majority, turning a party-line divide within the commission into an obstacle that could start to affect the chances of U.S. interstate natural gas infrastructure projects getting a federal permit.

His departure evens things out between Republicans and Democrats at FERC, which, at capacity, has five commissioners. The two Democrats, Cheryl LaFleur and Richard Glick, have dissented on several orders involving Natural Gas Act certificates for pipeline projects due to concerns about the way the commission evaluates greenhouse gas emissions, other environmental impacts and public need for projects. LaFleur and Glick have repeatedly said the commission ought to take a broader and deeper view of pipeline projects by looking at impacts from related upstream and downstream activities or by using more than promises of customer contracts to establish need.

So far, the dissents have been little more than political statements, overcome by a majority composed of Chairman Kevin McIntyre and commissioners Neil Chatterjee and Powelson, all Republicans. Powelson's departure could turn a FERC vote into a tie in some pipeline review dockets.

"There are clearly two sides on pipeline approvals now, and a fifth commissioner will be needed to break that logjam," Washington Analysis LLC energy analyst Rob Rains said.

In another move by a FERC commissioner, Chatterjee launched a series of posts on social media to make a public plea for resources that would allow the agency to process more applications for U.S. LNG export projects.

Chatterjee made his case in a string of tweets late in the day July 2. He said the commission had done a good job moving forward pipeline projects that will provide significant new transportation capacity, much of that accomplished after FERC regained a voting quorum in 2017 when Chatterjee served as interim FERC chairman. "But there are some areas where we can and should do better — specifically our review of LNG export terminal applications," he tweeted. "We need more resources!"

Chatterjee said FERC needs more staff, especially engineers and attorneys, to handle the work of reviewing LNG export project applications. He said there are 13 applications pending at FERC that represent more than 23 Bcf/d of natural gas export capacity, and several more projects are in an earlier review stage. Some of the applications have been waiting at FERC since 2015, he said.

"FERC's world-class staff is burning the midnight oil reviewing those applications," he said. "But FERC staff also has to oversee existing LNG export terminals. They're stretched to the max!"

Chatterjee said gas export projects create thousands of jobs in the U.S. and are critical to supporting the country's geopolitical interests.

In the courts, FERC decided not to challenge in the U.S. Supreme Court a federal appeals court order that had directed the commission to extend its analysis of greenhouse gas emissions.

In March, a divided FERC reissued the authorizations for Sabal Trail and the other components of the Southeast Market Pipelines project after the U.S. Court of Appeals for the District of Columbia Circuit vacated the authorizations in August 2017. Agreeing with the Sierra Club and other project opponents, the D.C. Circuit had faulted the FERC environmental review for a lack of analysis of greenhouse gas emissions from power plants at the downstream end of the pipeline system and remanded the case to the commission to add the analysis.

The decision pushed FERC to expand its carefully delineated approach to measuring the climate impacts of individual gas infrastructure projects, and some observers had expected the commission to turn to the Supreme Court to undo the precedent.