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Gas pipe safety rule could prompt FERC rate reviews; Earthjustice challenging FERC in 2 big cases

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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

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Essential Energy Insights - January 2021


Gas pipe safety rule could prompt FERC rate reviews; Earthjustice challenging FERC in 2 big cases

Therecently proposednatural gas transmission pipeline safety rules may lead operators to bring ratecases at FERC, a legal expert said.

Newlyissued regulatory requirements from the U.S. Pipeline and Hazardous MaterialsSafety Administration would increase costs for the — between $39.8 million and$47.4 million annually, according to PHMSA — which operators would likely wantto pass along to their shippers, Gregory Wagner, special counsel with BakerBotts LLP, said in a March 24 interview.

Earthjusticeintends to put heavy pressure on FERC in federal court in 2016 as theorganization pushes the commission to overhaul the permitting process fornatural gas infrastructure to focus more on climate impacts.

Inthe coming months, Earthjustice will challenge two FERC approvals, for 's export terminal and onefor the Constitution Pipeline LLC project.

FERCstaff plans to issue in May an environmental assessment for a expansion projectthat would provide an additional 132.7 million standard cubic feet per day ofnatural gas to customers in Massachusetts, Maine and Canada.

In aMarch 25 notice of schedule, FERC staff said it intends to complete theenvironmental assessment, or EA, for the Atlantic Bridge project May 2. Otherfederal agencies cooperating in the review would then have 90 days to completetheir own work, until July 31.

FERCdenied New York state requests to halt construction on 's AIMnatural gas pipeline project over state concerns related to the Indian Pointnuclear power plant. FERC said it and the U.S. Nuclear Regulatory Commissionhad thoroughly reviewed the situation before FERC approved the pipeline.

FERCdenied the New York State Department of Environmental Conservation's for a stay and itsrequest for reconsideration of the certificate order approving AIM, theAlgonquin Incremental Market expansion project. Algonquin Gas Transmission is aSpectra Energy Partners LPsubsidiary.

Discoveriesof oil and gas in new regions in the U.S. typically bring the need foradditional pipelines to take the resources to market. But with natural gasproduction booming in the past 10 years, industry experts believe thatincreased use of gas for power generation and deference by regulators mayresult in a potential overbuild of pipeline infrastructure.

Thenumber of interstate natural gas pipelines and compressor stations that havebeen proposed and approved in recent years is growing.

"In2014, there were 26 pipelines that were approved and then an additional 20 thatwere proposed," Carolyn Elefant, a private attorney that representsimpacted communities during the pipeline conception process, said at aconference held by the Institute for Energy Economics and Financial Analysis onMarch 15. "In 2015, there were 54 pipelines proposed and 30 that wereapproved. There are definitely many more cases."

FERCstaff issued a positive draft environmental impact statement for the GoldenPass LNG export project in Jefferson County, Texas, on March 25.

"Weconclude that, if constructed and operated in accordance with applicable lawsand regulations, Golden Pass' proposed mitigation, and our recommendationspresented … the project would result in some adverse environmental impact;however, those impacts would not be significant," stated the draftenvironmental impact statement.