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US FERC chair sees plan on LNG permitting in days; LaFleur hopes for middle ground on pipes

Washington — US Federal Energy Regulatory Commission Chairman Kevin McIntyre said Tuesday that a formal agreement is likely "in the coming days" with other agencies to streamline permitting and trim LNG project review timelines.

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His comments come as industry and lawmakers have aired concerns that staff shortfalls at FERC could slow reviews even as US LNG export terminal developers are racing to line up offtake agreements and trade tensions are adding to their worries.

"In just the last few days we have made truly significant strides in reforming the permitting process with our federal partners, eliminating duplicative efforts and instituting a streamlined procedure that will significantly reduce our LNG permitting timelines," McIntyre said in a podcast released by the commission. "The details are still being hammered out, but we expect to have a formalized agreement in place in the coming days."

He denied a news report that FERC had told developers there would be delays of 12 to 18 months in LNG application reviews, saying FERC has issued no such letters.

INCREASED COORDINATION SEEN WITH DOE, DOT

While he did not release details of the upcoming process changes, he said FERC is working with the departments of Energy and Transportation to improve coordination, in line with the administration's memorandum of understanding encouraging one federal decision on permits. FERC is also taking a hard look at its own processes to find efficiencies, he said, and is working to hire more LNG engineers and to farm more out to third-party contractors.

Pushing back on the notion that FERC has been slow to release environmental review schedules for projects, he said FERC will not issue schedules until it has all the needed facts and has implemented its improved processes.

"FERC staff is very cognizant of the financial market impacts of its LNG project schedules," McIntyre said. The timing can be affected by such factors as project complexity, completeness of initial applications, and timeliness of response to requests, and FERC does not give preference for one project over another, he said.

With FERC soon faced with an even split of two Democrats and two Republicans, once Commissioner Robert Powelson leaves the agency in mid-August, it may also be experiencing pressure to act quickly on major policy questions before it, such as electric grid resiliency, review of the 1999 natural gas pipeline certificate policy and implementation of the Public Utility Regulatory Policies Act.

On those fronts, McIntyre cautioned that FERC takes its deliberative role "very seriously" and would air all issues before acting once it is ready.

IT WILL BE INCUMBENT UPON US TO SEEK MIDDLE GROUND: LAFLEUR

Separately, with the potential for 2-2 splits ahead, Commissioner Cheryl LaFleur on Tuesday indicated she hopes compromise can be reached in areas that have divided the commission in its natural gas pipeline certificate reviews.

Some analysts have pointed to the potential 2-2 split on pipelines as adding risk for pending natural gas project approvals.

"I think that it will be incumbent on us to try to find that middle ground," LaFleur said, speaking to reporters after an appearance at a Politico Pro Summit in Washington. "In my case, many of the pipelines I've written separately on I felt were ultimately in the public interest. I just took sharp issue with the way the commission did its review," she said. Perhaps there is room for compromise in those areas, she said. LaFleur has written dissents and concurring opinions faulting the majority for constraining the reach of its greenhouse gas emissions considerations as part of those reviews.

During her appearance at the Politico event, she said that on a broader range of issues, "we'll have to work harder to come to consensus on some of the hotly debated items" before the commission.

One of the hot button topics potentially in FERC's orbit is a Department of Energy effort to help stem coal and nuclear plants' retirements that the administration warns could harm grid reliability and resilience.

While the specific details of a plan, floated in a draft memo leaked May 31, are yet to be determined, LaFleur expected aspects of it will ultimately land at FERC. "I can't believe there will be a way around FERC for implications for the market, how dispatch run works, how other units are affected," she said.

"I somehow think this is coming our way if it happens," she said. --Maya Weber, maya.weber@spglobal.com

--Edited by Gail Roberts, gail.roberts@spglobal.com