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GOP members press FERC on whether it will deny gas projects over climate impact

Highlights

Glick questioned on shifting GHG approach in House committee

Chairman says shift in direction in line with appeals courts rulings

US Federal Energy Regulatory Commission Chairman Richard Glick faced questioning from Republican House members July 27 on whether his increased attention to greenhouse gas emissions would prompt the commission to reject applications for interstate natural gas projects.

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Their questioning and concerns over whether FERC was cooling on natural gas and other fossil fuels came during an oversight hearing on the commission's role in the changing energy landscape held by the House Energy and Commerce Committee's energy subcommittee. Since becoming chairman in January, Glick has worked to increase consideration of climate impacts in FERC's gas pipeline project reviews, an area that continues to divide the commission.

Representative David McKinley, Republican-West Virginia, asked Glick what level of GHG emissions would be acceptable to allow FERC to approve a pipeline, since the commission has not yet laid out metrics for determining the significance of emissions. And he highlighted the views in a dissent by Republican FERC Commissioner James Danly suggesting FERC lacks expertise and regulatory authority to make such a determination.

Glick frequently pointed to appeals court rulings to explain the shifts in FERC's approach. The DC Circuit Court of Appeals has "twice told US that we actually have to assess these reasonably foreseeable greenhouse gas emissions," Glick said. He avoided identifying a threshold of acceptable GHG gas emissions for a project, saying, "I don't want to prejudge the matter because it's currently being litigated at FERC."

Exploring prospects of denials

Representative Tim Walberg, Republican-Michigan, worried that FERC may be "vastly overstepping its jurisdiction by viewing all decisions through an environmental lens, instead of putting reliability and affordability for the customer first."

He asked Glick whether he believed FERC has statutory authority to deny a permit "solely because of climate change concerns."

Again leaning on appeals court findings, Glick said the courts on "numerous occasions" have told FERC that if environmental concerns are significant enough to outweigh benefits and those impacts could not be mitigated, then FERC could technically reject a certificate, though Glick noted FERC had not yet done so. FERC could, however, require a pipeline to mitigate such impacts and would not necessarily have to deny a project, Glick added.

Walberg, in turn, cautioned Glick over his legal interpretation on such denials. "I'd be awfully cautious about that -- whether the court case would go that far and give that type of latitude for you to do it," he said.

LNG export stance

Representative Bill Johnson, Republican-Ohio, sought to pin Glick down on whether he broadly supports LNG export expansions, and on whether FERC would consider downstream climate benefits of LNG.

"On a case-by-case basis," Glick said he thought there were LNG exports that serve the public interest. But, he told Johnson that FERC cannot look at the emissions impacts of LNG projects downstream. "Courts have told us that's for the Department of Energy, not FERC," he noted.

Asked for his view on LNG exports, Danly did not hold back, calling US LNG terminals "geostrategic assets" that are "among the most important pieces of infrastructure that the United States has permitted."

Danly and Glick have often been on opposing sides of FERC's evolving approach to gas project permitting. In his written testimony, Danly was critical of recent shifts at FERC. He said the pipeline industry is facing "profound regulatory uncertainty as a result of recent commission actions."

"Because of this uncertainty, investment in pipeline projects has come nearly to a standstill," he said in those written remarks.

A number of Republican lawmakers at the hearing contended the Biden administration was seeking to move too quickly away from fossil fuels, raising the specter that energy consumers could face increased prices.

Glick said he, too, has concerns about high energy prices but pointed to decreases in wholesale electricity prices over the last 10 years amid low natural gas prices along with competition from zero marginal cost technologies such as wind and solar power.

From the Democratic side, Committee Chairman Frank Pallone of New Jersey praised changes afoot on FERC's gas project work, including steps to protect landowner rights and account for GHG emissions. But he Pallone said he hopes FERC does more to address the scope of pipelines' eminent domain authority as well as reviewing whether contracts between a pipeline and an affiliate can be used to show a market need for a project.

Separately, during questioning from Pallone, Glick said he believed mandatory reliability standards and cybersecurity standards were both needed for natural gas pipelines, suggesting mandatory standards have worked out well in the electric sector, where FERC does have authority.