Houston — The US Federal Energy Regulatory Commission could have new staff in place in Houston by as early as next spring to help review LNG export terminal permit applications, as it looks to keep up with developers' growth plans amid personnel challenges and two vacant commission seats, Chairman Neil Chatterjee said Monday in an interview.
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During a sitdown with S&P Global Platts reporters on the sidelines of the Gastech conference in Houston, Chatterjee talked up the opportunity America has to increase its share of global liquefaction capacity, provided regulators and policymakers work together to expedite worthy projects.
At the same time, he said the commission will not be unduly influenced by pressure from the Trump administration to move quicker than is appropriate. The position reflects a desire to balance the sometimes competing priorities between business interests and environmental groups, even with the current complement of commissioners favoring Republicans by a 2-1 margin, after Democrat Cheryl LaFleur stepped down August 31.
"If they meet legal muster, we will approve them," Chatterjee said. "If we vote 2-1, rather than 3-1 because she's not here, the legal framework will be the same."
The chairman said he believes that any permit decisions with only three commission members will withstand legal scrutiny. Among the items on Thursday's commission meeting agenda is Eagle LNG's permit application for its proposed small-scale export project in Florida.
So far this year, FERC has approved permit applications for five new liquefaction terminals or production units. More than a dozen other projects have active applications pending. Most of the facilities are targeted to come online in the early to mid-2020s, at a time when global supply could face a shortage.
FERC, in an effort to handle the continued heavy workload of processing applications and overseeing LNG export projects, said in July that it planned to add eight staff members in a new regional office in Houston. The staff would be part of a newly created division within FERC's Office of Energy Projects focused on LNG facility review and inspection. The division would also include 20 existing staff members in Washington.
During the interview, Chatterjee said he was hopeful that the new division could be staffed by next spring or summer. He said he doesn't expect any decisions to be delayed because of the current staffing situation at FERC, or because of the vacancies on the commission. There was word Monday that a nomination to fill one of the vacancies could occur soon.
LaFleur's departure left FERC with a Republican majority that can issue natural gas project approvals and other orders on party lines, spurring concern by some market observers that decisions could be more vulnerable to legal challenges. LaFleur, a centrist on the commission, had been a key vote in a bipartisan compromise in February that paved the way for the approval of Venture Global's Calcasieu Pass LNG terminal in Louisiana. The five projects that FERC has approved in 2019 hinged on the inclusion of an estimate of direct greenhouse gas emissions associated with the terminals and compared the emissions to a national net emissions inventory.
For now, FERC has the minimum number of members for a voting quorum, creating the risk of falling below that threshold should one of the three members depart. But as far as FERC action is concerned that risk represents a stark departure from the beginning of the year, when market concerns about FERC stemmed from a potential partisan gridlock on a four-member board.
"Last summer, I was concerned that we might miss this incredible opportunity that we think the US had," Chatterjee said.
That isn't his feeling anymore, he said.
"I think we're going to be able to do our work," Chatterjee said. "Obviously, we prefer our full complement of people. But, we can do our work with three."
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