Washington — President Donald Trump signed executive orders Wednesday targeting a key point of friction for natural gas pipeline development, particularly in the Northeast, but details of changes will be left for the Environmental Protection Agency to sort out.
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The first broad order addresses state water quality reviews, and combines other smaller steps, including a call for revamped LNG safety regulations. A second order seeks to shorten reviews of crossborder oil pipeline permits like the one needed by TransCanada to build the 830,000 b/d Keystone XL heavy oil pipeline.
Amid a major pipeline buildout to move Appalachian Shale gas to market, some 20.1 Bcf/d of Northeast natural gas production takeaway projects have entered service between 2015 and 2018, according to S&P Global Platts Analytics. But some Northeast projects have stalled over state permit denials or delays under Section 401 of the Clean Water Act, and other legal challenges from environmental groups.
"My action today will cut through destructive permitting delays and denials, where it takes you 20 years to get a permit." Trump said at a signing ceremony in Crosby, Texas. "Those days are gone. You may not get it at all, but it's going to be quick if you don't."
How far an executive order can go to alleviate hurdles under existing law remains to be seen.
"Outdated federal guidance and regulations issued by the Environmental Protection Agency have caused confusion and uncertainty, leading to project delays, lost jobs and reduced economic performance," a senior administration official said Tuesday.
The first order tells EPA within 60 days to update 2010 interim guidance to address timing and scope of state CWA reviews. EPA would also update enabling regulations that predate CWA Section 401, with a final rule due within 13 months.
Natural gas interests have sought guidance to keep state reviews from dragging out, accusing states like New York of gaming the process. They also have sought guardrails around what states can consider in making water quality determinations -- changes environmental groups worry could strip states of their statutory role.
While the order may not be a silver bullet for specific projects, it heightens the sense of priority for administration efforts to streamline permitting.
"These projects have become increasingly difficult to complete because of the multiple steps along the way," said American Petroleum Institute CEO Mike Sommers. "If you can shorten one of those steps, it certainly helps in the development of this important priority for the industry."
The second executive order weakens the role of the State Department in reviewing crossborder permits and says decisions to approve or deny those permits will be made solely by the president. It takes aim at the Keystone XL stalemate, but may not represent a quick fix for the project, which remains locked in a court battle in Montana.
To speed crossborder reviews, the secretary of state would adopt procedures to receive complete information from participating agencies within 60 days of an application. FERC gas project reviews and DOE transmission reviews would be exempted from the order, which extends to water and transportation projects.
LNG SAFETY RULES
Under the first order, Department of Transportation is tasked with updating LNG safety rules to reflect modern technology, and best industry practices on the ground that existing rules developed for small-peak shaving facilities 40 years ago are not well suited for large-scale export or import facilities.
DOT would also be tasked with proposing a rule to treat LNG the same as other cryogenic liquids to allow permitting in approved rail tank cars. That may address interest in such shipments to move gas to New England or from Permian association gas production.
To better address sunset provisions for electric transmission right-of-ways, the order would call for development of a master agreement for right-of-way renewals and reauthorizations to expedite the renewal process and facilitate vegetation management.
Also targeted are growing environment, social and governance investor initiatives. The order would require a Labor Department study of whether ESG initiatives are having discernable impacts on energy investments, along with a related review of existing guidance on fiduciary responsibilities for proxy voting.
DOT and DOE are further tasked with studying economic effects of the inability to ship natural gas and other energy resources to New England, as well as effects of limitations on moving coal, gas, oil and other resources through the US West Coast.
The administration's record in speeding natural gas permitting so far is mixed, amid periods in which FERC vacancies have affected timing. According to LawIQ, the median time for interstate natural gas pipelines was 440 days in the first two years of the Trump administration versus 365 days during the last two years of the Obama administration.
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