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FERC policy update likely to make new pipeline projects more difficult

May 13, 2021

S&P Global ($):

The Federal Energy Regulatory Commission’s effort to update its permitting policy for natural gas infrastructure could result in a process that makes it more difficult to build pipelines, requiring developers to go further to show their projects will be needed and will not cause excessive impacts to people and the climate, according to industry and environmental legal experts.

The sentiments from representatives of pipeline company Kinder Morgan Inc., municipal gas utility Philadelphia Gas Works Co. and the Environmental Defense Fund reflected the significant uncertainty that remains nearly three months after FERC resurrected a review of its 1999 natural gas pipeline policy in February (PL18-1). But the panelists generally agreed that FERC acted properly in seeking public input on issues such as climate change, environmental justice, the potential use of eminent domain by project developers, and the balance of project need against the interests of landowners and other groups.

“The questions being asked are the right ones,” Jacquelyne Rocan, assistant general counsel at Kinder Morgan, said during a May 11 panel at an annual summit of the Energy Bar Association. “They are certainly in the areas of major concern.”

The panelists also expressed optimism that a new Office of Public Participation being set up within FERC could help even the playing field between public interest groups and industry while reducing late challenges to projects that can hold up development.

The commission has made some significant policy shifts in how it considers applications to build gas infrastructure. Most recently, FERC on May 4 established a new policy of staying its Natural Gas Act certificate orders during a rehearing period when a rehearing request is concerned with project construction, operation, or the need for a project. The policy was an adjustment to a June 2020 rule that put a stop to the commission’s use of tolling orders to extend the time it had to make a decision on such requests (RM20-15). Rocan said the order could slow down project development but it was too early to know how the new policy will work in practice.

[Corey Paul]

More: FERC asks the right questions on pipeline policy, but outcome unclear—experts

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