Underground Construction - February 2018 - 8

WASHINGTONWATCH
FERC to Review Pipeline
Policy Statement

N

New Federal Energy Regulatory
Commission (FERC) Chairman
Kevin McIntyre's announcement
that the commission will review
its 1999 pipeline policy statement
comes in the wake of pressure
from the Trump Administration
to ease permitting of various
infrastructure projects. President
Trump issued an Aug. 15, 2017,
Executive Order (E.O.) 13807 entitled Establishing Discipline and
Accountability in the Environmental Review and Permitting Process
for Infrastructure Projects.
But McIntyre and the four
other commissioners, three of
them also new, will hear voices
pushing them in the opposite
direction. Environmentalists will
probably echo complaints from
a ruling last August from the U.S.
Court of Appeals for the District
of Columbia, which slapped
FERC's hands for an incomplete
environmental impact statement
in conjunction with a major Florida pipeline project. Of course,
that same court cleared the way
last summer for FERC to take the
unprecedented step of clearing
construction for an eight-mile
spur of the Millennium Pipeline
when New York State dragged
its feet in making a decision on a
Clean Water Act permit.
Kurt Krieger, an attorney with
Steptoe & Johnson, who does extensive pipeline litigating, says it is
possible that parties on both sides
will try to inject into the coming
debate what is or isn't pre-empted by the 1999 policy statement.
Environmentalists will look for
purchase, as will the industry. But
Krieger believes the current policy
works extremely well.
The 1999 policy statement
alludes to potential adverse
environmental effects as one
8

FEBRUARY 2018 | UConOnline.com

The 1999 policy
statement
alludes to
potential adverse
environmental
eﬀects as one
thing FERC must
consider prior
to approving a
certificate for
construction
under Section
7 of the Natural
Gas Act. But
the statement
did not call for
the elimination
of all adverse
environmental
impacts...
thing FERC must consider prior
to approving a certificate for construction under Section 7 of the
Natural Gas Act. But the statement
did not call for the elimination
of all adverse environmental
impacts, just a mitigation of
them to the extent possible, and
then weighing those remaining
concerns against the benefits of
the project. That could include
meeting unserved demand,
eliminating bottlenecks, granting
access to new supplies, lowering
costs to consumers, providing
new interconnects that improve

Stephen Barlas | Washington Editor

the interstate grid, providing competitive alternatives, increasing
electric reliability, or advancing
clean-air objectives.
The 1999 policy statement was
adopted against the backdrop
of an anticipated increase in the
demand for natural gas, and
concerns about the use of unnecessary rights-of-way and the
potential for overbuilding with the
consequent effects on existing
pipelines and their captive customers. The statement ushered in
the standard of "incremental pricing" as the basis for approval and
changed the then-policy, which
had a presumption in favor of
rolled-in pricing, but was tossed
out because it was considered
a subsidization by the sponsor's
existing customers.
INGAA CEO Don Santa welcomed the review. "We believe
that it will be demonstrated
that the 1999 policy statement
has withstood the test of time
quite well," he said. "The criteria
specified in the policy statement
continue to provide FERC with
what remains a robust framework
for evaluating the range of questions that must be addressed in
determining whether a proposed
pipeline meets the public convenience and necessity."
Asked whether that means
INGAA is happy with the 1999 policy statement as is, Cathy Landry,
INGAA spokeswoman, answered,
"The short answer is yes. But we
will have more fulsome comments
if and when FERC seeks them."
The original commitment from
McIntyre to re-examine the 1999
statement came in the form of
answers he submitted to written
questions presented to him by
Sen. Maria Cantwell (D-Wash.)
after his September confirmation
hearing at the Senate Energy and
Natural Resources Committee.
Cantwell alluded to a concurring
opinion issued by former Obama
Administration FERC Chairman

Norman Bay, who suggested the
FERC should reconsider its use of
precedent agreements between
pipelines and potential future
customers to assess whether a
proposed new pipeline is needed.
In particular, Cantwell wrote that
Bay argued the precedent agreements involving pipeline affiliates
are particularly suspect.
She asked whether McIntyre
agreed that the commission
should reexamine its policies for
assessing whether a new pipeline
is necessary. McIntyre answered
that FERC already does a detailed
evaluation of pipeline need as
part of its review of gas pipeline
certificate applications. He then
referred to the 1999 policy and
wrote, "I also believe that agencies periodically should review
their policies to ensure they are
effective, and if confirmed I will
give these important issues concerning pipeline need the careful
attention they deserve, and will
work to ensure that the Commission's review process considers all
relevant issues."
McIntyre also referred to his intention to review the 1999 policy
in answer to Cantwell's question
about the Appeals Court ruling on
the final environmental impact
statement (FEIS) for the Southeast
Market Pipelines (SMP) Project,
the major component of which is
the already-completed, 515-mile
Sabal Trail project in Florida, a
joint venture of Spectra Energy,
NextEra Energy and Duke Energy.
The court censured the FERC for
inadequately accounting for new
greenhouse gas emissions from
the SMP project.
FERC subsequently issued
a draft supplemental EIS on
September 27, 2017, ostensibly
answering the Appeals Court's
concerns. It concluded: "...constructing and operating the SMP
Project would result in temporary
and permanent impacts on the
environment. We also conclude
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