Underground Construction - April 2022 - 12

WASHINGTONWATCH
Potential impact of Europe's new need for U.S. liquid
natural gas (LNG) is now reverberating inside and outside
the Federal Energy Regulatory Commission (FERC), as it
attempts to implement two new policy statements setting out
new roadblocks to approval of pipelines and LNG terminals.
The two FERC statements are linked by their
environmental implications and were approved by the threemember
Democratic majority in February, with the two
GOP-appointed commissioners dissenting. The statements
establish a higher bar for proving " need " of a new pipeline and
a lower bar for allowance of greenhouse gas (GHG) emissions.
They will be applied to pending project applications, including
those for which a final environmental impact statement (EIS)
has already been issued.
The interim greenhouse gas policy, which seeks to limit
emissions from pending - and future - projects, has created
the biggest controversy due to the immediate need to export
more LNG to Europe. Scott Ray, CEO of Commonwealth
LNG, told Underground
Construction, " Commonwealth,
like many other gas and LNG companies with applications
pending before FERC, is concerned about how FERC may
implement this new policy, and any potential delay it may
cause in FERC issuing an order. "
Commonwealth, which submitted its application to the
FERC in August 2019, is an 8.4-million-ton-per-annum
(MTPA) LNG liquefaction and export facility located near
Cameron, La. Gas supply is achieved with the addition of
a 3.0-mile pipeline interconnected to two major pipeline
systems with significant excess transportation capacity.
Amy Andryszak, president and CEO of the Interstate
Natural Gas Association of America (INGAA), says the two
new policy statements " call into question the durability of
FERC's certificate policy review framework and add additional
uncertainty to the already complex natural gas pipeline
permitting process. "
Michael Pincus, a Washington attorney with several
interstate pipeline customers, says changes to the 1999 pipeline
approval policy and a new interim policy on consideration of
greenhouse gas emissions when applications are considered,
are " significant. "
It is worth noting, however, that these are not permanent
regulatory changes and could be tossed out the window, if and
when Republicans assume a majority at FERC. Even short of
a Republican takeover of the commission, which would have
to wait until a Republican becomes president, a GOP takeover
of Congress in 2022 could limit Democratic anti-pipeline
12 APRIL 2022 | UCONonline.com
Stephen Barlas | Washington, D.C. Editor
New FERC Pipeline Policies Worrisome
Concerns Regarding Possible Supplies to EU Enter Conversation
actions. In addition, the FERC is taking comments on the
GHG statement and could make revisions.
At March 3 hearings, in the Senate Energy & Natural
Resources Committee, Sen. Joe Manchin (D-W.V.), chairman
of the committee, was particularly critical of the new interim
policy on consideration of GHG emissions.
" [You all] acknowledge that no federal agency, including
FERC, has established a threshold for determining what level
of project greenhouse gas emissions is significant, " he said.
" Why do you all think FERC, whose primary purpose is to
regulate efficient and reliable energy, should be the first agency
to set such a standard, rather than environmental agencies? "
Sen. John Barrasso (R-Wyo.), the top Republican on the
committee, asked FERC Chairman Richard Glick how he
would " clean up this mess. " Based on Glick's response and
other remarks made at the hearing, Barrasso stated he had no
confidence that FERC would take action to revise the policies
and he, therefore, viewed it as the committee's duty to do so.
Spokespersons in both Manchin's and Barrasso's offices did
not respond to questions about what legislative actions they
might take to trim the FERC's sails.
At the outset, the GHG policy has created the bigger
firestorm because it sets a threshold for GHG emissions, both
upstream and downstream, which, if surpassed, would require
FERC to perform an environmental impact statement.
According to FERC, the 100,000-metric-ton threshold
" will cover the vast majority of potential GHG emissions
from natural gas projects authorized by the Commission " and
likely will " include projects transporting an average of 5,200
dekatherms per day and projects involving the operation of
one or more compressor stations or LNG facilities.
More problematic is FERC's decision to consider
downstream emissions, such as those emitted by pipeline
customers, whether they are from power plants, LDCs or
LNG facilities. Applicants would be required to mitigate those
emissions even though it is the Environmental Protection
Agency (EPA) that regulates GHG air emissions under the
Clean Air Act. Therefore, FERC's GHG policy may be the
subject of a court challenge.
" FERC currently has a significant backlog of natural gas
project applications that have been awaiting a decision while
the Commission has been considering these policy changes, "
said INGAA's Andryszak.
Among the major pipeline and compressor projects that
have been issued final environmental impact statements, but
not project certificates, are Kern River's Delta Lateral Project,
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