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Energy Execs Urge Senate Panel to Fix Federal Permitting Process

Executives with ties to the energy industry told a Senate panel that delays in the current federal permitting process for infrastructure projects, including for natural gas pipelines, are unreasonable, create uncertainty and higher costs for the sector.

During Tuesday's hearing before the Senate Energy and Natural Resources Committee, Dominion Energy CEO Diane Leopold, one of the witnesses called to testify, said her company has devoted $16 billion toward infrastructure projects.

"However, to make these beneficial investments we need certainty from federal agencies," Leopold said. "Not a rubber stamp, but a rational path forward with clear processes, reasonable schedules and reasonable decisions."

Those projects include the $4 billion Cove Point liquefied natural gas (LNG) export facility in Calvert County, MD, which is being built by Dominion Cove Point LNG LP.

"Federal and state permitting [for Cove Point] took about three and a half years, requiring more than 55 federal, state and local permits and reviews," Leopold said. "[But] this exhaustive process now looks simple compared with what we faced with the much-needed Atlantic Coast Pipeline [ACP]."

Leopold said the $5-5.5 billion ACP project -- a 600-mile, 1.5 Bcf/d pipeline that would run from West Virginia into Virginia and North to supply Appalachian Basin natural gas to the Southeast -- has so far required more than 18 major federal permits and authorizations, plus numerous other federal, state and local approvals.

"The process is already approaching three years and has a Sept. 28 deadline to complete federal authorizations -- a date that is later than it needed to be, and not as certain as it should be," Leopold said.

Case in point, Leopold said Dominion chose to use the horizontal directional drilling method to bore nearly one mile of the ACP under a mountain in Virginia, avoiding impacts to the Appalachian Trail and the Blue Ridge Parkway. But she said it took the National Park Service 14 months to review Dominion's 22-page application just to conduct a survey, and the company is still waiting for a decision on moving forward with the actual construction.

The survey, she noted, was completed in one afternoon.

"[It] is just mind-boggling that an agency would be so inefficient [and] ineffective that something as harmless as a survey -- which is not a permission to go forward, rather just a survey -- would take 14 months," said Sen. Bill Cassidy (R-LA) during the question-and-answer portion of the hearing. "As my daughter would say, 'OMG.' I am truly flabbergasted."

It was a sentiment shared by other witnesses who testified.

Pacific Power CEO Stefan Bird complained that it took nearly a decade to obtain the necessary federal permits for its Gateway West project, which calls for constructing about 1,000 miles of high-voltage transmission lines in Wyoming and Idaho.

Meanwhile, the National Hydropower Association’s Jeffrey Leahey, deputy executive director, said in his written testimony that hydropower has "the longest, most complex development timeline of any renewable energy technologies...with some projects taking 10 years or longer from the start of the licensing process through construction to being placed in-service."

Terry O'Sullivan, general president for the Laborers' International Union of North America (LIUNA), said his organization supports a streamlined regulatory review process, allowing different federal agencies to work concurrently on permitting requests, and a more definitive permitting process.

LIUNA also supports a "speedy filling" of vacant spots at FERC. O’Sullivan also urged the Trump administration to open offshore areas of the Arctic and Atlantic oceans to energy development, something that the Obama administration put off limits before leaving office.

"Our country needs a common-sense energy policy," O'Sullivan said in his written remarks. "Moving forward with a nonpartisan energy agenda will facilitate significant private investment that will create millions of new jobs across all sectors of the economy.

"It is also critical to addressing and improving the vital energy infrastructure that keeps our lights on, that heats and cools our homes and businesses, and that moves people and goods across the country. This infrastructure is in desperate need of repair and modernization."

Responding to questioning by Sen. Mazie Hirono (D-HI), O'Sullivan briefly touched on the issue surrounding President Trump's directive that oil and gas pipelines use American steel. He said that during a meeting with Trump, the issue of the Keystone XL crude oil pipeline was brought up. TransCanada Corp. already had ordered most of the steel for the project from overseas and begun construction before Trump was elected.

"I anticipated that there was going to be a problem with that one because TransCanada had already bought the pipeline from India," O'Sullivan said. But he told Hirono that LIUNA would "unequivocally support" to requirement that American steel be required for pipelines in the future.

In her closing remarks, U.S. Sen. Lisa Murkowski (R-AK), the committee's chairman, "we can have as many shovel-ready projects as we could possibly line up on paper, but when we meet the bureaucracy that hits and causes uncertainty and increased costs -- it really does complicate the creation of energy infrastructure.

"We don't want to abandon the regulations that allow for safety and good environmental considerations, but we want to allow for a process that is workable and fair."

Leopold said Dominion supports legislation the committee, and the Senate as a whole, approved last year, in particular concurrent National Environmental Policy Act (NEPA) review by the Federal Energy Regulatory Commission “and other permitting agencies, including agencies working with FERC's extensive NEPA process, rather than contesting duplicative reviews. We also support an expectation that agencies notify applicants when their permits are complete, to help stay within the timeline.

"The energy industry is poised to accelerate development of critical infrastructure serving the national interest...But to commit billions in private capital, we need a reasonable regulatory path to success if we follow the process."

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