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McIntyre's Tenure at FERC to Begin With Review of the Pipeline Certification Process

FERC will review a decades-old policy that governs how it evaluates natural gas pipeline proposals, Kevin McIntyre said Thursday during his first monthly meeting as chairman of the regulatory agency.

McIntyre said the Federal Energy Regulatory Agency will review its 1999 Policy Statement on Certification of New Interstate Natural Gas Pipeline Facilities. FERC is still evaluating what format the effort will take, but the process will be open, transparent, thorough, and invite the views of all stakeholders, he said.

"We as government officials, and we collectively as a government institution, owe it to all concerned to take a look at our processes and policies from time to time and say, 'as to this specific area of policy and process, is there any way to improve it?'" McIntyre said. "Let's dust off the existing playbook, take a fresh look at it, and ask ourselves the really hard questions around it. Is there any way to improve this? And we have decided, for better or for worse, to take a fresh look at the long standing 1999 policy statement on the Commission's issuance of pipeline certificate orders...

McIntyre pointed to the large expansion of the natural gas market and gas pipelines in the nearly 20 years since the current policy was formed.  "Without prejudging anything, and without intending to forecast a policy direction -- indeed, that is not the case -- rather, it's a matter we believe of good governance to take a fresh look at this area and to give all stakeholders and the public an opportunity to weigh in on what they believe should be any changes to our existing policy, any broad changes in direction, any minute refinements to policy steps, to procedural steps that aren't required, and to give us the benefit of candid advice."

The proposal was embraced by other Commissioners. In particular the Commission will examine its definition of “need” for a pipeline, which at this point mainly is satisfied if the project has precedent contracts expected to make it commercially viable. Also, FERC’s environmental procedures will be examined. Both of these items have been vigorously challenged in recent years by groups opposing development of shale gas and the pipelines that carry it.

"I am confident that we will have a wide range of opinions on how we can do our work differently," said Commissioner Cheryl LaFleur. While the 1999 policy statement has held up well over the years, FERC's methods for determining the economic need of proposed pipelines and its environmental reviews are two items she said she hopes the exercise will zero in on.

"It's about good governance, it's about transparency...there's a lot of impacted constituents, and some of them have been heard, and some of them need to be heard," said Commissioner Robert Powelson. But, despite criticism to the contrary, FERC does not rubber stamp applications, he said. "People should have peace of mind that we don't site pipelines on spec here at FERC," he said.

Commissioner Neil Chatterjee, who was McIntyre's immediate predecessor as Chairman, offered an olive branch of sorts to critics who say they have no voice in FERC's pipeline decision process. "I for one am committed to ensuring that my door will be open, as always, to all stakeholders on this issue, no matter where they sit on the political spectrum, what interest they represent, or what part of the country they come from," he said.

The 1999 policy statement "has served the nation and its consumers well," according to Don Santa, CEO of the Interstate Natural Gas Association of America.

"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," Santa said.

FERC's public monthly meeting Thursday was the first since McIntyre and Commissioner Richard Glick were sworn in and the first with a full slate of five Commissioners since October 2015.

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