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Funds Okayed to Coordinate Agencies Review of Gas Projects

Funds Okayed to Coordinate Agencies Review of Gas Projects

The federal budget signed by President Clinton last week set aside funding to help jump start negotiations among jurisdictional federal agencies on an agreement to coordinate interagency review of natural gas pipeline projects, paving the way for potentially quicker certification at FERC in the end.

Specifically, the budget earmarks an additional $100,000 in annual funding for the White House Council of Environmental Quality (CEQ) to come to the table with six other federal agencies to discuss and potentially sign a memorandum of understanding (MOU), which would establish "a general framework for cooperation and participation" among the agencies when reviewing gas pipeline projects. Although it has supported the effort, CEQ has claimed in the past that it lacked the funding and staff resources it needed to engage in the MOU process. Interagency cooperation also has been stymied in the past by agency turf battles.

A VA-HUD Appropriations conference report, which was passed by both the Senate and House earlier this month, directs that the additional budgeted money be used by CEQ to hire a staff so it can negotiate on an MOU with respect to environmental review of gas pipeline projects. Congress believed this was a "good initial investment" in a "sound process" for interagency cooperation, said Gay Friedmann, vice president of legislative affairs for the Interstate Natural Gas Association of America (INGAA).

To spur the effort along, the interstate pipeline industry has proposed a draft interagency agreement for the agencies to either sign or to use as a model for their own accord. "The overall objective is to build consensus among all involved agencies to assure the timely, cost-effective development of needed, environmentally sensitive natural gas pipeline projects," the industry draft agreement said. It proposes that information on a pipeline project be "gathered, considered and relied upon" by the seven jurisdictional federal agencies in a single review process. The draft agreement seeks to "compile a common data-base" for all agencies to rely upon in order to "avoid duplicative requests." It also calls for agencies to "agree on appropriate major decision points for significant decisions," and to "agree to resolve potential disputes by mutual agreement."

For it to have any weight, all seven federal agencies or departments would have to sign the interagency agreement: CEQ, FERC, the Interior Department's Bureau of Land Management and Fish and Wildlife Service, the U.S. Army Corps of Engineers, the Environmental Protection Agency, and the Advisory Council on Historic Preservation. Each agency is responsible for implementing some element of the National Environmental Policy Act (NEPA). FERC is the lead agency over NEPA, and is in charge of calling the other agencies together to negotiate an MOU.

"We have been working for more than four years to get the NEPA agencies to agree that it would be worthwhile to sign onto a kind of shell agreement wherein they would just agree to sit down and talk about how they were going to proceed in a coordinated manner to review gas pipeline applications," said Deborah Lawrence, vice president of government affairs for The Williams Cos. Inc.

"We have talked to each of these agencies and have received support. But we have not been able over the years to get FERC to convene a meeting with all these agencies...so that they could actually agree that they want to work on some kind of memorandum of understanding," said Lawrence, who, along with The Coastal Corp. and INGAA, has been at the forefront of this effort. Chairman James J. Hoecker has long supported streamlining the NEPA-agency review process, she noted, "but given what FERC has done this year with its NOPR and NOI, it's not probably their top thing to do." The other federal agencies "probably have other things on the front-burner, too."

Still, Lawrence holds out hope that the Commission will get the MOU process underway in the near term. She believes Hoecker offers "us a great window of opportunity" for this effort. But the Commission says the ball's in Williams' court now, and that progress on this issue will depend on the level of support that the pipeline can gather from the other federal agencies. "I think they're just forming contacts [at the agencies] at this juncture, and then we will follow up from there," said Pat Jagtiani, gas advisor to Hoecker. "It really is, I think, in a formulative stage with them."

An interagency agreement is crucial, pipelines contend, because it would help minimize the governmental red tape and "unnecessary bureaucratic barriers" associated with the existing environmental review process for gas pipelines, which is "typically protracted, expensive and of uncertain outcome." A 1992 report by the General Accounting Office revealed that FERC - in conducting 21 major environmental reviews over a 28-month period - averaged 568 days to complete an environmental impact statement (EIS) and 348 days for a formal environmental assessment, according to a pipeline industry position paper. This did not include additional time that may have been allotted for further environmental or permitting reviews by other federal agencies, it added.

A system that would coordinate the federal agencies responsible for enforcing NEPA would shorten the review process, and subsequently could speed up certification of gas pipeline projects at FERC, pipeline representatives believe.

At the same time, a coordinated system for agency review also would simplify matters. "Sometimes you [the pipeline] will try to comply with the wishes of one agency, only to have the next reviewing agency say 'we don't like the route; we need more information.' That leads to delay in the project, it costs more and it means we get our service to our customers that much later at a different costs. Sometimes a project can't be built at all because you missed the environmental window," Williams' Lawrence said.

Now is the time to streamline federal-agency review of gas pipeline projects as the industry faces the prospect of a 30-32 Tcf market in the 2010-2015 timeframe, she noted. "We need to be able to build our pipeline infrastructure quickly and at reasonable cost. It takes about seven years to build a pipeline. We need to get pipelines in the ground for 2008."

Susan Parker

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