FERC Commissioner Marc Spitzer endorsed the possibility of federal permitting of potential liquefied natural gas (LNG) projects that would apply a programmatic — as opposed to ad hoc, case-by-case — environmental review. Spitzer made his comments at the “Energy in California” conference Monday in San Francisco while responding to questions from participants in the Law Seminars International two-day meeting.

“If we continue to have gridlock where the states deny LNG authority under the Coastal [Zone] Management Act and nothing is getting built, maybe we need to revisit this.”

Individual project proponents, however, want their individual days in court, so to speak, to make their arguments for a specific site, he said, so the change will not be an easy sell. Nevertheless, in giving conditional approval to the NorthernStar Natural Gas Bradwood Landing LNG project in Oregon last Thursday, Spitzer said the Federal Energy Regulatory Commission (FERC) discussed this idea, which was promoted in a recent letter from Oregon Gov. Ted Kulongoski.

Spitzer said the concept most likely would not require congressional action but would require substantial changes in the operations at FERC.

Noting that the Bradwood case is still within the time span for which rehearings can be sought, Spitzer said people in Oregon are against the prospect of some of the LNG supplies flowing to California. “Parochialism exists everywhere,” he added, “and it is understandable in these very contentious days.” He added that a number of LNG terminals approved by FERC will not be built because the states won’t go along under their powers in the federal coastal management law.

“Gov. Kulongoski wrote what I thought was an excellent letter, proposing a programmatic environmental impact statement for Oregon,” he said. “Instead of having five potential sites, the federal government could consider choosing one, and the governor would go and then get that sited. That’s different from the status quo in which each plant is evaluated individually on its merits. It is an interesting concept and would require a change of FERC policy.

“Now each case stands on its own, and certainly if you are a litigant, you want your case heard.”

In regard to the natural gas industry generally, Spitzer said that for those now questioning market-based approaches in the energy space, natural gas has been a success covering three decades in terms of a deregulated market approach, including the opening of the interstate natural gas pipeline system. “Market forces in natural gas have saved the American consumers, I believe, trillions of dollars, and the fact is that with our gas policies, if you consider the price spikes and the global demand, domestic production of gas is up almost 10% based on market conditions.

“In order to have the gas reach the market, you need to have an interstate pipeline system, and FERC has certificated more miles of interstate pipelines in the past two years than the prior 10 years combined. This was a response to market.”

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