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With Houston’s Natural Gas, Oil Expertise, FERC Eyeing City as Regional Office

With a plethora of natural gas export projects, and the pipelines that lead to them, destined for the Texas coast, FERC may establish a regional office in Houston, the chairman said Thursday.

Speaking at CERAWeek by IHS Markit, Neil Chatterjee said liquefied natural gas (LNG) export projects and pipeline permitting are weighted to the Texas coast and led overwhelmingly by Houston-based companies. To that end, discussions are underway with Houston Mayor Sylvester Turner to open a regional office, he said.

The “expertise” required to review LNG permitting “is here in Houston,” and a Bayou City regional office for the Federal Energy Regulatory Commission would make “a lot of sense.”

FERC’s role is at times “simply to get out of the way,” Chatterjee said of his approach to running the Commission.

However, protecting the nation’s grid and pipeline network through security regulations is never lost among his priorities. At the end of the month, the Commission is hosting an energy security conference with the Department of Energy (DOE) and the Transportation Security Administration.

"America's critical infrastructure,” Chatterjee said, “is increasingly under attack” from cybersecurity threats. However, natural gas infrastructure growth also has faced a withering assault in state and federal courts, as well as the court of public opinion.

The not-in-my-backyard, aka NIMBY, communities and national conservation groups have strewn obstacles in the path of companies attempting to expand pipeline infrastructure. The courts are clogged with lawsuits.

Those legal challenges have added to FERC’s workload, said Chatterjee, as the Commission has to ensure permits issued can withstand the legal assault by what he said were “well meaning people.”

The FERC chairman also addressed the touchy proceeding to enhance grid resilience. The Commission last year unanimously rejected a DOE notice of proposed rulemaking to examine the resilience of the power grid, a move cheered by the coal and nuclear industries, while natural gas groups were vehemently opposed.

FERC instead issued an order to “holistically” examine the bulk power system’s resilience. Chatterjee suggested at the luncheon that FERC’s proceeding may consider transmission investments as a solution.

"It may not be possible or cost effective to design the grid to withstand every single type of extreme event that might occur," he said. "Striking the right balance for consumers is undoubtedly a complex undertaking, but I believe it is more reasonable for us to consider additional transmission investments as an insurance policy to help reduce the size of disruption and enhance the grid's ability to bounce back."

He didn’t provide a timeline on when those transmission investments could be considered.

Diversifying the energy mix also is important, but competition among suppliers remains a priority, and consumer prices need to remain stable as more renewable technologies are mainstreamed.

Solar and wind power could “fundamentally alter the way we consume energy,” and  the “increasing reliance on electric infrastructure and expanding threats to the grid” require FERC to “take a closer look at if we're doing enough to protect ourselves.”

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