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FERC Relaxes Regs to Spur Delivery of Gas from Gulf Region This Winter

FERC last Thursday took steps to spur and expedite repairs and the construction of new interstate natural gas pipelines in an effort to bolster deliveries of gas supplies this winter from the hurricane-battered Gulf Coast region.

In one action, the Federal Energy Regulatory Commission waived regulations on a temporary basis to raise the cost limitations for projects that natural gas pipelines can construct without prior specific authorization from FERC under Part 157 blanket certifications. Specifically, the order raises the cost limit of projects that can be built under the automatic provisions of blanket certificates by two-fold to $16 million, and raises the cost limit of projects that can be constructed under the prior-notice provisions of blanket certificates to $50 million from $22 million, the order said [EM06-5].

The order further expands the definition of eligible pipeline projects to include mainline facilities. The increased dollar limits and expanded eligibility definition will apply to any pipe project that provides increased or alternative access to natural gas supply, provided the facilities are constructed and placed into service by Oct. 31, 2006, the agency said.

In related action, FERC also delegated to the director of its Office of Energy Projects (OEP), on an interim basis, authority under the Energy Policy Act of 2005 to assure expedited processing of natural gas projects until that authority can be permanently vested with the OEP director in a pending rulemaking [PL06-2].

"In the wake of Hurricanes Katrina and Rita, there is an urgent need to strengthen our energy infrastructure. Our action...will prevent unreasonable delays in decisions by other federal and state agencies on gas infrastructure projects," said Chairman Joseph T. Kelliher.

The OEP director, on a case-by-case basis, will establish deadlines and coordinate federal and state actions for all authorizations needed for proposed natural gas projects under Section 3 and Section 7 of the Natural Gas Act, according to the order.

The order comes as FERC prepares a rulemaking to implement Section 313 of the Energy Policy Act, which directs the Commission "to establish a schedule for all federal permits, authorizations, certificates, opinions or other approvals required for a Natural Gas Act Section 3 or 7 proposal." The energy act also requires any federal or state agency involved in the processing of an application to comply with deadlines set by FERC.

The order applies to all natural gas proposals pending before FERC, not just those filed since the enactment of the Energy Policy Act and any future proposals that may be filed, the agency said.

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