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FERC Proposes Coordinated Federal, State Reviews of Gas Projects

FERC last Thursday issued a proposed rule that implements provisions of the Energy Policy Act of 2005 (EPAct) giving the Commission the authority to coordinate the schedules of other federal and state agencies in processing natural gas pipeline, liquefied natural gas and storage projects and to maintain a consolidated record of all agency decisions for use in judicial reviews.

EPAct designated the Federal Energy Regulatory Commission as the "lead agency" for coordinating all federal authorizations for natural gas infrastructure projects and for the purpose of complying with the National Environmental Policy Act of 1969. It also empowered FERC to establish a schedule for state agencies to complete their reviews of gas projects that are subject to the requirements of the federal Coastal Zone Management Act (CZMA), the Clean Air Act and the Clean Water Act statutes.

The Commission's proposed rule calls for the adoption of a default schedule that all agencies, including states that hold delegated authority under various federal statutes, would follow if FERC decides not to issue a notice setting out a specific schedule for a particular project. The time frames established by FERC would only apply to agencies that do not already have deadlines established by federal law.

In cases where FERC does not establish a schedule, the proposed rule would require other federal and state agencies to act on proposed gas projects within 90 days of the issuance of the Commission's final environmental impact statement (FEIS). If a FEIS is not separately issued, FERC said it would then ask the agencies to act no later than 90 days after a Commission final order is issued.

EPAct "in no way undermines the review by other agencies, including state agencies acting under delegated authority," said FERC Chairman Joseph Kelliher. The scheduling of agency actions by FERC will lead to "better, more timely decisions" at the regulatory level, noted Commissioner Suedeen Kelly.

The proposed rule also would require FERC to maintain a complete, consolidated record of all agency decisions with respect to a particular gas infrastructure project. The record would serve as the basis for judicial appeals of FERC decisions, and reviews of state decisions that claim a gas project is inconsistent with coastal protections under the CZMA law.

In addition, it calls on each agency to submit electronically to the Commission a copy or summary of its decision and an index of documents and materials that were pertinent to the proceeding. The filing would be made within three days of the agency's final decision. If a federal or state agency fails to reach a decision, the proposed rule requires the agency to notify FERC within three days of the scheduled deadline, and to file an index of the documents and materials in the agency's inconclusive proceeding.

"This kind of discipline will make for a more robust record...I think it will make for a more cooperative" working relationship between the federal and state agencies on gas infrastructure projects, said Commissioner Nora Brownell.

Comments on the proposed rule, including any related or alternative proposals, must cite the docket number (RM06-1) and be submitted to FERC within 60 days following publication in the Federal Register.

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