A senior U.S. Department of Energy (DOE) official told members of a House Energy and Commerce Committee panel that the Biden administration is not weighing banning exports of liquefied natural gas (LNG) or crude oil to counter rising energy costs.

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During an Energy Subcommittee hearing this week on House Resolution (HR) 6084, the Energy Products Reliability Act, DOE Deputy Secretary David M. Turk said “an export ban, either on the LNG side or on the oil, is not something that we’re currently discussing and undertaking.”

Turk’s statement followed repeated questions by Republican subcommittee members about whether the administration is considering such actions. 

HR 6084 would direct FERC “to create a new, stakeholder-driven entity responsible for developing energy pipeline reliability and cybersecurity standards,” according to Rep. Bobby Rush, D-IL, the bill’s sponsor.

A NERC for Pipelines

Rush said the bill would institute “enforceable reliability standards for energy pipelines, just as we do for the electric grid” under the North American Electric Reliability Corp. (NERC). It was created via the Energy Policy Act of 2005. 

The Federal Energy Regulatory Commission’s website describes NERC as the “FERC-approved authority” charged with developing and enforcing reliability standards; assessing seasonal and long-term reliability; monitoring the bulk power system; and educating, training and certifying industry personnel.

Following Winter Storm Uri, which caused widespread power outages in Texas, “multiple oversight hearings’ found “the power outages were caused, in part, by inadequate natural gas fuel supply and delivery, as well as Texas’ failure to establish meaningful winterization and other standards to ensure reliable natural gas delivery,’ said Rep. Frank Pallone, D-NJ.

Pallone said a subsequent joint report by FERC and NERC corroborated the findings.

“Among other things, this joint report concluded that ‘generating unit outages and delivery were inextricably linked’ during the storm,” said Pallone. “The report recommended that a working group consider whether Congress should vest a single agency with responsibility for ensuring pipeline reliability.”

The FERC-NERC report attributed 58% of unplanned outages during Uri to natural gas-fired power generators. An industry-driven initiative by the North American Energy Standards Board aims to boost coordination between the natural gas and electric markets.

FERC Chairman Richard Glick told the subcommittee that 93 FERC-approved mandatory reliability standards, 12 of which address cybersecurity, apply to the bulk power system.

“In contrast, there is no comparable mandatory reliability regime for natural gas and other pipelines that transport energy products, including gasoline and propane,” said Glick. 

Glick also testified that the “lack of mandatory reliability standards, especially for natural gas pipelines, poses a risk” to the bulk power system’s reliability because the national gas and electric infrastructure are interdependent.

Glick said HR 6084 should “help to address” such risks by creating and certifying an Energy Product Reliability Organization (EPRO), which would submit legislatively mandated draft reliability standards to FERC. 

The legislation, Gilck said, would also grant FERC authority “to order the development of reliability standards and to require the EPRO to issue emergency standards if warranted.” Moreover, the bill includes provisions that would authorize FERC “to review EPRO enforcement actions and to independently investigate and penalize” pipeline reliability standard violations.

“Legislation to establish and enforce reliability standards for the pipeline network will better secure the reliability of our nation’s energy infrastructure in the face of threats such as extreme weather and cyber-attacks,” said Glick. He applauded the committee for “tackling this long-overdue issue.”

Bureaucratic Overlap?

Rep. Fred Upton (R-MI) called the HR 6084 “a sweeping power grab” that would prevent states and local jurisdictions “from regulating all types of energy infrastructure…The bill would dramatically expand FERC, transforming a relatively tiny agency into a behemoth with regulatory powers over America’s entire energy system.”

Upton said “Americans are not asking for this bill.” The legislation would “impose new federal taxes, fees and regulations on all energy in this country” – not just interstate pipelines and the bulk power system crossing state lines.

A group of oil and gas industry associations also expressed concerns about the legislation. The group said the bill would “create a new, additional pipeline reliability regulator” that would “not effectively promote pipeline reliability” because it would duplicate and conflict with existing federal and state regulatory programs.

Industry trade organizations collectively commenting on HR 6084 included the American Gas Association, American Fuel and Petrochemical Manufacturers, American Petroleum Institute, American Public Gas Association, Association of Oil Pipe Lines, GPA Midstream Association, Interstate Natural Gas Association of America and Natural Gas Supply Association. 

The associations said FERC, the Pipeline and Hazardous Materials Safety Administration, the Transportation Security Administration and DOE each have reliability programs. Also, they pointed out the Department of the Interior, Bureau of Ocean Energy Management, Bureau of Land Management and other agencies oversee energy production. State and local governments also have authority over intrastate natural gas pipelines and local gas distribution systems.

“Inserting a new regulatory entity into this mix without addressing existing regulatory challenges, including capacity constraints resulting from federal and state permitting obstacles, would not be helpful” in advancing pipeline reliability, the trade groups said.

What About Jurisdiction?

Attorney Monique Watson, Washington, DC-based partner with the law firm Steptoe & Johnson LLP, said the bill presents FERC jurisdictional questions.

“The scope of the legislation is interesting because it applies to natural gas, hydrogen and oil pipelines,” Watson, a former FERC official, told NGI. “Notably, the Commission only has jurisdiction over oil pipeline rates and tariffs and its jurisdiction over hydrogen pipelines has not yet been established.”

For natural gas, Watson said FERC “only has jurisdiction over natural gas pipelines, not natural gas producers that are expressly exempted from FERC’s jurisdiction under the Natural Gas Act.”

She pointed out that FERC’s jurisdiction also does not extend to oil producers.

“Yet, the legislation directs the Energy Product Reliability Organization to establish standards related to the ‘coordination of’ and ‘availability of energy products,’” she said. “The availability of the natural gas commodity and oil commodity are not under FERC’s jurisdiction. As such, it will be interesting to see how the legislation eventually evolves.”

Watson also expressed her view that “Congress will eventually pass legislation to create mandatory reliability standards for pipelines” given its earlier creation of NERC for electric reliability standards.

“Reliability of supply, however, is greatly impacted by natural gas shippers’ decision to secure firm capacity or rely on interruptible capacity,” said Watson. “No legislation can counter the outcome when demand is high and interruptible capacity is limited or non-existent, if the shipper has decided to rely on interruptible rather than firm capacity.”