FERC’s approval of policy statements last month to guide how future natural gas and liquefied natural gas (LNG) infrastructure are approved came to a head on Thursday under scrutiny by the Senate Energy and Natural Gas Resources Committee.
Chaired by Sen. Joe Manchin (D-WV), all five members of the Federal Energy Regulatory Commission were quizzed by supporters and critics of the policies during a scheduled hearing.
FERC Chairman Richard Glick, joined by fellow Democrats Allison Clements and Willie L. Phillips, defended the policy approvals, which were approved over the objections of Republican colleagues James Danly and Mark C. Christie.
According to FERC, the revamped certificate policy statement and interim greenhouse gas (GHG) policy statement “are intended to improve the legal durability of the Commission’s natural gas certificate and LNG decisions following a series of court decisions raising concerns about the Commission’s prior approach.”
Asked by Manchin why FERC was making environmental policy rather than the Environmental Protection Agency, U.S. Army Corps of Engineers or the U.S. Fish and Wildlife Service, Glick held his ground. Noting he could only speak for FERC, Glick said the updated guidance ensures approvals are “more legally durable.”
Adding Clarity For Developers?
The Commission has approved LNG and natural gas infrastructure, only to see the certificates struck down by the courts. Lawsuits have challenged impacts on the climate and increasingly, by community advocates on environmental justice issues.
Adding clarity to policies offers more certainty for developers and their immense investments, Glick said. When an approved project is challenged in court, it often languishes, sometimes for years. Sponsors also have canceled some projects in part because of the court fights.
“We could certainly wait” for other federal agencies to weigh in on projects, Glick said. However, the approval process would lengthen. “We’ve had a number of cases sitting,” he said. “We needed to act on this.”
Why is it FERC’s responsibility to provide environmental guidance? Manchin asked.
“All I can tell you,” said Glick, “is that…we have cases that the courts have told us that we have to analyze the impact of greenhouse gas emissions as to whether they’re significant or not. And if we sat there and didn’t do anything, it would cause cases to be….sitting there and sitting there.
“We’ve been getting criticized because we’re not moving cases,” he said. “That’s what I’m doing. I’m trying to move cases…”
What is happening in Ukraine today and the “role that energy security plays around the world, partly because of natural gas and LNG exports, is all the more reason not to cut corners in decisions,” Glick said. “Do things right the first time.”
The dissents on the policies by Danly and Christie were based on their views that the “courts got it wrong,” said Glick.
“It’s not our job to question the court decision,” he told the Senate panel. “We are talking billions of dollars. What we’re trying to do here is provide more certainty…
“I understand, it’s a difficult question…” However, “if we sat there and did nothing, further imperiling these cases, we would be adding more uncertainty to the process.”
Glick said he was meeting soon with some CEOs who are “seeking clarification” about the new policies.
‘Chilling of Investments’
While the FERC chairman made the case that the new policies improve certainty, Danly said the opposite. The policies are going to cause a “chilling of investments” into natural gas projects, Danly told the committee.
Fellow Republican Christie appeared to not hide his contempt for the policy approval by the majority Democrats. To “show just how arbitrary and capricious this whole thing is, they don’t even say what level of mitigation,” Christie said of the Democrat-driven policy for GHG emissions. “They don’t even say they have the power to require mitigation of indirect impacts because they don’t.”
“So what they’re going to do is say to the applicant, ‘you’ve got to propose, we encourage you to propose, sort of encourage with a gun to your head. We’re going to encourage you to propose mitigation but we won’t tell you what’s good enough. We won’t tell you how much is enough or how much is not enough.’
“So it’s purely arbitrary. And it just comes down to whatever three members are willing to prove it easily or quickly.”
Glick shot back, “We do this analysis all the time with all sorts of environmental impacts, geology, soil, water, land use, visual issues. We do this all the time…every single time the Commission issues an order.
“We don’t have, necessarily, the metrics that other agencies use. We have to determine whether those issues, those impacts are significant or not,” Glick said. “And we do so through our environmental impact statements. And then the Commission votes on that. And this is no different.
Glick said, “they’re making it sound like it’s a totally different set of issues,” adding, “We’re just following the law.”
Manchin said LNG is “needed right now basically, with what Europe’s going through and the geopolitical climate that we have, which is very, very dangerous. And we are trying to ramp up an LNG backfield if we can.
“These projects,” Manchin said, “I mean, we can’t get anything through…That’s the bottom line.”
To Glick and the two Democrats, the Democratic senator said, “You’re wearing people out and putting undue burden on the users in America. We’re paying much higher prices. We’ve never paid these kinds of prices, not in my state of West Virginia. They’ve doubled their utility prices. And we haven’t seen any principal changes.”
Manchin said, “There’s no question we can mitigate or reduce or minimize environmental impacts to a forest or wetland where the pipeline goes through. But to say that the applicant has to mitigate global climate impacts is not even remotely related to what FERC has historically done.
“So I think that it’s totally misleading to say there’s nothing to see here and nothing new. We’ve always done environmental impacts to compare drainage mitigation going through a wetland,” for example, but now, “you’ve got to mitigate global climate change. If you can’t see the difference in that, you’re not looking. That is a massive, massive step different.”
© 2022 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 | ISSN © 1532-1266 |