FERC on Friday modified its process for determining when opposed natural gas infrastructure can proceed with construction after receiving a certificate order, strengthening landowner protections while specifying exemptions to the policy.
The Federal Energy Regulatory Commission’s latest order is designed to clarify the intent of last summer’s Order No. 871, a rule to prevent a project from starting construction before the agency has acted on any relevant rehearing requests. The move comes after the agency earlier this year signaled it would revisit the rule.
After receiving comments from pipeline developers, FERC said Friday that it is revising the previous rule to “apply only when a request for rehearing raises issues reflecting opposition to project construction, operation or need.”
FERC said it intends to only prohibit construction authorizations either until a “qualifying rehearing request is no longer pending” or until 90 days after a rehearing request has been deemed denied by operation of law, whichever comes first. A rehearing request is considered denied by operation of law if FERC has not acted on the merits of that request within 30 days.
The agency will also adopt a “general policy” of staying certificate orders issued to projects under section 7(c) of the Natural Gas Act during the 30-day rehearing period or until any timely rehearing requests from landowners have been resolved.
“At most, any stay will last no longer than approximately 150 days following the issuance of a certificate order,” the order states.
Chairman Richard Glick characterized the latest revisions as a compromise between the interests of landowners and pipeline developers.
“With this order, FERC is working to fulfill its commitment to protect landowners, communities, and the environment while also ensuring that the construction of needed pipelines is not unduly delayed,” Glick said. “Today’s order strikes a compromise that both protects the interests of the parties affected by a new pipeline while also providing developers with the certainty needed to invest in energy infrastructure.”
However, the changes to FERC’s rehearing process do not have unanimous support among the commissioners. Republican Commissioner James Danly said in a dissent that he is fully opposed to the order.
Among numerous concerns raised by the commissioner, Danly called the presumptive stay of certificate orders “bad policy.”
The policy “does not strike the appropriate balance between pipelines and landowners,” Danly wrote. “There can be no ‘balance’ when the Commission violates clear Congressional mandate and attempts to withhold a statutory right afforded to certificate holders.”
Danly also warned that further delays under the policy change could contribute to project cancelations.
“Requiring the passage of four months before a certificate can go into effect is significant, especially since the time required for processing applications has already dramatically increased,” he wrote.
Commissioner Mark Christie, also a Republican, consented in a separate statement. He noted that the order will not prevent development activities that do not involve construction or the use of eminent domain. It further won’t apply to construction on land voluntarily agreed to by the landowner, the commissioner said.
“I understand the desire of the dissent simply to repeal Order No. 871 with nothing more, but that is not a realistic prospect,” Christie wrote. “…Rather than allow the current unsustainable status quo to continue, under present circumstances I believe this order represents a realistic path forward. If it is not administered fairly or does not bring the clarity and certainty needed, it can be revisited.”
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