Facing pushback from lawmakers and industry, and from dissenters within its own ranks, the Democratic-led FERC on Thursday walked back the rollout of controversial updates to its policies for reviewing natural gas infrastructure.
As part of its monthly meeting, the Federal Energy Regulatory Commission voted to seek comments on an update to its 1999 Certificate Policy Statement and an interim policy statement on assessing greenhouse gas emissions. FERC also designated the updated policies as “draft” statements as the agency seeks input from stakeholders.
FERC passed the two statements last month, with Chairman Richard Glick arguing that the updates are necessary to address legal vulnerabilities — evidenced by recent court rulings — in how the agency reviews natural gas infrastructure projects.
However, the agency did not advance the policy revisions with a unified front; FERC’s Republican contingent, Commissioners James Danly and Mark Christie, both dissented.
Outside of FERC, the new policies came under fire during a Senate Energy and Natural Gas Resources Committee hearing, and industry advocates have warned the changes increase regulatory uncertainty and threaten to prolong an already lengthy review process for natural gas projects under the agency’s purview.
Expecting An Extended Review
Now it’s FERC policies that will be subject to an extended review, though Glick stood by the need for reform in comments accompanying the latest agency action.
“The U.S. Court of Appeals for the D.C. Circuit has on several occasions, including as recently as March 11, cast significant doubt about the approach the Commission has been taking to site natural gas pipelines” and liquefied natural gas facilities, Glick said. “The policy statements were intended to provide a more legally durable framework for the Commission to consider proposed natural gas projects.”
However, Glick acknowledged “concerns that the policy statements created further confusion.” To help address the confusion, the agency plans to “gather additional comments from all interested stakeholders, including suggestions for creating greater certainty, before implementing the new policy statements.”
Analysts at ClearView Energy Partners LLC said in a note to clients Thursday that it also appears FERC may opt to enforce the new policies only for projects filed after the policy statements go into effect.
“We think this shift is an exceptionally big change; and does provide certainty of a sort to projects currently pending before the Commission, at least inasmuch that the new requirements do not apply now,” the ClearView analysts said.
Industry advocates praised the latest FERC move, with Interstate Natural Gas Association of America CEO Amy Andryszak commending the agency for listening to “the tremendous concerns expressed by natural gas customers and operators.”
Andryszak welcomed the move to “apply the revised policies only to project applications filed after the Commission finalizes the statements. FERC’s decision to revisit the statements with additional comments will hopefully provide further clarity and predictability for a timely natural gas infrastructure certification process.”
Energy Workforce and Technology Council CEO Leslie Beye also welcomed FERC’s decision to hold off on enacting the new policies.
“In order to increase domestic gas production, we must encourage continued infrastructure investment,” Beyer said. “The administration must signal support and encourage long-term investment in domestic oil and gas production and infrastructure and promote U.S. oil and natural gas technologies to allies overseas.
“The actions taken…by FERC are a step in the right direction.”
FERC set an April 25 due date for comments on the draft policy statements, with reply comments due May 25.
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