The amount of time needed to obtain required permits for interstate natural gas pipeline projects from federal agencies other than FERC has increased since the passage of the Energy Policy Act of 2005 (EPAct), according to a new study issued by the Interstate Natural Gas Association of America (INGAA).
Signed into law by President Bush in 2005, EPAct gave energy companies multi-billion dollar tax breaks, clarified that the Federal Energy Regulatory Commission (FERC) has sole authority over the siting of liquefied natural gas import terminals and laid the groundwork for oil and natural gas exploration and production to begin on the coastal plain of the Arctic National Wildlife Refuge (see NGI, April 25, 2005). The legislation was also meant to streamline and expedite federal authorizations for interstate gas pipeline projects.
However, the percentage of federal authorizations issued more than 90 days beyond FERC’s issuance of an Environmental Impact Statement or Environmental Assessment increased to 19.51% after implementation of EPAct, compared with 3.42% prior to implementation, according to the INGAA Foundation report. Overall delays increase to 28.05% from 7.69%.
The study also found that the only provision in EPAct that provides an applicant with recourse in the face of agency delay — a petition to the U.S. Court of Appeals for the D.C. Circuit — has rarely been used.
“There are many undesirable consequences of permitting delays, ranging from increased project costs to missed in-service dates, along with a variety of associated adverse business, environmental and other implications,” said INGAA Foundation CEO Don Santa. “The study suggests amending the Natural Gas Act to provide FERC effective tools for enforcing deadlines at other agencies regarding natural gas pipeline project applications. That’s something we hope legislators will consider…”
Through a survey of 51 interstate natural gas pipeline projects from both before and after the effective date of the act, the study identified various causes for the delays, including agency inexperience and inadequate agency staff, interagency conflicts, FERC’s inability to enforce deadlines, applicant changes to projects requiring additional or revised environmental reviews, and site-access problems. No causal link was identified between the passage of EPAct and the increase in time required to obtain federal authorizations for pipeline projects.
The report concluded that delays could be reduced by providing consequences when agencies fail to meet FERC deadlines (such as granting automatic approval or allowing FERC to grant approval in an agency’s stead if an agency does not respond by the deadline), planning for projects early and thoroughly, and establishing better applicant-agency relationships and lines of communication.
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