Rep. Richard Pombo (R-CA) last week asked FERC to identify any examples in which the Coastal Zone Management Act (CZMA) has interfered with boosting supplies of natural gas to the Northeast. At the same time, a pipeline association urged legislation to streamline the CZMA processes.

“Americans have been demanding the benefits of greater amounts of electricity increasingly generated by natural gas-fired power plants,” Pombo said. “If laws under my jurisdiction are driving up costs to consumers, threatening electrical reliability and costing Americans jobs and energy security, I need to know about it.”

“As chairman of the House Resources Committee and co-chair of the Speaker’s Task Force on Affordable Natural Gas, I am interested in your investigation as it relates to the availability of natural gas supplies in the Northeast,” wrote Pombo in a letter to FERC Chairman Pat Wood that was recently posted on FERC’s web site. “It is clear to me that the United States has a serious and growing problem of natural gas availability and distribution.”

Pombo said that he is “further concerned that certain aspects of my Committee’s jurisdiction, including the implementation of the Coastal Zone Management Act (CZMA), may in fact, be increasing pressure on natural gas availability and price. I am concerned that interpretations of the Act may be stopping the construction of pipelines that could alleviate natural gas shortages and price spikes to consumers.”

Pombo therefore asked that FERC include in its investigation “a review of the pipeline capacity in the region, and identify any instances where CZMA has interfered with increasing supplies of natural gas to the region. If natural gas supplies are restricted, the price of natural gas will go up. I need to know FERC’s assessment of the degree to which well-intentioned Acts like the Coastal Zone Management Act are adversely affecting consumers and threatening the deliverability of gas.”

He said the capacity review could be part of an ongoing investigation into whether New England power suppliers in January improperly sold natural gas to other users during a cold snap.

Within days of the deep freeze that struck much of New England in mid-January, Connecticut Attorney General Richard Blumenthal launched an investigation looking at the actions of power suppliers. Blumenthal said that he had obtained information that some generators sold natural gas on the spot market that could have otherwise been used for their own power plants during the recent power supply crunch. FERC has started its own investigation into the matter.

Ironically, it was Blumenthal who also led the opposition to a major new gas pipeline in the region using the CZMA. Connecticut still is fighting against the Islander East project, which would extend 50 miles from New Haven, CT, across Long Island Sound to Suffolk County (Long Island) near Yaphank, NY, delivering 285,000 Dth/d of gas initially and ultimately 400,000 Dth/d.

New York successfully used the CZMA to block the proposed 442-mile, 700 MMcf/d Millennium pipeline. The Commerce department upheld the state’s decision in December, proving that the CZMA is an effective way for states to prevent federally approved interstate pipelines from being constructed.

Meanwhile the Interstate Natural Gas Association of America (INGAA) defended provisions of the pared-down Senate energy bill (S. 2095), saying it would not deny states their rights under CZMA, but rather would simply streamline the appeals process for pipelines to challenge states’ consistency decisions that block construction of proposed interstate transportation facilities.

“State governments now have ample opportunity ‘to have input on proposals regarding pipeline construction,’ and would continue to have that ample opportunity should the provisions in S. 2095 be enacted,” wrote Donald F. Santa Jr., INGAA president, in a letter to Sens. Barbara Boxer (D-CA) and Elizabeth Dole (R-KS).

Santa said he was attempting to allay a “number of concerns” that the two senators raised in a March 5 letter to Sen. Pete Domenici (R-NM), chairman of the Senate Energy and Natural Resources Committee, about the bill’s potential to limit states’ authority under the CZMA.

Rather than trying to restrict states’ rights, these provisions seek to “address the emerging pattern of protracted and unnecessary delays when the Department of Commerce reviews appeals [by pipelines] to state consistency determinations” that delay or block the construction of needed pipeline facilities, he told Boxer and Dole.

He noted the State of New York ruled that two pipeline projects — Millennium Pipeline and Islander East — were inconsistent with its coastal zone management laws, after FERC had already certificated the projects. The Commerce Department denied Millennium’s appeal of New York’s ruling in December, which effectively stranded the project. Islander East’s appeal still is pending.

“This occurred despite the fact that FERC’s comprehensive and inclusive environmental review process provided the state agency with a full opportunity to participate and have its positions heard along with those of the other state and federal agencies. Because compliance with the CZMA is a prerequisite to constructing a pipeline in a coastal zone, this manipulation of the process has placed individual states in the position where they effectively can block the construction of federally-approved interstate pipelines,” Santa said.

The Senate energy bill “would rectify…flaws” in the appeals process at the Commerce Department, he said. First, it would set a precise timetable (270 days) for the Commerce Secretary to collect additional information and issue a decision on a pipeline’s appeal of a state consistency ruling. Second, it would require the Commerce Department to use the record compiled by FERC in a certificate proceeding as the “exclusive record” when deciding an appeal.

“In sum, these new provisions would not substantively affect the authority that the CZMA delegates to the states. States would remain free to make CZMA consistency determinations, just as they do now. What these new provisions hopefully will achieve is greater administrative economy and coordination among the various federal and state agencies with jurisdiction over interstate pipeline permitting,” Santa noted.

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