FERC last Thursday issued a final rule that implements provisions of the Energy Policy Act of 2005 (EPAct) giving the Commission the authority to coordinate the schedule of other federal and state agencies in processing natural gas pipeline, liquefied natural gas (LNG) and storage projects and to maintain a consolidated record of all agency decisions for use in judicial reviews.

EPAct designated the Federal Energy Regulatory Commission as the “lead agency” for coordinating all federal authorizations for natural gas infrastructure projects and for the purpose of complying with the National Environmental Policy Act of 1969. It also empowered FERC to establish a schedule for state agencies to complete their reviews of gas projects that are subject to the requirements of the federal Coastal Zone Management Act (CZMA), the Clean Air Act and the Clean Water Act statutes.

The Commission’s rule adopts a default schedule for all agencies, including states that hold delegated authority under various federal statutes, to follow if FERC decides not to issue a notice setting out a specific schedule for a particular project. The time frames established by FERC only apply to agencies that do not already have deadlines established by federal law.

In cases where the Commission does not set a schedule, the rule would require other federal and state agencies to act on proposed gas projects within 90 days of the issuance of the Commission’s final environmental impact statement (FEIS).

The EPAct provisions “in no way undermine the review by other federal agencies and state agencies with delegated authority to administer federal laws,” said Chairman Joseph Kelliher. “They will continue to review applications by project developers in the same manner, applying the same standards,” he noted.

“Even though our rule is only now final, and subject to judicial review, there has already been a legal test of the statutory provisions. There was a test in the Islander East [Pipeline] proceeding, and the challenges to the constitutionality of the statutory provision [by the state of Connecticut] were soundly rejected,” Kelliher said.

Within hours of EPAct being enacted into law in August 2005, sponsors of the Islander East Pipeline project took advantage of language in the measure and challenged in federal court the state of Connecticut’s refusal to issue a water quality permit for the Connecticut-to-Long Island natural gas pipeline. The U.S. Court of Appeals for the Second Circuit ruled in the pipeline project’s favor earlier this month (see NGI, Oct. 9).

In addition to coordinating other agency reviews, the rule also requires FERC to maintain a complete, consolidated record of all agency decisions with respect to a particular gas infrastructure project. The record would serve as the basis for judicial appeals of Commission decisions, and reviews of state decisions that claim a gas project is inconsistent with coastal protections under the CZMA law.

In addition, it requires each agency to submit electronically to the Commission a copy or summary of its decision and an index of documents and materials that were pertinent to the proceeding. The filing would be made within three days of the agency’s final decision. If a federal or state agency fails to reach a decision, the final rule requires the agency to notify FERC within three days of the scheduled deadline, and to file an index of the documents and materials in the agency’s inconclusive proceeding.

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