Gas pipelines

Gas pipelines

June 05, 2018 | By Keith Martin in Washington, DC

Gas pipeline approvals have come under a spotlight.         

The Federal Energy Regulatory Commission opened an inquiry in April into its process for approving new gas pipeline projects. Comments are due by July 25.

Thom Hirsch, a gas pipeline expert with Norton Rose Fulbright in Washington, said pipeline companies thought initially that the inquiry was an opportunity to help FERC find ways to accelerate pipeline approvals by streamlining the approval process, but it quickly became clear that environmental groups intend to use the inquiry to find ways to slow down new pipeline approvals. Hirsch said that FERC, composed mostly of Trump appointees, has already been taking slightly longer to approve new pipeline projects than the Obama-era commission took.

The inquiry comes at a stressful time for pipeline companies, as an unusually large number of new pipeline projects are teed up to start construction if they can get approved or if approvals already granted, but facing local opposition, survive court challenges. A number of new projects are also in the midst of preparing filings.

FERC is wrestling with a number of questions in the inquiry and looking for input. The questions include how the agency should confirm there is a need for the pipeline. For example, are pipeline precedent agreements enough evidence of public need? “Precedent agreements” are contracts signed with gas suppliers or gas users committing to ship gas on the pipeline subject to certain conditions that are important either to the pipeline or the shipper. These contracts are sometimes with affiliates of the pipeline company.

Another issue is how FERC should account for projected greenhouse gas emissions by the end user of the gas that would be shipped when deciding whether to approve a new pipeline.

Other issues are whether there should be ways to jump to the head of the queue upon a showing of special need and whether any transition relief should be given to pipeline applicants who were already in the queue when the inquiry started in the event the approval process becomes harder.