Congress May Speed Pipeline Permits

MONDAY, JULY 15, 2013

Pipeline projects could see quicker permitting approval under a federal bill that has supporters demanding accountability and opponents wary of environmental harm.

H.R. 1900, "Natural Gas Pipeline Permitting Reform Act," proposes "to provide for the timely consideration of all licenses, permits, and approvals required under federal law with respect to the siting, construction, expansion, or operation of any natural gas pipeline projects."

Rep. Mike Pompeo, R-KS, introduced the bll May 9, and it was then referred to the House Committee on Energy and Commerce.

The committee's Energy and Power subcommittee held a public hearing Tuesday (July 9) on the bill and voted 17-9 to forward the measure to the full committee Wednesday (July 10).

The bill's co-sponsors are Reps. Cory Gardner, R-CO; Bill Johnson, R-OH; Pete Olson, R-TX; and Jim Matheson, D-UT.

Seeking to Set Deadlines

Under the Natural Gas Act, the Federal Environmental Regulatory Commission (FERC) reviews applications for the construction and operation of natural gas pipelines that cross state lines and ensures that applicants comply with Department of Transportation safety standards.

But the commission has no jurisdiction over pipeline safety and security, requiring it to work with other agencies for those responsibilities.

The proposed legislation seeks to amend part of the Natural Gas Act by adding new subsections that would:

  • Require FERC to approve or deny natural gas pipelines not later than 12 months after providing public notice of the application;
  • Require the agency responsible for issuing any license, permit or approval for the siting, construction, expansion or operation of any natural gas pipeline project to approve or deny the issuance of the license not later than 90 days after FERC issues its final environmental document relating to the project;
  • Allow an agency to request a 30-day extension from FERC, which will be granted if the commission finds the extension is necessary because of "unforseen circumstances beyond the control of the agency"; and
  • Automatically approve pipeline projects if the responsible agency fails to approve or deny the license within the specified time periods.

Pompeo introduced the bill to put more responsibility on the agencies to complete pipeline permitting faster.

"[FERC] is completely at the mercy of other agencies," Pompeo remarked. "All this legislation does is bring accountability to those agencies. We all have deadlines in life that we have to meet, and that doesn't seem like an unreasonable task."

Determining Achievable Timelines

FERC Commissioner Philip D. Moeller testified Tuesday that his agency "generally performs very well at considering energy projects, an observation that I believe was largely supported in the February 2013 report from the Government Accountability Office."

The U.S. Government Accountability Office analyzed public records for pipeline projects that were approved from January 2010 to October 2012 and found that the average time from pre-filing to certification was 558 days; the average time for projects that began at the application phase was 225 days. However, GAO reported that it found little comprehensive data on the intrastate process.

Moeller noted that the time frames for project applications vary greatly because projects can range from "minor and uncontested upgrades" to new pipelines "crossing a number of state lines, and covering hundreds of miles."

Rep. Pompeo

Rep. Mike Pompeo, R-KS, sponsors the bill that would process pipeline permits faster, putting stricter deadlines on agencies.

Citing an internal review from FERC, Moeller said that, since Federal Fiscal Year 2009, a total of 548 applications have been submitted to FERC, and it takes the commission an average of 75 days to decide on projects in the "Prior Notice/No Protests" category and an average of 375 days to decide on projects in the "Protests, Policy Issues, and/or Major Construction" category.

Moeller suggested that the bill would be more effective if it was clarified to allow a 12-month timeline for action once FERC determines that the application is complete, a time frame that FERC staff determined as achieveable.

In its discussions with stakeholders, GAO found that several factors can affect the permitting process time frame, including different types of federal permits or authorizations, delays in the reviews needed by government stakeholders and incomplete applications.

GAO's report on pipeline permitting, published in February 2013, gathered input from federal and state agency officials and representatives from industry and public interest groups who said that several management practices could help overcome challenges involved in the permitting process. The practices included:

  • Ensure a lead agency is coordinating the efforts of federal, state and local permitting processes for intrastate pipelines;
  • Ensure effective collaboration of the stakeholders involved;
  • Provide planning tools to assist companies in routing pipelines and avoiding sensitive environmental resources;
  • Offer industry the option to fund contractors or agency staff to expedite the permitting process; and
  • Increase the opportunities for public comments.

Both Sides of the Argument

In an opening statement before the meeting Tuesday, Subcommittee Chairman Ed Whitfield said the bill "would modernize the federal review process for natural gas pipeline permit applications."

"Our nation's energy landscape has been dramatically transformed over the last decade, but our energy infrastructure still lags behind," Whitfield stated.

H.R. 1900 pipeline bill

"This bill aims to solve a problem that doesn't exist," Rep. Henry Waxman, D-CA, commented during the committee's hearing on Tuesday.

Showing further support for the bill, and encouraging others to do so, he added that the legislation "will allow new pipeline projects to come online safely and efficiently."

Rep. Eliot Engel, D-NY, was one of several people who voiced concerns over environmental effects.

"Greater use of natural gas has helped us to reduce our carbon pollution. It's a step in the right direction but obviously not the end of the conversation," said Engel.

He continued, "I have concerns about certain language in this bill that could have negative environmental effects. We must allow the agencies to complete their work within a reasonable time frame."

Rep. Henry Waxman, D-CA, also cited his concerns over negative repercussions of the time frame.

"The bill aims to solve a problem that doesn't exist ... Nevertheless, H.R. 1900 would carelessly change this functioning permitting process by arbitrarily limiting the time that FERC and other agencies have to review pipeline applications," said Waxman.

"When faced with these time limits, one of two things will happen: Either agencies will approve permits that do not comply with our nation's health safety and environmental laws, or they will deny permits where time limits prevent them from completing legally mandated pipeline reviews."

However, the time frame is exactly what supporters of the bill think is necessary to keep projects on task.

Energy and Commerce Committee Chairman Fred Upton also supported the bill in his opening statement, noting that the current permitting process results in "significant delays" because numerous state and federal agencies can stall approval.

"This legislation puts the federal permitting process on a reasonable shot-clock with clear deadlines so all federal and state permitting agencies are held accountable," Upton said.

Favoring the bill, Rep. Steve Scalise, R-LA, said, "When you look at this revolution in natural gas that has literally transformed regions of our country ... and yet, when you look at the slow down and the uncertainty when it comes to permitting natural gas, I think it's only fair that federal agencies and Washington bureaucrats are held accountable."


Tagged categories: Federal Energy Regulatory Commission (FERC); Government; Oil and Gas; Pipelines; Program/Project Management; Project Management; Regulations

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