Pipeline & Gas Journal...May 2013
Concern in Congress about insufficient interstate pipeline
infrastructure is prompting imminent introduction of a bill to speed up
construction applications at the Federal Energy Regulatory Commission
(FERC). The bill would force federal agencies required to provide input on a
pipeline's environmental impact to meet deadlines for submitting
comments to FERC. An increasing reliance on natural gas by electric
utilities has sparked worries about pipeline bottlenecks, particularly
in New England and the Midwest. Those concerns were amply in evidence at
hearings in the House Energy & Commerce Committee's subcommittee on
energy and power March 19.
Rep. Mike Pompeo (R-KS), a member of the Energy and Power
subcommittee, referred to a February 2013 report from the Government
Accountability Office (GAO) which reported that FERC does not track the
time it takes for a construction permit to be approved because the
agency believes that information has "limited usefulness."
Doing its own research the GAO found that for those projects that
were approved from January 2010 to October 2012, the average time from
pre-filing to certification was 558 days; the average time for those
projects that began at the application phase was 225 days.
Two FERC commissioners testified at the hearings: Philip Moeller and
Cheryl LaFleur. Pompeo asked whether FERC should keep statistics on how
long it takes to approve a new pipeline. Both answered "yes." Then he
asked whether they were aware that a report from the Interstate Natural
Gas Association of America (INGAA) found that 20% of pipelines
experience delays of at least six months after a National Environmental
Policy Act (NEPA) review of the application is completed. NEPA requires environmental impact statements on a project, which, in
the case of pipelines, means that FERC must wait for input from
agencies around the government, such as the Fish and Wildlife Service.
Those agencies often drag their feet.
Pompeo said he is developing legislation to force agencies outside of
FERC to meet strict timetables for providing environmental input. "This
will allow pipelines to move forward so they can have a little more
certainty, I hope my bill will have bi-partisan support." Pompeo did not
indicate when he will introduce his bill.
Moeller responded: "The challenges that you alluded to are the
resource agencies typically don't have the accountability to come back
with an answer. It is the way the statute is. If you created a timeline
of responsibility, I think they would be a lot more responsive."
In addition, Pompeo criticized President Obama for suggesting in
mid-March that FERC include the impact on "climate change" in any NEPA
analysis it does on a new pipeline or any other project. He asked
Moeller whether FERC has that authority. Moeller said he would have to
review court decisions before responding.
A FERC spokeswoman queried
three weeks after the hearing said FERC does not yet have an answer.
Pompeo seemed to get support from one key Democrat on the issue of
including climate change impact in NEPA reviews. Rep. Gene Green (D-TX)
said, "I agree with my colleague that FERC is not prepared. We have
problems on both sides of the aisle giving agencies responsibilities
they are not ready for."
Most of the hearing, however, was devoted to questions about what
FERC could or should do to help electric utilities obtain dependable
access to natural gas. Demand for natural gas has skyrocketed as
coal-fired generation has been taken off the board because, in large
part, of Environmental Protection Agency regulations meant to discourage
its use.
FERC has been conducting technical conferences and meetings to
determine whether it needs to either develop new rules on such issues as
scheduling and communications or leave solutions to the regions, which
have different mixes of energy inputs and pipeline infrastructures.
"The challenges are serious, very real, and somewhat urgent,
especially in New England and the Midwest," said Moeller. "Some in the
industry believe nothing short of a major blackout will provide
sufficient motivation to the various stakeholders to solve the problems
facing us."
After the hearings, Don Santa, president and CEO of INGAA, urged FERC
to take prompt action to address the deficiencies in electric power
market rules that create unnecessary and avoidable risks to electric
power reliability.
“We recognize that many see the problem as one of insufficient
pipeline capacity. While we agree that pipeline capacity expansion in
some regions is necessary, it is important to clarify that the root
cause of the problem is a structural flaw in the deregulated wholesale
electric power markets,” he said. “
These markets fail to compensate for electric reliability, regardless
of fuel the generator uses to create electricity. This, in turn,
discourages electric generators from holding firm pipeline capacity, a
prerequisite for natural gas pipeline expansion," Santa said.
It is worth noting in passing that Rep. Bobby Rush (D-IL), the senior
Democrat on the Energy and Power subcommittee, focused his opening
statement on "lack of access by minorities and women" to jobs in the
pipeline industry. He quoted a recent GAO report which said, according
to Rush, that the levels of participation by minorities in the pipeline
industry are "so small as to be negligible." Rush did not mention any
action he might be taking to address that issue.
