FEDERAL Energy Regulatory Commission discontinues attempt to revise its methodology for examining gas pipeline and LNG project proposals.
The Federal Energy Regulatory Commission (FERC) has announced that it is ending its effort to update its policy statement on assessing natural gas infrastructure projects. This decision comes after a unanimous vote by the commission, following pushback from lawmakers and various groups.
The move was initiated by the new chair of FERC, Willie L. Phillips. The U.S. Department of Energy (DOE) Secretary Chris Wright had previously directed FERC to end the rulemaking process. The DOE's directive may indicate that the department may take on a bigger policy role at the agency.
The decision to end the proceeding was prompted by FERC's belief that the 1999 Certificate Policy Statement provides the appropriate framework for reviewing proposed natural gas projects. Despite issuing updated policy statements in February 2022, FERC never used them to assess pipeline or liquefied natural gas (LNG) proposals.
The U.S. has become the largest LNG exporter in the world, with exports totaling 11.9 billion cubic feet per day last year, according to the U.S. Energy Information Administration. The country has eight LNG export terminals that can handle 14.5 billion cubic feet per day, and another eight are being built that could export about 21.8 billion cubic feet per day, according to FERC. FERC has also approved 10 other export projects totaling 13.2 billion cubic feet per day that aren't under construction as of Sept. 9.
The commission is currently reviewing two LNG export applications and there are two projects in the agency's pre-filing process, according to the commission. FERC said the issues addressed in the draft policy statement are better handled on a case-by-case basis.
The request to end the rulemaking process was supported by the American Gas Association, Natural Gas Supply Association, and American Petroleum Institute. However, it was opposed by the New Jersey Division of Rate Counsel and 10 advocacy groups, including Earthjustice, Sierra Club, and WE ACT for Environmental Justice.
In January 2017, FERC rescinded a related draft policy statement on reviewing a project's effect on the climate after President Donald Trump was inaugurated. This decision was met with criticism from environmental groups, who argued that it was a step backwards in addressing the impacts of fossil fuel projects on the environment.
The end of FERC's proceeding to update its framework for reviewing gas infrastructure applications marks a significant development in the regulation of the natural gas industry in the U.S. It remains to be seen how this decision will impact the assessment and approval of future LNG projects.
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