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FERC Walks Back New Pipeline Rules

Federal energy regulators are reconsidering a recent policy that could have created uncertainty for natural gas infrastructure projects, according to Bloomberg Government and POLITICO Pro (both subscription).

What’s happening: In a rare move yesterday, the Federal Energy Regulatory Commission reversed course and reopened for public comment the policies it put in place in February to heighten permitting requirements to “scrutinize applications for new interstate natural gas pipelines, pledging to look harder at a project’s economic justification and its impact on climate change,” according to Bloomberg Government.

  • Last month, in addition to scrutinizing applications for new interstate natural gas pipelines, “FERC also established a 100,000 tons-a-year greenhouse gas emissions threshold for pipelines and liquefied natural gas terminals to determine whether it will automatically initiate a more stringent environmental impact statement. Those policies took immediate effect on pending applications, the commission said at the time.”
  • The gas industry recently filed multiple requests for rehearing on the matter, urging modification or delay of the policies. 

Why it matters: “Republicans and Senate Energy Chair Joe Manchin have blasted the policy shift as agency overreach, and committee Republicans introduced a bill Wednesday to stop the move from taking effect,” the POLITICO Pro piece reads. “During a Senate Environment and Public Works hearing on energy security Wednesday, Sen. Dan Sullivan (R-Alaska) characterized the policy statements as part of a Biden administration ‘focus on shutting down the  production of oil and gas.’”

What FERC is saying: “‘I generally have heard the policy statements raised additional questions that could benefit from further clarification,’ said Richard Glick, the Federal Energy Regulatory Commission’s Democratic chair, during the panel’s monthly meeting on Thursday,” according to Bloomberg Government.

  • “‘We are re-engaging in inviting stakeholders to comment, on top of the 38,000 comments we’ve already received,’ Glick said. ‘In addition, the policy statements, when they are finalized, will apply only to subsequently filed applicants.’”

What the NAM is saying: “This took a tremendous amount of behind-the-scenes work to get FERC to reconsider,” said NAM Vice President of Energy and Resources Policy Rachel Jones. “I can’t recall a similar time that the commission so quickly reversed course; and a lot of credit goes to all the commissioners for being willing to listen to concerns and be willing to chart a new path forward.”

  • “The guidance they had rolled out earlier this year had a chilling effect on existing and new natural gas pipeline infrastructure projects that we need now more than ever across the U.S. The last thing that manufacturers need right now is higher energy prices, more supply chain or electric reliability problems that pipeline bottlenecks can cause.
  • “This was a huge win for manufacturers, but there is still work to be done, and we will continue to advocate to ensure FERC better understands potential consequences and finalizes a policy that increases certainty and predictability for energy infrastructure projects.”
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