The Federal Energy Regulatory Commission pulled back on two policies adding new environmental hurdles to gas infrastructure projects following a torrent of complaints from the oil and gas industry and Republicans.
The agency redesignated its recent revised pipeline certificate policy statement and interim greenhouse gas emissions policy statement as “drafts” Thursday, opening them up to further public comment and thereby delaying the implementation of new project requirements designed to reduce greenhouse gas emissions and local pollution.
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Chairman Richard Glick, a Democrat, said the commission took this course to collect additional public input “in light of concerns that the policy statements created further confusion about the Commission’s approach to the siting of natural gas projects.”
Glick also said the commission seeks suggestions “for creating greater certainty” before implementing the policy statements. Commenters may chime in on the draft statements through April 25, and reply comments are due May 25.
The agency’s five commissioners voted last month in a 3-2 party-line vote to approve the new policy statements, which were developed as a means of mitigating climate change and pollution.
Under its proposed interim greenhouse gas policy statement, the commission would more stringently take into account the emissions associated with a given project, including emissions resulting from the construction and operation of a project, when determining whether it serves the public interest.
The pipeline certificate policy statement would more closely consider effects to local landowners, as well as impacts of a project to “environmental justice communities,” or those especially subject to pollution.
Oil and gas industry groups, many Republicans, and Sen. Joe Manchin, a West Virginia Democrat, were especially critical of the policies, arguing the agency needs to reduce barriers to the certification of pipelines in the face of high energy prices rather than add new requirements.
During a Senate Energy and Natural Resources Committee hearing earlier this month, Manchin, who chairs the committee, described the policies as advancing “death by a thousand cuts” of the fossil fuel industry.
That the policies would create an uncertain environment for project developers was an especially prominent complaint among opponents.
“We rely on private investment in order to deliver this absolutely strategically important and economically fundamental infrastructure,” Republican Commissioner James Danly, who voted against approving the policy statements, said during the same hearing. “Private investment is impossible when the investors are unable to assess risk premiums, and uncertainty is what drives risk premiums up. The uncertainty that is caused by these pipeline certificate policy statements is profound.”
Democratic commissioners argued that due to recent court decisions vacating some of the agency’s pipeline certificates, it behooved the commission to more closely consider the environmental effects of projects.
“We will balance a project’s benefits with its adverse impacts. Our analysis will then result in decisions that can withstand judicial review,” said Commissioner Allison Clements.
Beyond opening the door to revisions, the biggest change associated with the agency’s decision Thursday is the determination that the two draft policy statements will not apply to pending project applications or to applications filed before the commission finalizes its guidance.
The policy statements as introduced would both have applied to new and pending projects.
Industry groups had before been especially angered by the application of the requirements to pending projects. The American Gas Association complained in a filing that the policy approach is “so nebulous that it calls into question the viability of pending projects and makes the planning of future projects so difficult that it will suppress investment in needed pipeline infrastructure.”
Christi Tezak, a managing director with ClearView Energy Partners, said the decision by the agency to keep pending projects out of it was a win for the industry and enabled the commission to move ahead with Kinder Morgan’s Evangeline Pass, TC Energy’s East Lateral Express, and Iroquois’s ExC gas projects Thursday.
“Making the policy statements prospective upon finalization allows FERC to not only move forward with three projects today but also those still in the building,” Tezak told the Washington Examiner. “That is a big deal.”
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The commission’s vote coincides with President Joe Biden’s visit to a European Union summit, where the White House has promised he will announce new actions to help Europe displace Russian gas from its energy mix.
National security adviser Jake Sullivan said to “expect that the U.S. will look for ways to increase [liquefied natural gas] supplies” to Europe.
Meanwhile, Biden’s environmentalist constituencies are maintaining pressure on his administration not to cede any ground to fossil fuels in looking for solutions to Europe’s energy crisis.
“Permitting construction of any new fossil fuel infrastructure would lock America into decades of ongoing reliance on fossil fuels that is incompatible with President Biden’s climate goals,” Evergreen Action head Jamal Raad said Thursday, urging Biden to instead try to progress green energy.
