FERC easing rules to expedite construction of natural gas projects

The U.S. Federal Energy Regulatory Commission (FERC) has taken action to remove regulatory obstacles and speed up the construction of natural gas infrastructure projects in the United States.   

Following petitions from the Interstate Natural Gas Association of America (INGAA), a not-for-profit trade association representing interstate natural gas pipeline companies operating in the U.S., FERC has issued two orders to remove legislative requirements deemed to be unnecessary, as they were causing delays in natural gas infrastructure projects.

“New and expanded natural gas infrastructure is essential to help America avoid a grid reliability crisis,” said FERC Chairman Mark Christie. “As the demand for electrical power continues to grow, getting more natural gas generation built is critically important and that means we must get natural gas infrastructure to supply that generation built more quickly as well, so that we can provide consumers with reliable power.”

The first order introduces a two-year temporary waiver to raise the blanket certificate cost limits under which natural gas companies are allowed to carry out pipeline modifications or construction without having to obtain a case-by-case certificate authorization by the Commission. 

As explained by the Commission, a blanket certificate process streamlines the authorization of routine, recurring activities by categorizing them under a single approval.

Citing an “urgent, nationwide need for enhanced and expanded natural gas infrastructure,” INGAA asked that the blanket certificate cost limitation for prior notice projects be raised. FERC approved this and agreed to increase the costs of projects that can be constructed from $41.1 million to $61.6 million for projects constructed and placed in service by May 31, 2027.

FERC expects this change to give natural gas companies increased flexibility and lessen regulatory burdens for certain activities related to their natural gas facilities. The Commission also sought public input as it is considering permanently adjusting the blanket certificate cost limitations.

The second order grants a one-year waiver of the Commission’s rule that prevents authorizations to proceed with the construction of natural gas facilities from being issued while certain requests for rehearing are pending. The order is accompanied by a notice of proposed rulemaking proposing to remove the rule from the Commission’s regulations altogether.

A previous order, Order No. 871, blocked the start of pipeline construction until FERC finished reviewing any rehearing requests. Claiming that this increased the number of rehearing requests, turning the regulation into a tool to delay authorized projects, and imposing burdens on developers that are not justified, INGAA asked that it be rescinded.

The Commission accepted this, noting that the temporary waiver would eliminate delays in the development of energy infrastructure projects and use lawful emergency authorities to expedite them.

While FERC wants to speed up natural gas projects, some do not view offshore projects so favorably.

Last week, two U.S. governors, Josh Stein of North Carolina and Henry McMaster of South Carolina, sent a joint letter to the United States’ administration to remove the two states’ outer continental shelf lands from consideration in the upcoming 11th National Outer Continental Shelf (OCS) Oil and Gas Leasing Program.

Since the two states’ coastal economy contributed $9.6 billion to the GDP in 2021, the two governors argue that these industries would be “highly vulnerable” to disruption from offshore drilling.