August 2017, Vol. 244, No. 8

Government

Government

Congress Considers Dueling FERC Pipeline Approval Reforms

The House and Senate are on a collision course sponsoring different pieces of legislation that attempt to give the Federal Energy Regulatory Commission (FERC) new authority to speed approval of new pipeline projects.

The bill the House Energy & Commerce Committee passed on June 28 ups the ante in favor of the industry compared to an earlier draft of the “Promoting Interagency Coordination for Review of Natural Gas Pipelines Act” (H.R. 2910) introduced in May, which generally followed the lines of similar legislation introduced in past Congresses, but never passed.

The new version that passed the committee included several new elements aimed at giving FERC additional leverage to greenlight projects if other federal agencies dragged their feet on environmental reviews required by their own laws. For example, the Commerce Department often reviews projects under the Coastal Zone Management Act as does the Environmental Protection Agency under the Clean Water Act.

Cathy Landry, spokeswoman for the Interstate Natural Gas Association of America (INGAA), says her group supports the revised House bill, which  “strengthens FERC’s lead agency role under the National Environmental Policy Act and encourages broad permitting agency participation in the development of a single environmental review.” The House bill attracted only two Democratic votes, indicating it may have a difficult time passing the Senate even if the Senate version was similar, which it is not.

The House committee’s Democratic staff published a memo criticizing some elements in the new version and stated the provisions do not address concerns raised by a FERC official at the subcommittee hearings. The bill introduces new terms such as “NEPA review” and “Project-related NEPA review” and creates a status for certain agencies called “non-designation” that prohibits such agencies from being able to “request or conduct a NEPA review that is supplemental to the project-related review conducted by the Commission…”

The bill prohibits FERC from considering any comments or other information provided by a non-designated agency or including its comments or supplemental information in the record. Other new language introduced in H.R. 2910 requires agencies responsible for federal authorizations to deem applications for such authorizations “sufficiently complete for the purpose of commencing consideration, regardless of whether supplemental information is necessary to enable the agency to complete the consideration required by law…”

None of those provisions are found in the “Energy and Natural Resources Act of 2017 (ENRA)” (S. 1460), a bipartisan bill introduced June 29 by Sens. Lisa Murkowski, (R-AK), chair of the Energy and Natural Resources Committee, and Maria Cantwell, (D-WA), the panel’s ranking member. That wide-ranging energy bill covering electric, renewable and other issues is very similar to one the Senate passed in 2016 with 85 votes in favor.

S. 1460 contains Section 3103 called “FERC process coordination.” It gives the agency authority to approve a project in 90 days after it has determined an application is categorically excluded under the NEPA, or the notice of availability of the final environmental impact statement, or a finding of no significant impact is made available to the affected public. That is the standard language of past House and Senate bills. Section 3103 has none of the new terms and provisions found in the House bill.

Along with Democrats, environmentalists are also likely to oppose the modified House bill. Carl Weimer, executive director, Pipeline Safety Trust, said, “H.R. 2910 as passed by the House Energy and Commerce committee would appear to be another FERC streamlining solution looking for a problem. Even FERC has testified that their current NEPA process leads to 88% of projects getting approved within a year and that the major cause of delays is not from other agencies, but from industry applicants not providing information in a timely manner.”

Court Tosses EPA Suspension of Methane Rule

A federal appeals court in Washington told the Environmental Protection Agency on July 3 that it could not delay the compliance deadline for new air emission rules, which will force interstate pipelines to monitor compressor stations quarterly for emissions of methane and adopt what the Interstate Natural Gas Association of America views as an overly expensive leak detection and repair approach (see last month’s column).

The EPA in April suspended compliance for 90 days beyond the June 3 deadline included in the final rule published by the Obama administration. The agency said more recently it wanted to extend that 90-day extension to two years. The federal appeals court will hold a hearing on that two-year suspension separately.

The court did say the EPA could reconsider the 2016 rule that requires compressors with wet seals to achieve a 95% reduction of methane and VOC emissions through flaring, or by routing captured gas back to a process. Rod packing systems in reciprocating compressors will have to be replaced at or before every 26,000 hours of operation or every 36 months.

Process Streamlined for Onshore Leasing Permits

Secretary of the Interior Ryan Zinke on July 7 signed an order aimed at improving the permitting process on federal lands and to identify solutions to improve access to additional parcels of federal land that are appropriate for mineral development.

Although statute requires the department and the Bureau of Land Management (BLM) to process an Application for Permit Drill (APD) review within 30 days, the average time to process an APD in fiscal year 2016 was 257 days. The directive should improve the Federal Onshore Oil and Gas Leasing Program and the Federal Solid Mineral Leasing Program, which is a major source of income for the federal government.

“Oil and gas production on federal lands is an important source of revenue and job growth in rural America but it is hard to envision increased investment on federal lands when a federal permit can take the better part of a year or more in some cases. This is why I’m directing the BLM to conduct quarterly lease sales and address these permitting issues. We are also looking at opportunities to bring support to our frontline offices that are facing the brunt of this workload,” Zinke said.

As of Jan. 31, 2017, the BLM had 2,802 APDs pending. The five BLM field offices with the highest number of pending APDs are listed below and account for 2,060, or 74%, of the total pending APDs:

• Casper, WY: APDs pending: 526
• Vernal, UT: APDs pending: 506
• Dickinson, ND: APDs pending: 488
• Carlsbad/Hobbs, NM: APDs pending: 388
• Farmington, NM: APDs pending: 152

Last year the department canceled or postponed 11 lease sales. The Trump administration has already held more lease sales in the first six months than in the previous year, offered more acreage in those sales, and raised more revenue than in the same time period last year, Zinke said.

“As is outlined in this order, we will look at ways to improve the process and make sure regulations serve their intended purpose rather than create a mountain of useless paperwork,”  he said.

An applicant pays a non-refundable $9,610 processing fee to the BLM per APD filed.