U.S. FERC Landowner Protection Rule Likely to Delay Gas Projects

(Reuters) — The U.S. government has adopted rules to protect landowners affected by natural gas pipeline or liquefied natural gas plant development by forbidding construction until the Federal Energy Regulatory Commission (FERC) acts on requests for rehearing of any decisions for a permit. 

The rule, issued late Tuesday, states that even if a project has all other certifications and permissions to begin construction, it must wait until FERC acts on rehearing requests. The commission has said it would strive to answer rehearing requests within 30 days.

Analysts at Height Capital Markets in Washington said on Wednesday that they expect the new rule "will prevent new projects from starting construction for several months while FERC addresses the issues in rehearing requests."

In the past, while landowners and other stakeholders awaited FERC decisions on rehearing requests, the commission allowed energy companies to use federal eminent domain proceedings to access land and start and sometimes even complete construction.

FERC said some past rehearing requests involved complex issues that required more than 30 days to resolve. In such instances, FERC issued tolling orders granting itself more time to consider the requests.

Analysts at ClearView Energy Partners LLC said FERC probably issued the rule now because it likely expects an adverse ruling in the Allegheny Defense Project v. FERC case by the U.S. Court of Appeals for the D.C. Circuit, and that "this is a move to secure an outcome more to its liking."

That case involved an appeal from landowners and other stakeholders against construction of Williams Cos Inc's Atlantic Sunrise gas pipeline project from Pennsylvania to South Carolina. 

In that case, FERC allowed Williams to use eminent domain and build the pipe before deciding on rehearing requests. Atlantic Sunrise entered service in 2018.

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