FERC Withdraws Rules that Would Stop Pipelines and LNG Projects
In late February, we alerted about pending FERC rules that would require the Commission to consider a natural gas pipeline or LNG export project's greenhouse gas impacts during construction, when in operation, and (much worse) when the natural gas it delivers is used or burned. That cost-benefit calculus would have become a key factor in FERC's decision whether to grant the certificate necessary for construction.
The policy would effectively give FERC's majority a blank check to deny a project's certificate on subjective, ideological or political grounds even if there is a clear market need for the natural gas it would deliver.
EEIA and other trade groups mounted a vigorous opposition directed at Congress, pointing out the unwisdom of FERC adopting new rules restricting natural gas production, pipelines and exports at exactly the time when America's and our allies' security, and in some cases survival, depends on our ability to replace Russian natural gas with America's LNG. Key Congressional leaders, including Senator Manchin, agreed and weighed in strongly with FERC's Commissioners.
The effort had its intended impact when FERC announced yesterday that the rules would not be implemented pending further consideration. A good recap was just published by the Wall Street Journal, under the headline "A Biden Regulator is Mugged by Energy Reality". Here's an excerpt:
"Federal regulators rarely backtrack, especially as quickly as the Federal Energy Regulatory Commission. Yet on Thursday Democratic commissioners hit pause on a new policy requiring a greenhouse-gas analysis for natural gas pipelines and export projects. Good for them.
"FERC's climate policy was a gift to Vladimir Putin. His bloody war on Ukraine and weaponization of Russian gas against Europe illuminate the stakes. Perhaps Democratic commissioners were mugged by energy reality like the Europeans. We're told Democratic commissioners were also stunned by the backlash in Congress, especially from Joe Manchin."
According to the Financial Post, "The Federal Energy Regulatory Commission says it will delay requirements to consider greenhouse gas emissions before approving liquefied natural gas terminals and other gas projects, after lawmakers complained the policy would harm the industry just when Europe needs U.S. gas due to the crisis in Ukraine."
The fight's not over. In announcing the rules' suspension, FERC Chairman Richard Glick noted that "...in light of concerns that the policy statements created further confusion about the Commission's approach to the siting of natural gas projects, the Commission decided it would be helpful to gather additional comments from all interested stakeholders, including suggestions for creating greater certainty, before implementing the new policy statements."
EEIA will file comments with FERC opposing the rules. We will also continue to urge Congressional leaders, during a round of meetings next week, to keep the pressure on FERC not to adopt rules that restrict America's ability to leverage its natural gas resources in support of our national security.
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