Now that its quorum has been restored, one of the Federal Energy Regulatory Commission‘s top priorities will be breaking the logjam of natural gas pipeline projects needing approval that built up over the six months since the body was last able to perform its duties.
The U.S. Senate brought FERC back to fighting shape earlier this month with the confirmation of commissioners Republicans Robert Powelson, a member of the Pennsylvania Public Utilities Commission and president of the National Association of Regulatory Utility Commissioners, and Neil Chatterjee, a senior energy policy adviser to Senate Majority Leader Mitch McConnell, R-Ky.
The two men, along with sitting Commissioner and acting Chair Cheryl LaFleur, a Democrat, give the five-member agency the three commissioners it needs to decide on any action requiring a vote.
While there’s a lot for the commission to catch up on, from projects to policy and regulatory matters, gas pipeline proposals are likely to be at the top of the list for quick action, said David Wochner, a partner at K&L Gates LLP and the firm’s policy and regulatory practice area leader.
“Pipeline infrastructure in the natural gas space … certainly provides one of the best opportunities for a newly constituted FERC,” Wochner said. “It’s an opportunity to really advance President Trump’s infrastructure initiatives, which obviously he talked about all through the campaign.”
There are five projects that are ready to be reviewed by the commission:
· The $5 billion Atlantic Coast Pipeline, a Dominion Energy Inc. project
· The $3.5 billion Mountain Valley Pipeline — a joint effort between EQT Midstream Partners LP, NextEra Energy Inc. subsidiary NextEra US Gas Assets LLC, Consolidated Edison Inc. subsidiary Con Edison Transmission Inc., WGL Holdings Inc. unit WGL Midstream, and RGC Resources Inc. unit RGC Midstream LLC
· The $2.2 billion Nexus Pipeline, a DTE Energy Co. and Enbridge Corp. venture
· The $1.8 billion Mountaineer Xpress Pipeline, a TransCanada Corp. project
· The $1 billion PennEast Pipeline, a joint effort between Southern Co. Gas subsidiary AGL Resources, New Jersey Resources Corp. subsidiary NJR Pipeline Co., PSEG Power LLC, South Jersey Industries Inc. unit SJI Midstream, Enbridge Corp., and UGI Corp. subsidiary UGI Energy Services LLC
All have received their final environmental impact statements from FERC and are waiting for commissioners to decide whether to issue certificates of public convenience and necessity. Those certificates, issued under Section 7 of the federal Natural Gas Act, convey the power of eminent domain to the project owners to use as they construct a pipeline along a right-of-way approved by FERC.
Wochner said he thinks the Nexus and PennEast projects are the best candidates to be handled first, saying they’re both significant infrastructure projects that should be prioritized.
Dena Wiggins, president and CEO of the Natural Gas Supply Association, said there’s no FERC meeting until September, so that would be the earliest any project could be aired in a public meeting. She said the projects could be certified “notationally,” meaning the members can vote on paper — outside of a meeting — and issue a certificate that way. But she added that’s unlikely.
“For big orders, usually staff makes a presentation to the commissioners,” Wiggins said. “Sometimes commissioners will want to make public statements.”
While the pipeline projects have made it through most of the FERC process so far, Kelly Martin, deputy director for the Sierra Club‘s Beyond Dirty Fuels campaign, said that won’t be the end of the story.
“There is major pushback from communities around use of eminent domain, especially in Virginia and in West Virginia,” Martin said. “There are landowners that don’t want their land taken through the use of eminent domain when there’s no public good in the state where they are, or any need.”
In fact, both the Mountain Valley and Nexus pipelines are the subject of new lawsuits, both targeting FERC’s authority to grant eminent domain powers to pipeline companies.
Ohio residents are suing FERC and Nexus Gas Transmission LLC, the company created by DTE and Enbridge to develop the project, alleging the pipeline will primarily export gas, disqualifying it from meeting the “necessity” component of a FERC certificate of approval. The plaintiffs say exporting gas is not a public use for purposes of the takings clause of the Fifth Amendment and is beyond the scope of the Natural Gas Act and FERC jurisdiction in cases involving eminent domain.
Separately, Virginia residents are suing FERC and Mountain Valley LLC, the company created to carry out the Mountain Valley Pipeline project, in another Fifth Amendment takings clause constitutional challenge to the eminent domain provisions of the Natural Gas Act.
Eugene Elrod, a partner at Latham & Watkins LLP, said the lawsuits show that landowners and other parties are looking for new ways to stop pipeline projects.
“If the lawsuits are successful, they would have far-reaching effects, because all pipelines that get certificates of public convenience and necessity from FERC need to exercise this power of eminent domain to condemn the property over which the pipeline will run,” Elrod said.
Martin said groups like the Sierra Club could also ask FERC to reconsider any authorizations granted on climate change or cumulative impact grounds.
“A major concern for us is the climate impacts of methane, which is released at the drilling site, from the pipelines along the way and then from a power plant, if that’s the end use,” she said.
–Additional reporting by Adam Lidgett, Michael Phillis and Keith Goldberg. Editing by Philip Shea and Katherine Rautenberg.
By Juan Carlos Rodriguez Law360, New York (August 14, 2017, 8:48 PM EDT) —
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