Rapid expansion of the U.S. natural gas pipeline network to accommodate new supplies of domestic shale gas has been a focus of Congress, prompting hearings and legislative proposals over the last decade regarding the federal role in pipeline siting. Nine related bills have been introduced in the 115 th Congress, including the Promoting Interagency Coordination for Review of Natural Gas Pipelines Act ( H.R. 2910 ), which passed in the House in July 2017, and provisions in the Energy and Natural Resources Act of 2017 ( S. 1460 ). The growth in U.S. shale gas production is driving the expansion of natural gas pipeline infrastructure at the local level (to gather and process the gas) and at the national level to transport natural gas from producing regions to consuming markets, typically in other states. However, if the growth in U.S. shale gas continues as projected, the need for new pipelines could be substantial. One recent analysis by the INGAA Foundation, a pipeline industry research organization, projected the need for approximately 26,000 miles (1,400 miles annually) of new natural gas transmission pipeline between 2018 and 2035; total capital expenditure for these projects could range from $154 billion to $190 billion. Therefore, companies seeking to build interstate natural gas pipelines must first obtain certificates of public convenience and necessity from FERC. Nonetheless, aspects of FERC's current practices remain a focus of attention among policymakers because they have been the subject of FERC dissent, debate in Congress, or litigation in federal court. The Bush, Obama, and Trump Administrations issued a series of executive orders intended to facilitate or expedite the federal permitting of infrastructure projects, specifically including energy infrastructure. Exactly how all of these orders have affected, or may affect, federal review of interstate natural gas pipeline siting under FERC's jurisdiction is not entirely clear, however, due to the complexity of the certification process and permit obligations under related statutory requirements (e.g., NEPA). On April 9, 2018, the FERC chairman signed a memorandum of understanding (MOU) with other federal agencies to implement E.O. 13807 of reducing the time to two years for each agency to complete all environmental reviews and authorization decisions for major infrastructure projects" through implementation of One Federal Decision, communication, concurrent reviews, adherence to a review timetable, and commitment to agency-specific and collective review process enhancements (§V). Accordingly, on April 19, 2018, the commission issued a Notice of Inquiry (NOI) "to examine its policies in light of changes in the natural gas industry and increased stakeholder interest in how it reviews natural gas pipeline proposals." According to its notice, FERC's inquiry focuses on four general aspects of its certificate application review, with specific questions posed under each aspect
relying on precedent agreements to demonstrate project need, eminent domain and landowner interests, evaluating project alternatives and environmental effects, and the efficiency and effectiveness of FERC's certificate processes. FERC's inquiry was opened for public comments through July 25, 2018. FERC's recent Notice of Inquiry covers a number of the key congressional concerns raised either in oversight hearings or bill provisions in the 115 th Congress. Therefore, while FERC's policy review does not guarantee any changes to the gas pipeline certification status quo, it may provide valuable information and context for congressional oversight. If Congress disagrees with FERC's future policy choices based on the findings of its NOI, those findings presumably would provide an informed basis and clear policy context for subsequent legislative proposals. Although recent executive and agency actions, including FERC's agreement with other agencies and its NOI, may lead to changes in FERC policies or process, they are limited to those aspects of gas pipeline regulation which fall directly within the commission's statutory authority under the Natural Gas Act or within its discretion under other federal statutes.
Growth in U.S. shale gas production is driving the expansion of natural gas pipeline infrastructure to transport natural gas from producing regions to consuming markets, typically in other states. If the growth in U.S. shale gas continues as projected, the need for new pipelines could be substantial. One recent industry analysis projected the need for approximately 26,000 miles of new natural gas pipeline between 2018 and 2035; total capital expenditure for these projects could range from $154 billion to $190 billion.
Under the Natural Gas Act, companies seeking to build interstate natural gas pipelines must first obtain certificates of public convenience and necessity from the Federal Energy Regulatory Commission (FERC). The commission's regulatory process for the review of certificate applications consists of application pre-filing, certificate application, application review (including environmental and other agency review), authorization, and post-certificate proceedings. Several aspects of FERC's certificate review practices have been the focus of attention among policymakers because they have been the subject of FERC dissent, debate in Congress, or litigation in federal court. Key challenges to FERC certification involve the assessment of environmental impacts, evaluating project need, review timing, relations with other agencies, changes in industry structure, and issues related to export.
The Bush, Obama, and Trump Administrations issued a series of executive orders intended to facilitate the federal permitting of infrastructure, specifically including energy infrastructure. Exactly how all of these orders have affected, or may affect, federal review of natural gas pipeline siting is not clear. However, on April 9, 2018, FERC signed a memorandum of understanding with other federal agencies to meet the goals in President Trump's E.O. 13807 "of reducing the time to two years for each agency to complete all environmental reviews and authorization decisions for major infrastructure projects."
Expansion of the pipeline network has prompted Congressional hearings and legislative proposals over the last decade regarding the federal role in pipeline siting. At least nine related bills have been introduced in the 115th Congress, including the Promoting Interagency Coordination for Review of Natural Gas Pipelines Act (H.R. 2910), which passed in the House in 2017, and provisions in the Energy and Natural Resources Act of 2017 (S. 1460), pending in the Senate.
On April 19, 2018, FERC issued a Notice of Inquiry (NOI) "to examine its policies ... in how it reviews natural gas pipeline proposals." The commission's inquiry focuses on four general aspects of its certificate application review: relying on contracts from future customers to demonstrate project need, eminent domain and landowner interests, evaluating project alternatives and environmental effects, and the efficiency and effectiveness of FERC's certificate processes. FERC's inquiry was opened for public comments through July 25, 2018. The commission has not stated any timetable for completing this proceeding.
FERC's NOI covers key congressional concerns raised either in hearings or bill provisions in the 115th Congress, as well as issues arising in certificate proceedings and litigation. Therefore, while FERC's policy review does not guarantee any changes to the gas pipeline certification status quo, it may provide valuable information and context for congressional oversight. If Congress disagrees with FERC's future policy choices based on the findings of its NOI, those findings presumably would provide a basis and policy context for subsequent legislative proposals. Furthermore, although recent executive and agency actions, including FERC's agreement with other agencies and its NOI, may lead to changes in FERC policies or process, FERC is limited to those aspects of gas pipeline regulation which fall directly within the commission's statutory authority under the Natural Gas Act or within its discretion under other federal statutes.