House Subcommittee Approves Bill to Expedite Natural Gas Pipeline Permitting

by Akin Gump Strauss Hauer & Feld LLP
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On July 10, 2013, the House Energy and Commerce Committee’s Subcommittee on Energy and Power approved the Natural Gas Pipeline Permitting Reform Act (H.R. 1900) to ensure that federal agencies expeditiously review and act on applications for natural gas pipeline projects.  Introduced in May by ReP. Mike Pompeo (R-KS), the legislation would add the following new provisions to section 7 of the Natural Gas Act:

  • First, the Federal Energy Regulatory Commission (FERC) would be required to approve or deny an application for a gas pipeline project certificate within 12 months after providing public notice of the application.
  • Second, other agencies responsible for issuing licenses, permits or approvals in connection with the siting, construction, expansion or operation of a gas pipeline project would be required to approve or deny authorization within 90 days after FERC issues final environmental documents.  This deadline may be extended for an additional 30 days upon petition to FERC if circumstances beyond an agency’s control warrant such an extension.
  • Third, if such an agency does not approve or deny the issuance of a license, permit or approval within the time period specified above, such authorization shall be deemed approved.

The Energy Policy Act of 2005 (EPAct05) designated FERC as the lead agency for the purposes of coordinating federal environmental reviews of proposed gas pipeline projects.  Specifically, section 313 of EPAct05 directed FERC to “establish a schedule for all federal authorizations” that are required for proposed gas pipeline projects.  Although FERC promulgated regulations to carry out this statute, H.R. 1900 would codify FERC’s requirement that agencies act within 90 days of FERC’s environmental review and provide FERC with a greater ability to enforce this deadline.

The subcommittee held a hearing on H.R. 1900 on July 9, 2013.  Among the witnesses that testified was Philip D. Moeller, the senior Republican commissioner at FERC.  Commissioner Moeller testified that FERC staff believes that the 12-month deadline is achievable once FERC determines that an application is complete.  However, he did caution that the 90-day deadline for agency review may result in agencies denying certain permits or approving authorizations with burdensome conditions to “protect themselves from accusations of insufficient review.”  Industry trade associations including Edison Electric Institute and the Interstate Natural Gas Association of America publicly support the passage of the bill.

At the July 10 markup of the bill, the subcommittee voted to reject two amendments to H.R. 1900.  The first, introduced by Ranking Member Bobby Rush (D-IL), would have struck the third provision requiring that an authorization be deemed approved if an agency does not act within 90 days (or 120 days, if FERC granted an extension).  Mr. Rush expressed his concern that the existing provision could hinder pipeline development if agencies quickly deny applications to avoid permits from automatically being approved.  The second amendment, introduced by John Dingell (D-MI), would have effectively struck the bill in its entirety and directed the U.S. Government Accountability Office to conduct a study on the gas pipeline permitting process, determine why permitting delays have occurred in the past and recommend potential legislative fixes.  Mr. Dingell stated that the subcommittee needs more information on the current permitting landscape before taking any legislative action.

After rejecting the two amendments by a strictly party line vote, the subcommittee voted to favorably report H.R. 1900 to the full House Energy and Commerce Committee for further review.  A copy of the bill, as passed by the subcommittee, is available here.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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