U.S. to Review Gas Pipeline Policy for First Time Since 1999

(Bloomberg) -- U.S. energy regulators embarked upon a wide-ranging review of how interstate natural-gas pipelines are approved, amid concerns that current guidelines have become outdated following the shale boom.

The Federal Energy Regulatory Commission will examine the use of eminent domain, how the need for a pipeline is assessed and the extent to which greenhouse gas emissions should be taken into account in pipeline approvals.

"Given the changes in landscape since it was first put into place, reviewing our certificate policy statement for any possible improvement is good regulatory practice," Republican Commissioner Neil Chatterjee said at a commission meeting Thursday.

The commission was among more than a dozen federal agencies that signed a memorandum of understanding earlier this month aimed at slashing the time needed for environmental reviews and permitting on major infrastructure projects. The timing of the agency’s own review is “quite coincidental but perhaps fortuitous,” Kevin McIntyre, its chairman, said at a monthly meeting on Thursday.

The review also comes as divisions have emerged among the five-member commission in recent months over pipeline projects. Democratic Commissioner Cheryl LaFleur in October expressed concerns about the process in a statement dissenting to the commission’s approvals of the Mountain Valley Pipeline and Atlantic Coast Pipeline projects. She has criticized the agency for basing assessments of economic need solely on contracts between developers and customers signed before applications are submitted.

LaFLeur said on Thursday she wants the agency to take a “hard look” at whether and how the agency could consider the social cost of carbon when it makes decisions.

Another Democratic Commissioner, Richard Glick, issued a dissent over the PennEast pipeline in January. He questioned the need for the pipeline, since many of the capacity contracts were signed with the developer’s own affiliates.

The federal pipeline approval process was already under scrutiny after a U.S. appeals court ruled last year that the commission had failed to consider climate change impacts in its approval of the Sabal Trail natural gas pipeline, a joint venture of Spectra Energy Partners, NextEra Energy Inc. and Duke Energy Corp. The commission has since issued new environmental reviews for the project, effectively avoiding a shutdown of the line.

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