FERC may change natural gas pipeline policy

Wednesday, January 3, 2018

U.S. energy regulators have signaled potential changes to a decades-old policy on the certification and pricing of new interstate natural gas pipelines.

The Federal Energy Regulatory Commission is charged by the Natural Gas Act with regulating the transmission and sale of natural gas for resale in interstate commerce, and approving the siting and abandonment of interstate natural gas pipelines and storage facilities.

In 1999, the Commission issued a Statement of Policy "to provide the industry with guidance as to how the Commission will evaluate proposals for certificating new construction." The FERC's 1999 policy statement came about at a time when the Commission faced both pressure "to authorize new pipeline capacity to meet an anticipated increase in the demand for natural gas" and "to act with caution to avoid unnecessary rights-of-way and the potential for overbuilding with the consequent effects on existing pipelines and their captive customers." In adopting the 1999 policy statement, the Commission said its publication was intended "to provide more certainty as to how the Commission will analyze certificate applications to balance these concerns."

But the Commission could soon change its policies.  Last month, on December 21, 2017, Commission Chairman Kevin J. McIntyre issued a statement that the Commission will consider changes to the 1999 policy statement, "as part of a pledge he made during his Senate confirmation to take a fresh look at all aspects of the agency’s work."

According to that statement, while next steps will soon be announced and scheduled, "any review of this type would be thorough, and the Commission would invite the views of all stakeholders to ensure that FERC accurately and efficiently assesses the pipeline applications it receives."

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