Skip to main content

Legal Update

US Federal Energy Regulatory Commission Issues Notice of Inquiry Regarding New Natural Gas Transportation Facilities

20 April 2018
Mayer Brown Legal Update

Yesterday, the US Federal Energy Regulatory Commission (FERC) issued a Notice of Inquiry (NOI) seeking stakeholder comments on whether, and if so how, it should adjust its current policy1 on certifying new natural gas transportation facilities. Specifically, it requests input on:

“(1) its methodology for determining whether there is a need for a proposed project, including the Commission’s consideration of precedent agreements and contracts for service as evidence of such need; 

(2) its consideration of the potential exercise of eminent domain and of landowner interests related to a proposed project; and 

(3) its evaluation of the environmental impact of a proposed project.”

FERC says that the NOI is appropriate in light of significant market developments, including “(1) a revolution in natural gas production technology leading to dramatic increases in production; (2) new areas of major natural gas production; (3) flows on pipeline systems becoming bidirectional or reversing; (4) customers routinely entering into long-term precedent agreements for firm service during the formative stage of potential projects and the use of those precedent agreements as applicants’ principal evidence of the need for their projects; (5) the increased use of natural gas as a fuel source for electric generation, resulting in a closer relationship between natural gas transportation and natural gas-fired electric generation; (6) increased concerns expressed by landowners and communities potentially affected2 by proposed projects; (7) an increased interest regarding the Commission’s evaluation of the impact that greenhouse gas (GHG) emissions associated with a proposed project have on global climate change; (8) an increased focus on environmental concerns within the National Gas Act public interest determination; and (9) a desire to generally expand or limit the Commission’s evaluation under the National Environmental Policy Act of 1969 (NEPA).” 

Comments are due within 60 days of the publication of the NOI in the Federal Register.

1FERC’s current policy, per the standard established in section 7 of the Natural Gas Act, is contained in Certification of New Interstate Natural Gas Pipeline Facilities, 88 FERC ¶ 61,227 (1999), clarified, 90 FERC ¶ 61,128, further clarified, 92 FERC ¶ 61,094 (2000) (Current FERC Policy Statement).

2The total miles of interstate natural gas pipeline authorized by FERC on an annual basis has fluctuated over time but in recent years reached a high of 2,739 miles in 2017. See generally Federal Energy Regulatory Commission, 2017 State of the Markets Report, at 4 (Apr. 2018),  www.ferc.gov/market-oversight/market-oversight.asp  (providing the number of approved pipelines projects and miles for 2017).

The Build a Report feature requires the use of cookies to function properly. Cookies are small text files that are placed on your computer by websites that you visit. They are widely used in order to make websites work, or work more efficiently. If you do not accept cookies, this function will not work. For more information please see our Privacy Policy

You have no pages selected. Please select pages to email then resubmit.