US House passes natural gas pipeline permitting reform bill

The US House of Representatives approved a bill aimed at reforming federal natural gas pipeline permit reviews by establishing stricter deadlines for other agencies to submit information to the US Federal Energy Regulatory Commission.

Fourteen Democrats joined 239 Republicans in voting for HR 161 on Jan. 21 as 169 Democrats voted against it. It now moves to the Senate, but faces a likely veto if it reaches President Barack Obama’s desk because it would deem a project approved if deadlines were not met.

“We may have fixed our supply problems but we now have a serious distribution problem,” House Energy and Commerce Committee Fred Upton (R-Mich.) said following the vote. “Our archaic energy infrastructure and outdated regulatory system is blocking American consumers from reaping the benefits of our energy abundance. We have the gas, but don’t have the pipelines to get cheap energy directly to families and businesses that need it most.”

Ed Whitfield (R-Ky.), who chairs the committee’s Energy and Power Subcommittee, said that the Interstate Natural Gas Association of America estimated that by the year 2035, $8 billion/year will be spent on new gas pipeline construction.

“Some of these agencies are delaying for no apparent reason,” he said in floor remarks prior to the vote. “When the application is filed at FERC, the other agencies receive copies too and have time to work on it. FERC is trying to act as quarterback in this process, and these other agencies need to step up to the plate.”

Committee member Mike Pompeo (R-Kan.), who introduced the bill, said, “We have heard testimony about the escalating prices of electricity in regions of the country where there is a shortage of pipeline capacity. This administration’s climate-driven agenda is only exacerbating the problem as more coal plants are forced to shut down. This bill is designed to provide the infrastructure to get the natural gas to where it needs to be.”

Possible problems seen

But Frank Pallone Jr. (D-NJ), the committee’s Ranking Minority Member, said the administration dislikes HR 161 because its automatic approval provision could force the other agencies to make decisions before completing their reviews.

“This could lead to more denials because the agencies haven’t had enough time, or approvals without sufficient reviews,” he warned during floor remarks before the vote. “I think the Republicans are trying to come up with a solution for a problem that doesn’t exist. In doing so, they are jeopardizing applications for new pipelines.”

INGAA Pres. Donald F. Santa applauded the House’s action and expressed hope that the Senate would take up the measure soon. “The Pompeo bill is consistent with the principal recommendation of an INGAA Foundation report on permitting released in December of 2012,” he said.

“The report found that, while FERC does an effective job of reviewing applications to build new pipelines, it lacks the authority to enforce permitting deadlines for other federal and state agencies,” Santa said. “This deficiency increasingly is causing pipeline project delays. Providing clear permitting deadline authority will add certainty to the process and encourage timely decision-making.”

Contact Nick Snow at nicks@pennwell.com.

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