Originally published for customers February 17, 2023
What’s the issue?
Yesterday was the second monthly open meeting that FERC has held since Acting Chairman Phillips assumed that title.
Why does it matter?
Following the dysfunction under his predecessor, we have been looking for signs that the new chairman will restore the Commission to its proper role with respect to promptly reviewing and acting on pipeline and LNG projects.
What’s our view?
While no certificates for expansion projects were issued yesterday and none were issued between the last two meetings, we remain cautiously optimistic that the new Acting Chairman is charting a more positive path with respect to the promptness of its actions.
Yesterday was the second monthly open meeting that FERC has held since Acting Chairman Phillips assumed that title. Following the dysfunction under his predecessor, we have been looking for signs that the new chairman will restore the Commission to its proper role with respect to promptly reviewing and acting on pipeline and LNG projects.
While no certificates for expansion projects were issued yesterday and none were issued between the last two meetings, we remain cautiously optimistic that the new Acting Chairman is charting a more positive path with respect to the promptness of its actions.
Open Meeting Summary
There was not much on yesterday’s agenda with respect to the gas pipeline industry, but the good news is that, once again, the meeting actually started pretty close to when it was scheduled and was completed in about thirty minutes, which is before it typically started during the term of Acting Chairman Phillips’s predecessor. Commissioner Danly also noted that it was now officially a trend in that he was not dissenting on any of the agenda items. He and Commissioner Clements had a couple of concurrences, but both Commissioner Christie and Acting Chairman Phillips simply voted yes on the entire agenda. These votes further confirm our view that the current Commission is not a split of 2-2 between Democrats and Republicans, but more of a 1-2-1 split between the two pragmatists in the middle and idealogues on each extreme.
There were only four natural gas items on the agenda and FERC acted on all four.
Great Basin Gas Transmission Company
The 2023 Mainline Replacement Project in Humboldt, County, Nevada installs approximately 20.4 miles of 16-inch-diameter steel pipeline, as well as abandoning in place approximately 18.7 miles of existing 16-inch pipeline, and removal of 1.7 miles of existing 16-inch pipeline. This project does not create any new transportation capacity.
Action Taken: The Commission’s Order issued the Certificate and approved abandonment.
Saguaro Connector Pipeline
The Saguaro Connector Pipeline is a border crossing project that would site, construct, and operate natural gas pipeline facilities between the U.S. and Mexico near Sierra Blanca, Hudspeth County, Texas. The project is seeking to obtain a Presidential Permit, and has yet to receive a determination of environmental report type.
Action Taken: The Commission provided notice of letters it has issued to the Secretaries of State and Defense requesting a concurrence with granting a Presidential Permit.
Columbia Gas Transmission
The Columbia Gas project is a request for 7(a) and 7(b) authorizations to replace four storage wells with two new, more efficient injection/withdrawal wells at the Coco B Wells Storage Field. The project does not change the storage field’s existing storage capacity or physical parameters. This is stated to be typical safety and related maintenance set to improve the reliability and flexibility for existing customers and the broader market.
Action Taken: The Commission’s Order issued the Certificate and approved abandonment.
Mountain Valley Pipeline
Multiple requests for rehearing were filed for a previous Commission order granting an extension of time to Mountain Valley Pipeline to complete construction and place the Mountain Valley Pipeline Project and the Greene Interconnect Project into service.
Action Taken: The Commission’s Order addressed the arguments raised on the rehearing request and reaffirmed the original order’s grant of MVP’s request for extension of time.
History of Project Reviews
Arbo’s data goes back to the beginning of the Obama administration and so we can compare how FERC functioned under the last three administrations. Given how polarized our politics has become since then, it will likely surprise many that the best administration for pipeline expansion projects by far was the Obama administration.
As seen above, during the eight years of the Obama administration, the number of pipeline projects approved per month by FERC exceeded the number approved during the Trump administration, even though the Trump administration was purportedly a promoter of the industry. Since assuming his new role, Acting Chairman Phillips has only approved one project, which is not much better than the rate of his predecessor and far below the rate during the Obama administration. This is somewhat troubling because there are three expansion projects that are ripe for a FERC order: the Line 200 and Line 300 Project, the GTN XPress Project and the Virginia Electrification Project, which completed their environmental reviews on September 15, November 18 and December 12, respectively.
Looking at the data from another perspective, the time it takes to move a project from application to an order shows that the Obama administration was also the best period for pipeline expansion projects.
As seen above the expected timeline for a pipeline expansion project to go from application to order has lengthened substantially. The primary cause under the Biden administration was undoubtedly the chairman’s decision to require the preparation of an Environmental Impact Statement (EIS) for every expansion project. As we noted in Timing of Restarts for Keystone, El Paso and Freeport and Some Good News for MVP, the Acting Chairman appears to have reversed that requirement and one of the three projects we discussed there, Appalachia to Market II, received a positive environmental assessment on February 10, a full five months ahead of when FERC had planned on issuing the EIS for the project.
For now, the signs are good that the current Commission seems far more capable of functioning and may be able to approve projects in a more timely manner, but we will continue to monitor the overall progress under the new acting chairman and would expect all three projects that have already completed the environmental review process to be issued a certificate by the time we get to next month’s open meeting on March 16.