Originally published for customers September 8, 2023
A number of projects currently under construction are significantly behind schedule due to FERC’s prior approach to GHG analysis. If Chairman Phillips has returned these processes to the Obama-era Commission’s approach, speed and certainty should increase going forward.
What’s the issue?
There are a host of projects currently under construction that are behind schedule. Comparing target in-service dates to more recent planned in-service dates shows that most of these projects will be getting gas to market much later than developers anticipated.
Why does it matter?
Pipelines target in-service dates based on market need. The longer a project is delayed, the longer this market goes unserved. Delays also increase project costs, which can cut into project rates of return and put projects at risk of cancellation.
What’s our view?
The data shows that current project delays largely result from FERC’s approach to GHG analysis under the Glick Commission. Chairman Phillips has returned FERC processes to the approach under the Obama administration, which generally means more regulatory certainty, faster project approvals, and potentially more project developers willing to undertake FERC-regulated projects going forward. However, a full return to historical norms may have to wait until Commissioner Danly departs. The next few Commission meetings will be telling.
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