House Passes Two Bills Giving More Pipeline Permitting Authority to the Federal Energy Regulatory Commission

On July 19, 2017, the U.S. House of Representatives passed a pair of bills aimed at reforming natural gas and oil pipeline permitting, and granting additional authority to the Federal Energy Regulatory Commission (“FERC”).  Both bills passed on largely party-line votes.  The two bills are H.R. 2883, Promoting Cross-Border Energy Infrastructure Act, and H.R. 2910, Promoting Interagency Coordination for Review of Natural Gas Pipelines Act.  H.R. 2883, removes the current requirement that gas and oil pipelines, as well as electric transmission projects, obtain a Presidential Permit to cross an international border.  Instead, pipelines would obtain a certificate of crossing from FERC and transmission projects would obtain such a certificate from the Department of Energy.  If enacted into law, this change would mark a significant change for oil pipeline projects.  FERC currently has no authority over any aspect of interstate oil pipeline siting.  Currently, all siting decisions not on federal lands are handled at the state level, with international border crossings overseen by the State Department through the presidential permit process.  FERC does, however, oversee the siting of interstate natural gas pipelines, including Presidential Permits for international border crossings, under current law.

The second bill, H.R. 2910 would strengthen FERC’s existing role as the lead permitting agency for interstate natural gas pipeline projects under the Natural Gas Act (“NGA”).  Prior to certificating a pipeline or LNG project under sections 3 or 7 of the NGA, FERC must conduct an environmental review under the National Environmental Policy Act (“NEPA”), and coordinates this NEPA review with other agencies, deemed participating agencies, that may have concurrent jurisdiction over aspects of the project. The bill adds requirements that other federal agencies conduct their NEPA reviews concurrently with FERC.  The participating agencies are required to give deference to FERC, to the maximum extent authorized by law, to the scope of project-related NEPA review that FERC deems appropriate.  One notable element of the bill is how it limits the comments concerning project-related NEPA review that FERC may consider.  FERC is prohibited from considering comments from agencies that are not deemed participating agencies, and may not include their comments in the record.  Under the prior Administration, the U.S. Environmental Protection Agency (“EPA”) was a frequent commentor on NEPA review in FERC proceedings, and project opponents often cited EPA’s position on pending projects in FERC and federal court documents.  Given that EPA is rarely if ever a participating agency, the new legislation would effectively mute its influence over a pending project.  What is less certain is the legislation’s impact on state agency participation.  Currently, many pipeline projects are held up by state environmental reviews conducted under independent federal statutes, such as the Clean Air Act and Clean Water Act.  The legislation creates mechanisms to improve communications between the states and FERC, but no obligation for the states to act within a given timeframe.

Senate action on either bill is unknown at this time.