FERC Rolls Back its Recently Enacted Policy Statements on the Certification of New Natural Gas Infrastructure
The Federal Energy Regulatory Commission (FERC) announced on March 24, 2022, that it will delay enacting any changes to its existing policies on the authorization or certification of interstate natural gas pipeline infrastructure under Sections 3 and 7 of the Natural Gas Act. Two policy statements FERC issued on February 18, 2022, in Docket No. PL18-1 and Docket No. PL21-3 (collectively, the 2022 Certificate Policy Statements) have now been deemed “drafts” that are subject to further comment. Initial comments will be due on April 25, 2022, with reply comments due on May 25, 2022. One of the two policy statements, which had been deemed “interim” but given immediate legal effect on February 18 prior to being relabeled a “draft” on March 24, had an initial comment date of April 4, 2022, which has now been extended to the aforementioned dates. Sidley provided a detailed summary of the changes implemented in the 2022 Certificate Policy Statements in a prior client alert and Energy Brief. (more…)
Climate Change Takes Center Stage in FERC’s Updated Policy on the Certification of New Natural Gas Infrastructure
On February 18, 2022, the Federal Energy Regulatory Commission (“FERC”) announced for the first time that it will consider a proposed natural gas infrastructure project’s impact on climate change as part of its public interest determination under sections 3 and 7 of the Natural Gas Act (“NGA”). A proposed project’s environmental effects, including reasonably foreseeable greenhouse gas emissions that may be attributable to the project and the project’s impact on environmental justice communities, now will become part of FERC’s balancing test for whether a project is: (1) required by the public convenience and necessity (“PCN”) under NGA section 7; (2) or in the public interest under NGA section 3. FERC’s prior PCN policy prioritized economic factors to define public need. Environmental effects, while considered under the NGA, were addressed primarily under the National Environmental Policy Act (“NEPA”). (more…)
Sidley Energy Enforcement Update
This Sidley Update addresses the following:
- District court judge finds that FERC may not pursue joint and several liability and disgorgement in Coaltrain case – FERC seeks interlocutory appeal.
- FERC Report on Enforcement highlights increased enforcement activity in 2021.
- FERC approves settlement between Enforcement staff and Golden Spread.
- FERC orders penalties against GreenHat Energy, LLC and individuals.
- DOJ and CFTC charge Puerto Rico resident and his firm for misappropriation of nonpublic information and fictitious trading.
U.S. Department of the Interior Releases Report on Federal Oil and Gas Leases
On November 26, 2021, the U.S. Department of the Interior (DOI) issued a long-anticipated report on federal oil and gas leases. The report focuses on the fiscal terms, leasing process, and remediation requirements of federal oil and gas leases. Notably, however, it does not discuss the possibility of banning new leases. (more…)
Congress Rescinds Trump-Era Methane “Policy Rule”
On June 25, 2021, the U.S. House of Representatives voted to rescind a Trump-era methane rule using its Congressional Review Act (CRA) authority, which includes special procedures that allow Congress and the President to rescind certain rules promulgated during a prior administration, within defined time limits. The Senate passed the CRA resolution disapproving the rule on April 28, 2021. The measure garnered bipartisan support in both chambers. Congress presented the resolution to President Biden, who signed it on June 30, 2021.
FERC Climate Change Concerns to Delay Five Pending Natural Gas Pipeline Projects
On May 27, 2021, the Federal Energy Regulatory Commission (FERC) indicated that it would increase the timeline for making a decision on five pending applications for Natural Gas Act (NGA) Section 7 certificates of public convenience and necessity when it issued notices of intent to prepare an environmental impact statement (EIS) to each of the project sponsors. Each of the applications concern pipeline expansion projects that were the subject of environmental assessments (EAs) performed by FERC staff. The notices state that the new EISs will tier off of the existing EAs and will be limited in scope to assisting FERC in its consideration of the subject projects’ contribution to climate change in the FERC decision-making process.
FERC Dismisses Requests for Rehearing in Algonquin Gas
On May 19, 2021, the U.S. Federal Energy Regulatory Commission (FERC) issued an order dismissing rehearing requests (Dismissal Order) of its February 18, 2021, Order Establishing Briefing in Algonquin Gas Transmission, LLC (Docket No. CP16-9-012) (Briefing Order). The Briefing Order had found that concerns raised regarding the operation of a compressor station that FERC had authorized to place into service on September 24, 2020, warranted further consideration. FERC set the matter for a paper hearing, with deadlines established for initial and reply briefs. The Briefing Order drew fierce criticism in dissents by Commissioners Mark Christie and James Danly on grounds that FERC was acting outside of its statutory authority and resulted in over 100 comments and briefs filed by a diverse group of pipeline industry members and advocates, environmental nongovernmental organizations and consumer groups, and former FERC commissioners as well as requests for rehearing by the affected pipeline and four individual trade associations representing pipeline operators, investors, and shippers.
Federal Energy Regulatory Commission Clarifies Application of Rule Limiting Construction Activities
On May 4, 2021, the U.S. Federal Energy Regulatory Commission (FERC or Commission) issued Order No. 871-B, an Order Limiting Authorizations to Proceed with Construction Activities. The order revises FERC regulations at 18 C.F.R. § 157.23(b) enacted in July 2020 following the issuance of Order No. 871.
The regulation now prohibits authorizations to proceed with construction for pipeline or liquefied natural gas (LNG) terminal facilities from issuing if a timely request for rehearing of a certificate order has been filed specifically opposing project construction, operation, or need until (1) the request is no longer pending before FERC, (2) the record of the proceeding has been filed with the court of appeals, or (3) 90 days have passed after the date that the request for rehearing may be deemed to have been denied under the Natural Gas Act’s (NGA) rehearing provisions at 15 U.S.C. § 717r(a).