Can You Teach An Old Dog New Tricks? A(nother) Major Energy Infrastructure Bill

Legislation Projects
July 14, 2017

Much like the 114th Congress, leading members of the 115th Congress have brought forward several bills intended to alter the regulation of energy infrastructure, including their latest salvo, the Energy and Natural Resources Act of 2017. The bill has a wide variety of provisions focused principally on energy efficiency, cybersecurity, and infrastructure permitting, specifically the FERC gas pipeline permitting process. Following the election of President Donald Trump, Republicans have been motivated to pass such a bill, with Senate Majority Leader Mitch McConnell (R-KY) putting the bill on the calendar this week. In many ways, this bill is simply a reconstitution of a prior version. So, besides a new Administration, what’s new? And what impact will the bill have?

 

Senator Murkowski’s (R-AK) previous bill passed the Senate and House at the end of 2016, but ultimately became tied up in final negotiations when House Republicans refused to deliberate further following the election of President Trump. Murkowski’s 2016 bill provided that the FERC would establish deadlines for delegated cooperating agency permits, and provided that if a permit was late, the head of the relevant agency must then provide Congress and FERC with an implementation plan to ensure completion–adding yet another layer of bureaucracy by introducing the Congress into the process. This bill neither attempted to dissect the myriad of complex inter- and intra-federal and state agency issues that impact project permitting, nor asked hard questions of developers as to what they could do to improve the process. (A topic we addressed in Sittin Here on Capitol Hill – Just Another Bill?

 

Last week, Murkowski introduced her latest bill, the Energy and Natural Resources Act of 2017 (S.1460), which, after one day of consideration, will be placed on the calendar for a vote by the Senate. But is the bill more favorable to Republican interests than its predecessor? Similar to its predecessor, the bill contains a section dedicated to “FERC Process Coordination.” This section maintains FERC as the lead agency for the purposes of the NEPA review process, but appears to expand FERC’s mandate at a time when its workload is at an apogee. In this regard, FERC must notify all cooperating federal and state agencies that need to provide authorization or consultations and establish deadlines to complete review. In addition, agencies would be obligated to review applications concurrently, and all agencies involved would be obligated to spot potential issues or problem areas early and notify other cooperating agencies.

Duration from Application Approval to Notice to Proceed with Construction

 

Straying little from its predecessor, Murkowski’s recent bill aims to shame agencies into complying with the 90-day federal authorization deadline, rather than offering FERC or another agency an explicit enforcement mechanism. For example, if a cooperating agency does not meet the deadline, the head of the agency will have to submit a plan to Congress for attaining the necessary authorization. The same procedure holds true if the agency fails to meet the schedule set for them by the FERC. Importantly, the bill does not remove the authority of the states to deny a permit, which has been a recent problem blocking a number of projects in New York State.  

 

Practically speaking, as currently written, the bill provides that FERC would likely be responsible for herding dozens of federal and state agencies with sign off authority, a role it is likely loath to maintain, while leaving the FERC with no additional enforcement powers. While testifying before Congress, FERC’s Director of the Office of Energy Projects warned against just this sort of solution. Despite his remarks, these provisions have gained bipartisan support not once but twice, seeming to indicate that Congress has turned a deaf ear to FERC’s input. And while Murkowski’s bill contains provisions that permit a cooperating agency to ask for an extension of the time allowed for its review, it also may create a platform for agencies, such as the New York Department of Environmental Conservation, which has made a point of opposing pipeline development, to address Congress.

 

Before jumping into crafting legislation, legislators, FERC, other agencies, and those who seek to influence the discourse should take some time to better understand the problem. That is, where are the delays and what are the drivers? Delays in permitting arise from a myriad of issues when planned pipeline routes are altered or company-suggested mitigation efforts are deemed incomplete. These circumstances cause agencies to revisit matters originally settled or presumed to be a non-issue, resulting in delays to final decisions. With more informed planning and a data-driven debate, natural gas pipeline companies may be able to bring about meaningful change.

Distribution of Duration from Application Approval to Notice to Proceed with Construction