The U.S. Federal Energy Regulatory Commission Tightens Gas Pipeline and LNG Regulations

The U.S. Federal Energy Regulatory Commission (FERC) adopted stricter regulations and licensing requirements for natural gas pipelines and liquefied natural gas (LNG) transport in February, only to rescind them in late March under bipartisan pressure from the U.S. Senate.

The guidelines were enacted narrowly along party lines, with the three Democrat commissioners supporting the changes while the two Republicans dissented.

Before they were withdrawn, the policies specified the required environmental analyses necessary for FERC approval of pipelines and new LNG facilities would have to address “environmental justice” issues and any effects the pipeline might have on climate change.

Strong GOP Dissent

The Republican commissioners said the Democrat majority was asserting the commission had the power to rewrite both the 1938 Natural Gas Act and the 1970 National Environmental Policy Act.

The proposed rules represented “the mother of all legal weapons” to be wielded against the fossil fuel industry, said Commissioner Mark Christie in a statement.

“First is the narrative that the courts are ‘telling us to do this,’” said Christie’s statement. “This claim rests almost entirely on one case from the D.C. Circuit, Sabal Trail, but since Sabal Trail there have been more recent opinions from the U.S. Supreme Court itself reasserting its major questions doctrine.

“The major questions doctrine holds that under the Constitution, major issues of public policy are reserved to Congress, so unless Congress has made an explicit grant of authority by law directing an agency to address a major policy issue, the agency cannot simply assume it has the power,” said Christie. “And whether this Commission can reject a certificate to build a natural gas facility, one that otherwise meets the criteria for approval under the Natural Gas Act, because of its alleged impact on global climate change, is clearly a major question of public policy, … not just energy policy, but economic policy, and yes, even national security policy.”

Cherry-Picking Rulings

Chairman Richard Glick chose a single ruling that supported his political point of view, instead of examining the various rulings on the scope of FERC’s power, said Christie in his statement.

“And while we are bound to follow judicial precedent, we don’t get to ‘cherry pick’ one precedent, while ignoring the conflicting precedents, especially those more recent rulings from the Supreme Court itself setting out a doctrine that this certificate policy adopted today clearly violates,” said Christie. “Preventing the construction of any new natural gas project is the overt public-policy goal of many interest groups who are conducting a national campaign of legal warfare— ‘lawfare,’ for short—against every single natural gas project.

Politics Over Law

The regulatory changes FERC’s Democrat majority initially voted to impose on pipeline and LNG approval process are wholly political, not based on legitimate concerns about public need, health, or safety, says Dan Kish, senior vice president for policy at the American Energy Alliance.

“FERC is turning into an advocacy group pushing a political agenda instead of ensuring Americans have access to reliable and affordable energy,” said Kish before the announced withdrawal of the rules. “These regulations have nothing to do with the environment, and simply open more avenues for enemies of affordable energy to attack projects through ‘lawfare’ and appeals which amount to economic terrorism against U.S. projects.

“All they will do is drive up costs, make lawyers richer, and hamper energy security in the United States,” said Kish.

‘Sand in the Gears’

These rules are one small part of the Biden administration’s “whole of government” approach to blocking fossil fuel production and use, says Bette Grande, president of the Roughrider Policy Center.

“These regulations are consistent with actions from other arms of the Biden administration aimed at throwing sand in the gears of our fossil fuel industry,” said Grande. “The regulators always sugarcoat their positions, but the impacts show the true intent, with more red tape simply adding more costs and delays, further reducing supplies.

“The Biden administration is trying to pass the buck on rising energy prices, but this action by FERC, and similar actions by other agencies, constrain domestic energy production and supply,” said Grande. “They can run, but they can’t hide from the devastating impacts of their Net-Zero 2050 policies.”

‘Skyrocketing Energy Prices’

Europe provides a cautionary tale about America’s energy future under Biden’s climate crusade, says Kish.

“Europe is waking up to skyrocketing energy prices pushed by Greens and the lack of energy security green policies are producing,” said Kish. “The United States, currently insulated by our recently achieved energy independence, is now being headed by those who haven’t gotten the memo that energy weakness is national security and economic weakness, which breeds foreign aggression.

“President Biden continues to call climate change the ‘existential threat’ which guides his energy, economic, and even national security policies,” said Kish. “The orders have gone out to his lieutenants to do everything in their power to irreversibly change the energy outlook in the United States, and they are faithfully carrying out his orders.”

‘Just Do Your Damn Job’

During a mid-March hearing before the Senate Energy and Commerce Committee, during which Glick was called to testify, committee chair Sen. Joe Manchin (D-WV) joined others in criticizing FERC’s pipeline delays.

Federal agencies including FERC are “throwing so many more obstacles, … [going] way outside of his wheelhouse,” Manchin said about Glick to the press after the hearing. “Just do your damn job; that’s all I told him.”

In the week after the Senate grilling, FERC announced it was placing the climate policies on hold, downgrading them to draft status, which would not be applied to pipelines already involved in the permitting process.

Kevin Stone (kevin.s.stone@gmail.com) writes from Arlington, Texas.