Permitting is top 2015 priority on Capitol Hill for interstate gas pipeline group

 

 

 

 

Martin Edwards: We are still in the process of working with our members on what that will be, but I can give you some general stuff. Legislation on the timely permitting of gas transmission lines is important. When I say that, I don't just mean the FERC certificate process. I mean the permitting by various federal and state agencies that have to issue permits in order for a pipeline to construct. Those various and numerous permits involved can be significant factors in delaying a project. Having orderly and timely approval of those permits is important to a project remaining on some semblance of a schedule. That is an important set of issues there.

 

Another area that you touched on is reauthorization of the federal Pipeline Safety Act. That is just perennially an important issue for the pipeline industry. Whenever that statute is being reauthorized, it becomes a priority.

 

The third thing I would mention is a little harder to define because we don't know what, if anything, is going to happen in this area. We are watching to see if anything happens on the legislative side regarding the regulation of methane emissions from natural gas systems. That could be just a regulatory issue. We just don't know. It's important. There could be various legislative proposals on that issue. We'll just have to wait and see.

 

 

We are. The cross-border issue is separate legislation that would largely not have an impact on natural gas pipelines. That legislation would have far more significant ramifications for oil pipelines and electric transmission lines. In fact, the stated goal of the sponsors for that particular legislation is to, in essence, make the process for cross-border oil pipelines similar to that for cross-border gas pipelines.

 

What I'm talking about are proposals like H.R. 1900 [introduced by Rep. Mike Pompeo, R-Kan.] in the current Congress that have, essentially, time limits once FERC has issued its [National Environmental Policy Act] document, in terms of how much time other permitting agencies have in order to file decisions on their relevant permits. That legislation actually passed the House twice in the last year and a half, and I now understand that the House Republicans plan on making that legislation one of the first three bills brought up in the House at the beginning of January, so it will get some attention.

 

 

I'll mention one issue that is obscure, and the one issue we think is important to get resolved in the next Congress. There was a hearing on this issue in the House about six months ago, but otherwise it doesn't attract much attention. That issue deals with the approval of rights of way on lands that are administered by the National Park Service.

 

Bear with me. This is an arcane and somewhat lengthy description of the issue: The statutes that govern the National Park Service are old. The provisions of the U.S. federal code that deal with the approval of rights of way across lands administered by the Park Service were actually enacted by an act of Congress in 1901 and 1911. In those provisions, they list the types of infrastructure that the secretary of the interior can approve on lands that are administered by the Park Service and other federal lands. And they include things like electric power lines, communication facilities, water lines, some mining facilities, et cetera. But gas pipelines didn't exist — at least the interstate ones didn't exist — in 1901 and 1911, so they are not enumerated in the statute.

 

So while for many years the Park Service just assumed it had the authority to approve these types of rights of way — and they did for many years — beginning about 25 or 30 years ago, the Park Service decided that since gas pipelines weren't specifically mentioned in the statute, they don't have the authority to negotiate with a project proponent and approve a right of way if they reach agreement. The Park Service's position is that if you want to build a pipeline in land administered by the National Park Service, you must first seek a specific act of Congress allowing the Park Service to negotiate with you on that specific project. In essence what that means is that the Congress becomes a permitting agency for that pipeline. The bill must be passed out of Congress and that bill must be signed by the president before you can even start your discussions with the Park Service on what those terms are going to be, even if they want to approve it. So that can take years and add years to the process.

 

On the other hand, if I'm an electric utility and I want to cross one of these lands, I just go to the relevant Park Service official and make whatever kind of deal we can make. I don't need an act of Congress. So this is an anomaly in the law. It has never been corrected in more than 100 years. I mean, one of these provisions was literally enacted on legislation signed by Teddy Roosevelt.

 

What we want to seek in this next Congress is an amendment to the statute that essentially allows the Park Service — or the Department of the Interior, more likely — to be able to negotiate, approve or deny these types of gas pipeline rights of way without a pipeline company first having to seek a bill in Congress allowing them to do so. In other words, treat gas pipelines the same way electric lines, water lines, communication lines, et cetera, are already treated.

 

When you think of the Park Service, you think of Yellowstone National Park, but the problem is that the Park Service administers an awful lot of land that you never think of as administered by the National Park Service. It is somewhat surprising the breadth of land administered by the National Park Service.

 

I'll give you a couple of examples. When I drove from the office [in Washington, D.C.] to my house a little while ago, I drove on the George Washington Memorial Parkway and Spout Run [Parkway] in Arlington, Virginia. Those two roads are administered by the National Park Service. If I want to put a gas pipeline under either one of them, I must seek a bill in Congress to do so.

 

Another good example, and one that's very relevant to a number of pipeline projects, is the Appalachian Trail. The Appalachian Trail is 2,000 miles long. Georgia to Maine. Administered by the National Park Service. Think about all of the pipeline projects being proposed that go underneath the Appalachian Trail. Think about that a minute. These companies are highly motivated to fix this problem. Right now, the Park Service is telling them, "We're not going to talk to you until you get a bill passed in Congress."

 

 

It's the Great Wall of China. You can't build around it. So that is a significant obstacle that you have to cross. That is presenting some problems.

 

There are occasionally individual bills that are passed in Congress. There was one two, two and a half years ago for [the Rockaway lateral project] in New York City for a three-mile-long pipeline that [Williams Partners LP's Transcontinental Gas Pipe Line Co. LLC] just finished building. … The pipeline went under what used to be known as Floyd Bennett Field, which was New York City's first airport. Floyd Bennett Field is now a national recreation area, so it's administered by the National Park Service. Williams had to seek a bill in Congress. It took them two years to get it done. It took them another 18 to 20 months to finish their negotiations with the Park Service after that. They only started construction on the project this summer. And it's three miles long.

 

There was another bill passed a few years ago for a proposed gas pipeline in Alaska that would cross part of the Denali National Park. There have been several other bills in the past. But they are not easy to pass. I mean, this is Congress … and these are the type of permitting decisions normally just left to the relevant agencies.

 

It's an obscure story, but it's important. It would be a good idea to get this resolved in the future so that you do not have to get individual bills in Congress for these projects.

 

 

The opportunity is just getting things moving in the Senate, getting back to a semblance of order in the legislative process. The House passes bills. The Senate passes bills. You have either formal or informal conference discussions. We just haven't had that in the last couple years. Getting back to the normal give and take between the two chambers is an opportunity.

 

I think the incoming Senate leadership feels compelled to demonstrate that they are getting things done. They were pretty critical — the Republicans, I mean — of the current Congress and the Senate … so I think it's incumbent on those same Republicans, now that they are in control, to be moving things, to be trying to get things done. So that's the opportunity.

 

The challenge is getting compromise on a bill that the president will sign.

 

 

Edwards: I think the primary goal is to create an environment for getting more infrastructure built that keeps pace with the demand for gas. In some cases, that's getting bills passed — for example, to improve the permitting process. In other cases, it's preventing bills from being passed that would be disruptive to getting the capital and getting the projects done. I think most experts would tell you that we need to build a lot of gas infrastructure in the U.S. right now to catch up with the enormous supply development that has taken place over the last 10 years. So keeping ourselves on pace and building out that infrastructure — that is the primary goal.

 

Catherine Landry: The only other thing we would add is that we were pleased that the Senate moved forward on Colette Honorable and confirmed her nomination. We think it is important that as nominations come up, for FERC particularly … that they do act on those nominations.

 

Edwards: I'm not at liberty to discuss a whole lot of that, but I didn't think that was going to happen. That was a surprising development in a good way. That was something I was personally working pretty hard on and getting discouraged very quickly. That was a good end-of-the-year surprise.

 

There will be another FERC nomination up next year. [Commissioner Philip Moeller's term expires June 30, 2015.] Whether the current commissioner decides to stay and be renominated or whether he wants to step down and have somebody new come in, there will be another nomination next year.

 

 

Nothing specific right now. I don't know what his plans are, but I would imagine there are already names on a list. You can count on it.

 

 

It won't be boring. That's good.

 

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