Pipeline permitting predictability needed to promote energy security and economic stability

By Stanley Chapman III, Chairman, Interstate Natural Gas Association of America

After a spring and summer of troubling activity that could have far-reaching impacts on energy infrastructure, I think it’s critical that we at INGAA take a moment to address the importance of permitting predictability. This troubling activity I refer to included the cancellation of the Atlantic Coast pipeline, a federal judge vacating the use of a nationwide general use Clean Water Act permit for new oil and gas pipelines, and a federal judge ordering the Dakota Access Pipeline to shut down pending further review. However, the headlines also included more positive news: Warren Buffett bet big on natural gas to acquire Dominion’s pipeline and storage assets and a federal appeals court ruled that a Federal Energy Regulatory Commission (FERC) certificate issued to National Fuel’s Empire Pipeline project pre-empted a town from using a zoning law to stop the siting of the pipeline.

When I started in this industry more than 30 years ago, it took no more than five months to secure a FERC certificate for a pipeline expansion. Today, it takes more than a year and the issuance of the certificate no longer signals the start of construction, but often the beginning of judicial and state challenges. The pipeline permitting process, which has been successfully granting permits for decades is now being challenged on a project by project basis and these disputes are being elevated all the way to the U.S. Supreme Court.

Investments in our national infrastructure that are critically important to our economy and the ability to safely provide reliable and affordable power are needlessly being paralyzed. Efforts to relieve some of the logjam by conducting multi-year rulemaking activities intended to modernize the environmental review process for infrastructure projects have been unduly criticized when they should be celebrated. This summer, the Council on Environmental Quality (CEQ) issued a final, comprehensive update to the National Environmental Policy Act (NEPA) implementing regulations. NEPA is a critically important statute that is applicable to infrastructure permitting for all types of projects, from wind energy development, to airport improvements, to natural gas pipelines, and until this year, these regulations hadn’t been meaningfully updated in over four decades. The updated NEPA implementation regulations clarified key terms and accordingly will focus federal agencies and applicants on the appropriate scope of their NEPA reviews, making the process more efficient while still protecting the environment.  Those changes are something to cheer about.  Instead, the revised regulations are being attacked.

In an article I read recently, James Coleman, an energy law professor with Southern Methodist University, observed that permitting major energy infrastructure will likely remain challenging absent major action from either the Congress or the United States Supreme Court. “[C]ourt decisions have created new obstacles to pipelines and power lines — any kind of infrastructure development,” Coleman said. “There are really only two ways that changes. One is with new legislation passed by Congress to reform infrastructure approvals. And the second is with a bunch of Supreme Court cases."

Opposition activists have created hurdles for permitting which thwart modernization of infrastructure and threaten our energy safety and security, electric reliability, and economic stability.

The United States is fortunate to have an abundance of natural gas resources to provide reliable, low-cost domestic energy, while also allowing us to share our abundant resources abroad. And our economy is better off because of this abundant supply. For example, natural gas allows the U.S. to expand domestic manufacturing, reduce electricity costs, and ensure reliability of the overall electrical grid, among other things. Energy is the backbone of our economy and it keeps Americans fed, clothed and warm. Furthermore, low energy prices have enabled households to better cope with increased food, education and healthcare spending needs. The average American’s household energy costs have declined nearly 11% over a decade, while the cost of many other essentials has increased: consumer prices have risen 73% for health care, 58% for education, and 26% for food and groceries.

As natural gas demand continues to grow, both in the U.S. and globally, the natural gas transmission pipeline network must grow and adapt so it can continue to deliver energy to consumers, businesses and markets worldwide. This growth will only be possible with a stable and predictable regulatory, judicial and legislative environment.

Through the expansion of our nation’s natural gas pipeline network, by way of a clear and predictable permitting process, the U.S. can continue to provide an affordable, efficient and cleaner-burning fuel to consumers and businesses domestically and abroad. Without a predictable permitting process, companies building out natural gas infrastructure face unforeseen challenges and risks, while communities, businesses and other end-users deal with the uncertainty of how they will access this cleaner, more affordable and reliable fuel source.

Through collaboration between the industry, regulators, and Congress, we can achieve a clear and predictable regulatory process. The result will be a cleaner environment (both nationally and abroad) and the ability to capitalize on our abundant domestic energy resources, leading the United States to economic prosperity.