Congressional Research Service Report: 'Interstate Natural Gas Pipeline Siting – FERC Policy & Issues for Congress' (Part 2 of 2)

WASHINGTON, May 29 -- The Congressional Research Service issued the following report (No. R45239) on May 27, 2021, entitled "Interstate Natural Gas Pipeline Siting: FERC Policy and Issues for Congress ":

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(Continued from Part 1 of 2)

Executive Order 13212

President George W. Bush issued E.O. 13212 on May 18, 2001. Focusing specifically on "energy-related projects," the order directs federal agencies to "expedite their review of permits or take other actions as necessary to accelerate the completion of such projects, while maintaining safety, public health, and environmental protections."/84

In the context of natural gas pipelines, the principal outcome of this order was the 2002 interagency agreement on early coordination of pipeline certificate review, which remains in force. In 2005, FERC also signed a memorandum of understanding with the Corps expanding upon this agreement "to further streamline respective regulatory processes" consistent with the executive order./85

Executive Order 13604

President Obama issued E.O. 13604 on March 22, 2012, "to significantly reduce the aggregate time required to make decisions in the permitting and review of infrastructure projects by the Federal Government, while improving environmental and community outcomes."/86

Among other requirements, the order called for federal agencies to select "infrastructure projects of national or regional significance" to track on the online Federal Infrastructure Projects Dashboard (Sec.2(c)).

In the context of this executive order, the Administration cited as a best practice for "pre-application/application improvements" FERC's certificate pre-filing process, which was already in place at the time./87

A May 17, 2013, Presidential Memorandum expanded upon the order, directing the Steering Committee on Federal Infrastructure Permitting and Review Process Improvement established by E.O. 13604 "to modernize Federal infrastructure review and permitting regulations, policies, and procedures to significantly reduce the aggregate time required by the Federal Government to make decisions in the review and permitting of infrastructure projects," including pipelines./88

However, it is not clear to what extent, if any, the executive order and memorandum may have led to changes to aspects of FERC certification for pipelines. None of the three pipelines from this period presumably identified as being "of national or regional significance" (because they are listed on the federal permitting dashboard) were natural gas pipelines./89

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84 Executive Order 13212, "Actions to Expedite Energy-Related Projects," May 18, 2001.

85 Department of the Army, "Memorandum of Understanding between the Army Corps of Engineers and the Federal Energy Regulatory Commission for Interstate Natural Gas Pipeline Projects," July 11, 2005, https://www.ferc.gov/ legal/mou/mou-30.pdf.

86 Executive Order 13604, "Improving Performance of Federal Permitting and Review of Infrastructure Projects," March 22, 2012. In a memorandum released the same day, the President called on federal agencies to "coordinate and expedite their reviews, consultations, and other processes as necessary to expedite decisions related to domestic pipeline infrastructure projects," but this directive was limited to a "domestic pipeline system for the transportation of crude oil." See The White House, "Presidential Memorandum--Expediting Review of Pipeline Projects from Cushing, Oklahoma, to Port Arthur, Texas, and Other Domestic Pipeline Infrastructure Projects," March 22, 2012.

87 The White House, Implementing Executive Order 13604 on Improving Performance of Federal Permitting and Review of Infrastructure Projects, June 2012, p. 26.

88 The White House, "Modernizing Federal Infrastructure Review and Permitting Regulations, Policies, and Procedures," Presidential memorandum, May 17, 2013.

89 Federal Permitting Improvement Steering Council, "Permitting Dashboard," online database, May 21, 2018, https://www.permits.performance.gov/projects. The three listed projects were oil pipelines and are currently categorized as "legacy" projects.

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Executive Order 13766

Issued by President Trump on January 24, 2017, the order was intended "to streamline and expedite, in a manner consistent with law, environmental reviews and approvals for all infrastructure projects, especially projects that are a high priority for the Nation, such as ...pipelines."/90

Among other provisions, the order permitted governors, federal department and agency heads, or the FERC chairman to request "high priority" status for a project with respect to "expedited procedures and deadlines for completion of environmental reviews and approvals" (Sec.3). CRS has identified no interstate natural gas pipelines which were classified as high priority under this order.

Executive Order 13777

Issued by President Trump on February 24, 2017, the order was intended "to lower regulatory burdens on the American people by implementing and enforcing regulatory reform."/91

The order required agencies to evaluate existing regulations and identify regulations for repeal, replacement, or modification. Targeted regulations included those that, among other considerations, eliminated jobs (or inhibited job creation); were outdated, unnecessary, or ineffective; or imposed costs that exceeded benefits. In response to the order, FERC "established a regulatory reform task force to perform a thorough review of the Commission's regulations, policies, and processes, and to identify opportunities to reduce regulatory burdens."/92

The commission also issued its April 19, 2018, NOI regarding its pipeline certification policies.

Executive Order 13783

Issued by President Trump on March 28, 2017, the order generally aimed to establish a policy to promote domestic energy development and use, and ensure affordable and reliable electricity. To accomplish these broad goals, the order directed executive agencies to review their existing regulations and "appropriately suspend, revise, or rescind those that unduly burden" domestic energy production or use, "with particular attention to oil, natural gas, coal, and nuclear energy resources." The order also rescinded guidance intended to help federal agencies determine how and when to assess climate change effects and costs in rulemakings and environmental reviews.

As directed by the order, the CEQ withdrew its 2016 guidance, Consideration of Greenhouse Gas Emissions and the Effects of Climate Change in National Environmental Policy Act Reviews. On June 26, 2019, CEQ published draft NEPA guidance on consideration of greenhouse gas emissions intended to replace the 2016 guidance./93

Being an independent agency, FERC was not subject to the executive order. Nonetheless, on November 1, 2017, the commission voluntarily submitted a report reviewing FERC actions pursuant to the order, which, among other things, encompassed the commission's regulations, guidance documents, and policies related to pipeline certification and environmental review under NEPA./94

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90 Executive Order 13766, "Expediting Environmental Reviews and Approvals for High Priority Infrastructure Projects," January 24, 2017.

91 Executive Order 13777, "Enforcing the Regulatory Reform Agenda," February 24, 2017.

92 FERC, "Federal Energy Regulatory Commission One Federal Decision Implementation Plan," July 9, 2018, p. 3.

93 Council on Environmental Quality, "Draft National Environmental Policy Act Guidance on Consideration of Greenhouse Gas Emissions," 84 Federal Register 30097-30099, June 26, 2019.

94 FERC, "Final Report: Review of Federal Energy Regulatory Commission Agency Actions Pursuant to Executive Order 13783, Promoting Energy Independence and Economic Growth," 82 Federal Register 50517-50523, November 1, 2017.

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The report concluded that "the majority of agency actions relating to the siting and construction of interstate natural gas transportation ... do not materially burden the transportation or delivery of domestically produced natural gas," and that there was "no need for the Commission to consider any revision to this regulation."/95

Executive Order 13807

Issued by President Trump on August 15, 2017, the order was intended "to ensure that the Federal environmental review and permitting process for infrastructure projects is coordinated, predictable, and transparent." The explicit goal of the order was to complete federal environmental reviews and permitting decisions for major projects within two years of application (Sec.2(h))./96

A key component of E.O. 13807 was a "One Federal Decision" framework, whereby each "major" infrastructure project had one lead federal agency responsible for the overall permit process and issuing one Record of Decision, incorporating individual decisions from cooperating or participating agencies (Sec.5(b)).

On April 9, 2018, the FERC chairman signed a memorandum of understanding (MOU) with other federal agencies to implement E.O. 13807./97

Under the MOU, the agencies agree to "undertake to meet the goal set forth in E.O. 13807 of reducing the time to two years for each agency to complete all environmental reviews and authorization decisions for major infrastructure projects" through implementation of One Federal Decision, communication, concurrent reviews, adherence to a review timetable, and commitment to agency-specific and collective review process enhancements (Sec.V). FERC already was the lead agency for pipeline certificate environmental review and had statutory authority to set a review timetable under EPAct, so it appears the impact of the MOU may have been primarily from cooperating agency coordination and setting the two-year goal. However, it is an open question how it has affected FERC's ongoing review of pipeline certificate applications. Nonetheless, FERC stated at the time that it was "committed to carrying out the goals of Executive Order 13807 to improve the efficiency, timing, and overall predictability of the certification process."/98

Executive Order 13868

Issued by President Trump on April 10, 2019, the order stated that "outdated federal guidance and regulations regarding Section 401" of the Clean Water Act are "causing confusion and uncertainty and are hindering the development of energy infrastructure."/99

Among other things, the order directed the Environmental Protection Agency (EPA) to review and issue new guidance to supersede the existing Section 401 guidance and to revise the agency's existing Section 401 implementing regulations. The order instructed EPA to focus on the need to promote timely federal-state cooperation, the appropriate scope of water quality reviews, the types of conditions that may be appropriate to include in a certification, expectations for review times for different types of certification requests, and the nature and scope of information states may need to act on a certification request. EPA subsequently issued revised Section 401 guidance and, in July 2020, a final water quality certification rule which replaced the prior implementing regulations./100

Although not directed at FERC, the EPA's guidance and rulemaking was intended, in part, to facilitate the state permitting of interstate natural gas pipelines also under FERC's NGA jurisdiction.

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95 Ibid. p. 50521.

96 Executive Order 1387, "Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure Projects," August 15, 2017.

97 The White House, "Memorandum of Understanding Implementing One Federal Decision Under Executive Order 13807," April 9, 2018, https://www.whitehouse.gov/wp-content/uploads/2018/04/MOU-One-Federal-Decision-m-1813-Part-2.pdf.

98 Federal Energy Regulatory Commission (FERC), Certification of New Interstate Natural Gas Facilities, Notice of Inquiry, Docket No. PL18-1-000, April 19, 2018, p. 22.

99 Executive Order 13868, "Promoting Energy Infrastructure and Economic Growth," April 10, 2019.

100 Environmental Protection Agency. "Clean Water Act Section 401 Certification Rule," 85 Federal Register 4221042287, July 13, 2020

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Executive Orders 13990, 13992, and 14008

Issued by President Biden on January 20, 2021, E.O. 13990 asserts a policy to, among other things, "hold polluters accountable, including those who disproportionately harm communities of color and low-income communities; to reduce greenhouse gas emissions; to bolster resilience to the impacts of climate change; ... and to prioritize ... environmental justice."/101 The order directs all executive departments and agencies to review and address the promulgation of regulations and other actions during the last four years that conflict with these objectives, "and to immediately commence work to confront the climate crisis."/102 This order also revokes Executive Orders 13766, 13783, 13807, and 13868.

On January 25, 2021, President Biden also issued E.O. 13992, which "revokes harmful policies and directives that threaten to frustrate the Federal Government's ability to confront ... problems" including the COVID-19 pandemic, economic recovery, racial justice, and climate change./103 The order revokes Executive Order 13777.

On January 27, 2021, President Biden issued E.O. 14008, which asserts an Administration policy "to organize and deploy the full capacity of its agencies to combat the climate crisis to implement a Government-wide approach that reduces climate pollution in every sector of the economy" and "delivers environmental justice," among other objectives./104 Although FERC, being an independent agency, is not directly subject to these executive orders, the commission stated in March 2021 that "there have been a series of recent administrative changes," specifically E.O. 13990 and E.O. 14008, "and we continue to evaluate their impact on our review process."/105

Legislative Proposals

Over the last 20 years, Congress has acted frequently to oversee FERC's certification of interstate natural gas pipelines through hearings and correspondence with the commission./106 Members of Congress also have proposed legislation to change FERC's review of gas pipeline certificate applications, either specifically or as one category among a broader range of infrastructure projects. Proposals also have sought to change FERC's regulations with respect to certificates it has issued to pipeline developers.

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101 Executive Order 13990, "Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis," January 20, 2021.

102 Ibid.

103 Executive Order 13992, "Revocation of Certain Executive Orders Concerning Federal Regulation," January 25, 2021.

104 Executive Order 14008, "Tackling the Climate Crisis at Home and Abroad," January 27, 2021.

105 FERC, East Lateral XPress Project, Environmental Assessment, Docket No. CP20-527-000, March 2021, p. 72.

106 See, for example, U.S Representative Stephen F. Lynch, and U.S. Senators Elizabeth Warren and Edward Markey, letter to the Honorable Richard Glick, Chairman, FERC, February 19, 2021, https://lynch.house.gov/index.cfm?a= Files.Serve&File_id=CDF3115A-C4E0-4B4C-9C4F-EC87566542ED.

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Proposals in Prior Congresses

In the 111th-116th Congresses, bills which were not enacted sought to increase FERC public hearings, limit eminent domain authority, expand the scope of FERC's environmental review, require regional review of multiple projects, and impose specific deadlines on FERC and cooperating agencies, among other measures. Title 41 of the Fixing America's Surface Transportation Act (P.L. 114-94; FAST-41), which became law on December 4, 2015, revised the process for federal approval of a range of major infrastructure projects by establishing best practices, requiring coordination of federal agency review of projects, and shortening the period for challenges to final decisions for issuing project permits. Infrastructure projects covered by the act are those requiring environmental review under NEPA and requiring investment exceeding $200 million (Sec.41001)./107 As of April 2021, the permitting dashboard listed four natural gas pipeline projects (two completed) covered under FAST-41 with FERC as the lead agency./108 A summary table of the relevant legislative proposals in the 111th -116th Congresses is provided in the Appendix.

Legislative Proposals in the 117th Congress

Some Members of Congress have introduced legislative proposals in the 117th Congress involving FERC's certification authority or review process. Table 1 summarizes the key provisions in these bills related to natural gas pipeline certification. As the table shows, the proposals variously would require FERC to collectively review multiple pipelines proposed in the same region, hold more public meetings, restrict the use of eminent domain, and more broadly consider greenhouse gas emissions. Some would require environmental monitoring of completed pipelines and mandate greater cooperation and transparency of permit review by federal agencies.

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107 The Office of Management and Budget (OMB) and Council on Environmental Quality (CEQ) jointly issued guidance for agencies to comply with FAST-41. See OMB and CEQ, "Guidance to Federal Agencies Regarding the Environmental Review and Authorization Process for Infrastructure Projects," memorandum, January 13, 2017.

108 Federal Permitting Improvement Steering Council, "Federal Infrastructure Permitting Dashboard," online database, April 30, 2021, accessible at https://www.permits.performance.gov/projects.

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[See link at end of text for Table 1. Current Legislative Proposals Involving FERC Certification of Pipelines (117th Congress)]

Sources: http://www.congress.gov, CRS analysis.

Notes: FERC= Federal Energy Regulatory Commission, NEPA = National Environmental Policy Act, NGA = Natural Gas Act.

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FERC's Policy Review

As discussed earlier, FERC's review of pipeline certificate applications is guided by its Policy Statement on Certification of New Interstate Natural Gas Pipeline Facilities issued in 1999. On December 21, 2017, the FERC chairman announced that the commission would undertake a review of its permitting policies and procedures for interstate natural gas pipelines. Accordingly, on April 19, 2018, the commission issued a Notice of Inquiry "to examine its policies in light of changes in the natural gas industry and increased stakeholder interest in how it reviews natural gas pipeline proposals."/109 More specifically, the commission's notice posed "a range of questions that reflected concerns raised in numerous public comments, court proceedings and other forums," and sought input on "potential changes to both the existing Policy Statement and the structure and scope of the Commission's environmental analysis" as well as "feedback on the transparency, timing, and predictability of its certification process."/110

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109 FERC, "Commission Initiates Notice of Inquiry into Pipeline Certificate Policy Statement," press release, R-18-16, April 19, 2018.

110 Ibid.

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According to its notice, FERC's inquiry focused on four general aspects of its certificate application review, with specific questions posed under each aspect

* relying on precedent agreements to demonstrate project need,

* eminent domain and landowner interests,

* evaluating project alternatives and environmental effects, and

* the efficiency and effectiveness of FERC's certificate processes./111

FERC's inquiry was opened for public comments through July 25, 2018./112 However, according to the NOI, the commission intended to make no decisions on possible further action related to its inquiry until it had reviewed the comments filed; the commission did not state any timetable for completing this review./113 (FERC issued its 1999 policy statement over 13 months after publishing a Notice of Inquiry for that proceeding./114) Through 2020, the commission took no further action related to the NOI.

Reopening the Policy Review

On January 21, 2021 President Biden appointed a new FERC chairman (elevating a commissioner who joined FERC in 2017)./115 The appointment followed the November 30, 2020, Senate confirmation of two new commissioners, restoring FERC to its full statutory complement of five commissioners./116 On February 18, 2021, under its new chairman, FERC announced that it had "reopened" its review of the 1999 policy statement and published a new NOI "asking for new information and additional perspectives that would assist the Commission in moving forward with its review ... looking to build upon the record already established."/117 In the announcement, the FERC chairman stated "it's important to recognize that many changes have occurred since our initial inquiry three years ago." At an industry event, the FERC chairman subsequently stated "we have ... reinvigorated a proceeding that was begun many years ago," noting that "our whole process has come under some criticism--I've been critical of some aspects of it."/118

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111 FERC 2018 NOI, pp. 45-46.

112 FERC, "Certification of New Interstate Natural Gas Facilities," 83 Federal Register 24780, May 30, 2018. The comment period was extended 30 days from an original closing date of June 25, 2018.

113 FERC 2018 NOI, p. 4.

114 FERC, "Regulation of Interstate Natural Gas Transportation Services," Notice of Inquiry, 63 Federal Register 42974, 84 FERC

61,087, July 29, 1998.

115 FERC, "President Biden Names Glick Chairman of FERC," press release, January 21, 2021.

116 FERC, "Senate Votes to Confirm Christie, Clements to Commission," press release, November 30, 2020.

117 FERC, "FERC Revisits Review of Policy Statement on Interstate Natural Gas Pipeline Proposals," press release, February 18, 2021.

118 Richard Glick, FERC Chairman, remarks at the Women's Council on Energy and the Environment, Virtual Executive Series, April 29, 2021, video available at https://youtu.be/NT0jnNl6tpw.

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The 2021 NOI reaffirms the commission's interest in the four general aspects of its certificate application review covered in its 2018 NOI, some with modification. It also poses new questions on an additional issue area examining FERC's "identification and addressing of any disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on environmental justice communities and the mitigation of those adverse impacts and burdens."/119

The NOI solicits new information and stakeholder perspectives related to the following five aspects of review, again, with specific questions posed under each aspect:

* potential adjustments to determination of need,

* eminent domain and landowner interests,

* consideration of environmental impacts,

* efficiency of the commission's review process, and

* consideration of effects on environmental justice communities./120

The initial deadline for comments in the NOI was April 26, 2021, but it was subsequently extended to May 26, 2021./121 The commission has established no deadline for taking further actions with respect to the ROI, although the chairman has stated "I suspect we'll be able to act ..., hopefully soon on this gas pipeline certificate proceeding."/122 Any FERC pipeline certification activities or decisions in the meantime would be made in accordance with the 1999 policy statement. Moreover, the FERC Chairman has stated that "the Commission will not wait to act on Certificate applications while we consider options for improving the process."/123 Because FERC's policy statement is only a guidance document, not a regulation or statute, the commission has considerable discretion regarding if, when, and how it will apply any policy changes to pending certificate applications./124

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119 FERC 2021 NOI, p. 4.

120 FERC 2021 NOI.

121 FERC, "Notice Extending Time for Comments," Docket No. PL18-1-000, March 31, 2021.

122 Richard Glick, April 29, 2021.

123 Richard Glick, May 21, 2021.

124 U.S. Court of Appeals for the District of Columbia, Consolidated Edison Company of New York, Inc., et al., v. Federal Energy Regulatory Commission, No. 01-1345, January 17, 2003, https://www.cadc.uscourts.gov/internet/ opinions.nsf/4B1331E528B23FC485256F82005F46BE/$file/01-1345a.txt.

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Policy Issues for Congress

Congress has been interested in the development of natural gas pipelines for decades, with a particular focus on siting and environmental impacts in recent years. Some in Congress generally see such pipeline development as positive, primarily due to its perceived economic benefits in terms of construction employment, lower natural gas prices, and environmental benefits relative to burning more carbon-intensive fossil fuels (i.e., coal). Others generally view gas pipeline development more critically, primarily due to environmental concerns from greenhouse gas emissions. Still others are focused primarily on the local effects of gas pipeline development related to public safety, the impacts on lands, the acquisition of private property through eminent domain, and impacts on environmental justice communities. Pipeline proponents would rather see more and faster pipeline development, whereas opponents would rather see less--preferring instead a greater policy emphasis on energy alternatives, such as renewable electricity generation, they view as more environmentally or socially benign.

Because FERC has the statutory authority to approve or deny certificates for interstate natural gas pipelines, the policy views above have led to persistent congressional scrutiny of FERC's pipeline certification process and decisions. Concerns about gas pipelines have motivated repeated attempts at congressional intervention. In total, over 40 bills have been introduced since the 111th Congress (seven in the current Congress alone) which would affect various aspects of FERC's review of pipeline certificate applications. Of these, only the FAST Act (which seems to have applied to only a few of FERC's gas pipeline reviews) and the Consolidated Appropriations Act, 2021 became law. Therefore, absent any other statutory changes, Congress must rely on FERC to address policy concerns on its own volition in response to congressional oversight, federal court decisions, and public input.

FERC's recent Notice of Inquiry covers a number of the key congressional concerns raised either in oversight hearings or bill provisions in the 117th Congress. Examples include eminent domain authority (H.R. 2115), environmental justice (H.R. 516), and determining market need (S. 1314). Therefore, while FERC's policy review does not guarantee any changes to the gas pipeline certification status quo, it may provide valuable information and context for congressional oversight. If Congress disagrees with FERC's future policy choices based on the findings of its NOI, those findings presumably would provide an informed basis and clear policy context for subsequent legislative proposals.

Although recent executive and agency actions, including FERC's agreements with other agencies and its NOI, may lead to changes in FERC policies or process, they are limited to those aspects of gas pipeline regulation which fall directly within the commission's statutory authority under the Natural Gas Act or within its discretion under other federal statutes. This is a significant limitation because much of FERC's pipeline certificate review is environmental review in compliance with NEPA. While the bills identified in this report, and FERC's policy review, could change how FERC interprets or fulfills its obligations under NEPA, they would not amend NEPA itself. Likewise, they would not amend other federal statutes, such as the Clean Water Act or the Clean Air Act, which also may have a bearing on gas pipeline siting approval.

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View figures, table and report at https://crsreports.congress.gov/product/pdf/R/R45239

[Category: CRSCRS]