A bill intended to streamline the siting of natural gas pipelines and increase transparency is advancing through the U.S. House. As approved by voice vote, H.R. 2910 , would facilitate concurrent federal and state agency reviews to help streamline the siting review process under the Natural Gas Act (NGA) which is led by the Federal Energy Regulatory Commission (FERC). This bill comes at a time when the permitting process for natural gas pipelines has become protracted, cumbersome, and subject to third party challenges and delays at the federal, state and local levels.
President Trump announced that he will nominate Richard Glick to serve as a commissioner at the Federal Energy Regulatory Commission (FERC). Glick currently serves as the General Counsel for the Senate Committee on Energy and Natural Resources and is a Democrat. Glick also previously worked as a lobbyist in the energy industry.
On December 19, 2016, PHMSA issued an interim final rule (IFR) to establish for the first time minimum federal safety standards for underground natural gas storage facilities. The rule was issued in response to the 2015 Aliso Canyon storage leak that lasted almost four months, and a subsequent Congressional mandate to issue federal standards for underground storage. Among other things, the IFR incorporated by reference (thereby making them mandatory) two American Petroleum Institute (API) Recommended Practices (RPs) regarding underground natural gas storage in salt caverns and reservoirs: (1) API RP 1170, “Design and Operation of Solution-mined Salt Caverns Used for Natural Gas Storage,” (July 2015); and (2) API RP 1171, “Functional Integrity of Natural Gas Storage in Depleted Hydrocarbon Reservoirs and Aquifer Reservoirs,” (Sept. 2015). API finalized both of those RPs in response to the Aliso Canyon incident.
As part of his regulatory reform agenda, President Donald Trump instructed federal agencies to review their regulations to identify requirements that burden businesses and industry. See EO 13771 and EO 13777. In order to comply with these directives, on June 8, 2017, the U.S. Department of Transportation (DOT) requested public comments to identify statutes, rules, regulations, and interpretations in policy statements or guidance “that unjustifiably delay or prevent completion of surface, maritime, and aviation transportation infrastructure projects.”
The Gas Pipeline Advisory Committee (GPAC) will meet [Notice of advisory committee meeting] in Washington, D.C. early next month to convene the second public meeting regarding PHMSA’s proposed gas rules, often referred to as the gas mega rule. The meetings will be focused on key proposed revisions to 49 C.F.R. Part 192 natural gas rules, including expanded integrity assessment requirements, revised integrity assessment and repair criteria, records, material documentation, corrosion control, and the integrity verification process (IVP) for segments that are currently grandfathered under the rules. The meetings are scheduled for Tuesday and Wednesday, June 6-7, 2017, from 8:30 a.m. to 5:00 p.m.
In an effort to resolve the lack of a quorum at the Federal Energy Regulatory Commission (FERC), yesterday President Trump nominated Neil Chatterjee and Robert Powelson to fill Commissioner vacancies. Mr. Chatterjee is the senior energy advisor to Senate Majority Leader Mitch McConnell and previously worked with the National Rural Electric Cooperative Association. Mr. Powelson is a current member of the Pennsylvania Public Utilities Commission and president of National Rural Electric Cooperative Association. If the nominees are confirmed, FERC will regain a quorum, which it has not had since early February. Reports have also signaled that Trump is expected to nominate Kevin McIntyre, an energy lawyer in private practice, to serve as the Commission Chairman.
For the past three months, the Federal Energy Regulatory Commission (FERC or the Commission) has been without a quorum needed to make any decisions approving pipeline permits or rates. FERC is designed to have 5 Commissioners, but it must have at least 3 to constitute a quorum and make decisions. FERC Chairman Norman Bay resigned on February 3, 2017, leaving the Agency with only 2 Commissioners; less than a decision making quorum. To make matters worse, Commissioner Colleen Honorable announced this week that she intends to resign in the coming months.
The Pipeline Safety Management System (SMS) industry standard API RP 1173 was published in July 2015 and developed by API with input from NTSB, PHMSA, states, and industry representatives, following the 2010 oil pipeline accident in Marshall, Michigan. The standard’s purpose is to help pipeline operators create a framework for developing a comprehensive, process-oriented approach to safety, emphasizing continual assessment and improvement. As the industry and other stakeholders reflect on the almost 2 years since publication of the standard, there are several important takeaways.
President Trump has issued 30 Executive Orders and 28 Executive Memoranda since taking office on January 20, 2017, despite his failure to pass any major laws. That is more Executive Orders than any President has issued in the first 100 days since World War II. Nearly one fourth of these executive actions have affected the pipeline industry, either directly or indirectly, as noted below:
Since the Trump Administration took office, oil and gas industry stakeholders have questioned whether pending PHMSA rulemakings will move forward, whether the rate of PHMSA enforcement will continue, and whether agency priorities will change. The API conference held in San Antonio last week provided a rare opportunity in recent months for the industry to hear from key PHMSA personnel and industry practitioners on the status of agency priorities, rulemakings, enforcement and leadership vacancies. As explained below, while the Agency currently lacks key leadership positions and is analyzing executive directives on rulemaking, it intends to move forward with proposed rules and continue enforcement.