The U.S. DOT and 10 other federal agencies signed a Memorandum of Understanding (MOU) on April 9, 2018, which became effective on April 10, 2018.  The MOU[1] is intended to implement Executive Order 13807 (Aug. 15, 2017), which established a “One Federal Decision” policy for infrastructure projects that require authorizations by multiple federal agencies. Under the MOU, a lead federal agency must be designated to be responsible for addressing compliance with the National Environmental Policy Act (NEPA), and the preparation of a single Environmental Impact Statement (EIS). The lead agency will establish a single Permitting Timetable that all federal agencies must follow. The MOU mandates that all federal authorizations must be resolved within 90 days of issuance of the lead agency’s Record of Decision (ROD) on the EIS, with limited exceptions.

There have been problems on large pipeline construction projects in recent years getting all federal agencies to agree on an approach to permitting review and timetables.  The MOU addresses that by requiring all agencies to work on a single approach and timeline, and to develop the policies necessary to do so.  It also requires all environmental review to be complete no later than two years from issuance of a Notice of Intent (NOI) to prepare an EIS for a new project.  Additionally, the MOU specifies three “concurrence points” at which all involved agencies are requested to reach consensus on NEPA project review and approval: (1) Purpose and Need; (2) identification of Alternatives; and (3) selection of the Preferred Alternative.

For new natural gas pipeline construction projects, FERC will continue to be the lead agency preparing an EIS, but any cooperating agencies must now comply with a uniform schedule for review and input.  Although not required by the MOU, state, local and tribal agencies will be invited to voluntarily participate in the single permitting timetable process.

The MOU was welcomed by many as a means to achieve permit streamlining, a concept that Congress has attempted to address over the years, as noted in our prior posts regarding both House and Senate efforts [see prior pipelaws posts, August 4, 2017, July 5, 2017]. It also harkens to President Trump’s January 2017 Presidential Memorandum addressing permit streamlining for domestic manufacturing.  As a representative of the U.S. Chamber of Commerce said of this new MOU, “It shouldn’t take longer to approve a project than to build it.”  Opponents of new infrastructure projects, including pipelines, note that the courts are still deliberating on whether and to what extent large projects need to consider climate change impacts under NEPA.  Challenges such as that are not addressed directly by the MOU, but in theory the MOU will foster a consolidated position by all federal agencies involved.

While the MOU stands to improve the coordination and timing among federal agencies, it is only aspirational, speaking in terms of “goals” and “milestones” that are ultimately non-binding. It may also place more burdens on project applicants, to ensure that all agencies are, in fact, coordinating and adhering to the timetable, etc., and that any disputes are identified and resolved in a timely manner.

In addition, challenges to permits and approvals at the local and state level will be unaffected by this MOU. New infrastructure projects continue to face opposition by environmental or citizen groups, and increasingly states too have posed challenges to large scale projects. For example, as noted in our prior post of July 5, 2017, projects such as Millennium Pipeline Company that received prior FERC approval have found themselves in the U.S. Courts of Appeals addressing state challenges. The Second Circuit recently issued a favorable decision in the Mellennium appeal , however, holding firm to the plain language in the Clean Water Act that the timeline for a state’s action in response to a request for a water quality certification is one year from receipt of the request.

[1] The MOU was signed by the heads of the Department of Transportation; the Federal Energy Regulatory Commission; the Environmental Protection Agency; Department of Energy; U.S. Army Corps of Engineers; Department of the Interior; Department of Agriculture; Department of Commerce; Department of Housing and Urban Development; the Advisory Council on Historic Preservation and the Federal Permitting Improvement Steering Council.


The Gas Pipeline Advisory Committee (GPAC) convened in Washington D.C. at the end of March, 2018, to continue discussions from May and December 2017 regarding PHMSA’s proposed gas and gathering pipeline mega rule (“Safety of Gas Transmission and Gathering Pipelines” [PHMSA-1011-0023]. The meetings included discussion and voting on a number of provisions concerning maximum allowable operating pressure (MAOP), integrity management, definitions and repair criteria.  Most notably, PHMSA announced its intention to divide the original Notice of Proposed Rulemaking (NPRM) into three parts and issue three separate final rulemakings in 2019 [PHMAS PowerPoint]. PHMSA is currently projecting that these three rulemakings will be issued over the course of next year, with the first one focusing on outstanding congressional mandates, as follows::

Part I (expected issuance in March 2019) to address the expansion of risk assessment and MAOP requirements, including:

  • 6-month grace period for 7-calendar year reassessment intervals;
  • Consideration of seismicity for integrity management assessments (fort both threats and preventative and maintenance measures)
  • MAOP exceedance reporting
  • Material verification, MAOP reconfirmation (for those with unknown MAOPs or incomplete records)
  • Expansion of the risk assessment obligation to include areas in non-high consequence areas (HCAs) and moderate consequence areas (MCAs)
  • Related records provisions

Part II (expected issuance in June 2019) to focus on the expansion of integrity management program regulations, including:

  • Adjustments to repair criteria for pipelines in HCAs and non-HCAs
  • Inspections following extreme weather and other events
  • Safety features on in-line inspection launchers and receivers
  • Management of change
  • Corrosion control
  • Other integrity management clarifications and increased assessment requirements

Part III (expected issuance in August 2019) to focus on expanding the regulation of gas gathering lines, including:

  • Reporting requirements
  • Safety regulations for gas gathering lines in Class I locations
  • Definitions

The next GPAC meeting is scheduled for June 12-14, 2018, and it is expected to focus on the NPRM provisions concerning gas gathering pipelines.  As noted in our prior post , the advisory committee meetings are particularly informative to industry and other interested parties concerning the direction PHMSA will take with these final rules.

 

 

On January 22, 2018, the Supreme Court in a unanimous decision threw the long contested issue of what constitutes “waters of the U.S.” back to the lower courts.  Somewhat surprisingly, the Supreme Court held that federal district courts have jurisdiction to hear challenges to the rule, reversing a Sixth Circuit decision and suspending that court’s nationwide stay of the rule.  In doing so, the Court guaranteed that a revised definition of “waters of the U.S.” will remain undecided for some time to come. Continue Reading Definition of “Waters of the U.S.” Remains Uncertain

On August 3, 2017, the Senate confirmed both Neil Chatterjee (R) and Robert Powelson (R) as FERC Commissioners, returning FERC to a quorum after six months.  FERC has been unable to issue major decisions without a quorum, although staff work has continued to work on a variety of fronts, including issuing environmental reviews for various pipeline construction and other energy projects.  The Senate confirmations should be a relief for the energy industry, which has been subject to prolonged uncertainty as major project approvals have been at a standstill since February.

The quorum will be restored as soon as Chatterjee and Powelson are sworn in, which historically has taken from one to three weeks.  The confirmation of the nominations of Chatterjee, a former aide to Senate Majority Leader McConnell and Powelson, a Pennsylvania regulator, brings the Commission to 3 members of what is typically a 5 member Commission.  Trump previously announced nominations of Kevin McIntyre (R), an energy lawyer in private practice, and Richard Glick (D), a Senate aide, for the two remaining vacancies weeks ago, but only nominated them formally this week.  The Senate Energy and Natural Resources Committee has scheduled a hearing on those nominations for September 7, 2017.

Continue Reading Senate Confirmations to Restore FERC Quorum; Committee to Review Permit Streamlining Bill