March 28, 2022

FERC Backtracks on Pipeline Approval Policy Changes

Holland & Knight Energy and Natural Resources Blog
Brendan H. Connors | Dianne R. Phillips
wind turbine and solar panel

The Federal Energy Regulatory Commission (FERC) issued a brief order on March 24, 2022, backtracking on the historic – and divisive – changes it had announced several weeks ago to its natural gas pipeline certification policies.

In its earlier changes, issued on Feb. 17 along partisan lines, FERC released two final policy statements concerning its evaluation of natural gas projects, both of which were apparently motivated by a concern over climate change. First, the Commission updated a previous policy statement describing how it will determine whether a new interstate natural gas transportation project is required by "public convenience and necessity" under Section 7 of the Natural Gas Act (NGA). Second, FERC issued an interim policy statement explaining how it will assess the impacts of natural gas infrastructure projects on climate change in its reviews under the National Environmental Policy Act (NEPA) and NGA. In both of these statements, FERC signaled that it would more rigorously examine the effects of such gas projects on climate change before deciding whether to approve them.

In its latest order, FERC downgraded both statements to "draft" status and stated that it will not apply them to pending project applications or, indeed, any applications filed before the Commission finalizes guidance on these matters. This action followed a considerable political outcry, in which fossil fuel industry groups and congressional Republicans had complained that FERC was injecting critical uncertainty into the pipeline approval process.

Interested parties have until April 25 to file comments on the draft policy statements, with any reply comments due by May 25. It will then likely be several months at least until FERC takes final action on these matters.

Related Insights