EPA, gas groups tussle over pipeline review scope

OREANDA-NEWS. February 02, 2016. An effort by the Federal Energy Regulatory Commission (FERC) to revise its environmental review guidelines has sparked an industry debate over whether the agency should weigh the affect of pipeline and LNG facility approvals on upstream natural gas output.

FERC has consistently rejected calls to review upstream environmental effects when it decides whether to approve natural gas infrastructure. The additional step could trigger tougher environmental protections or block some projects, but FERC has for years successfully argued in court it would be too difficult to accurately predict where gas production might increase.

FERC's decision last month to revise its guidance for preparing environmental reviews has created a regulatory forum for outside groups and other federal agencies to push for changes.

The US Environmental Protection Agency (EPA) on 19 January told FERC it is possible to provide a "conceptual level analysis" of the types of upstream environmental effects that are likely to occur from increased production. EPA said the agency's environmental guidance should be revised so that project developers have to provide FERC with this type of upstream analysis.

EPA also said the guidance should be brought "up to date" by requiring project developers to review greenhouse gas emissions from the construction of natural gas infrastructure, along with the combustion and transportation of natural gas. Applicants should also have to describe measures to reduce greenhouse gas emissions from their projects, EPA said.

Natural gas producers are pushing back on those recommendations. The trade group Natural Gas Supply Association, along with the Center for LNG, said expanding environmental reviews to include upstream environmental effects could delay needed energy infrastructure projects. The groups said they support FERC's existing practice not to review the environmental effects of upstream production.

"FERC has appropriately described that market conditions dictate that it is most likely that natural gas pipelines will follow natural gas production, rather than pipelines inducing production," the trade groups said.

The extent of FERC's rule review is unclear. FERC when it requested comment on the revisions last month said the manual was "not the appropriate vehicle" for seeking changes to the agency's existing regulations. FERC plans to finalize the manual by early 2016.