FERC Policies Leave Uncertainty on Viability of Natural Gas Infrastructure Development

Due to geopolitical concerns, U.S. natural gas exports have increased, putting a spotlight on the Biden-Harris administration’s and their efforts to change the way that the Federal Energy Regulatory Commission (“FERC”) processes permits to develop new natural gas infrastructure.

According to Reuters, in response, in February, FERC released a new certificate policy statement, which governs the process for approving new natural gas infrastructure projects. It also released an “interim” policy statement on how it will consider GHG emissions and climate change impacts from new natural gas infrastructure. FERC stated that it would apply the policy statements to both pending and new certificate applications.

Unsurprisingly, not all of the recommended changes to FERC’s permitting process and GHG policies were well received, especially since the rules were made effective immediately without a comment period or transition schedule. In fact, after receiving considerable backlash from Capitol Hill, FERC abruptly changed its issuances to “draft” policy statements rather than “updated” and “interim” policy statements just over one month after their issuance. In addition to opening a comment period to solicit feedback and input from the industry, FERC reversed course by noting that any policy change would apply prospectively to new proposed projects and not affect any pending projects.

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