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From The White House
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- FERC Commissioners Nominated & Face Senate Committee Hearing: For the first time in 40 years, the Federal Energy Regulatory Commission (FERC) has lacked a quorum with only two of the five Commissioner seats filled since former Chairman Norman Bay resigned in February 2017. We discussed the impact of this regulatory void at the 5th annual US Gas Power conference in Charlotte, NC, including delays in a reported $50 billion+ worth of energy projects. In early May, President Trump nominated Neil Chatterjee, current energy policy advisor to US Senate Majority Leader Mitch McConnell, and Robert F. Powelson, Chair of the Pennsylvania Public Utility Commission, to fill two of three empty FERC Commissioner seats. On May 25, the Senate Committee on Energy & Natural Resources held a nomination hearing to consider Chatterjee and Powelson, as well as Dan Brouillette, nominee for Deputy Secretary of the Department of Energy. The hearing was not very confrontational, although Senators did take the opportunity to raise concerns regarding the administration’s recent proposed 2018 budget cuts and protesters were present. Senator Lisa Murkowski voiced her support for the three nominees and the expectation that they would be before the full Senate for consideration soon.
- Guidance Issued re: Executive Order Promoting Energy Independence: Since March 2017, executive branch agencies have been under Executive Order (EO) directive to review all agency regulations and actions that potentially burden production or use of U.S. energy resources (in particular oil, natural gas, coal and nuclear) and to report recommendations for easing or eliminating the burdens identified by suspending, revising or rescinding the agency actions. On May 8, the White House issued a memorandum providing guidance on the requirements of the EO, clarifying the types of agency action that may rise to the level of burden on domestic energy production that the EO targets, the minimum components that should be included in the agency plans for review of agency actions, and the information to be addressed by agency reports, a draft of which must be filed by July 26, 2017 and finalized by September 24, 2017. For additional details regarding the EO directive see here.
Natural Gas
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- Proposed Natural Gas Pipeline Safety Rule Up for Public Discussion: Last year, the U.S. Department of Transportation, Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a notice of proposed rulemaking regarding safety of onshore gas transmission and gathering lines that proposes modifications to the safety and reporting requirements related to pipeline integrity management requirements and other areas. On June 6-7, 2017, the Technical Pipeline Safety Standards Committee (a.k.a., the Gas Pipeline Advisory Committee) will hold a public meeting to further discussion on the proposed rule. Details regarding the meeting and a summary of the provisions of the proposed rule can be found here.
- Interim Underground Natural Gas Storage Rule Clarified Via FAQs: In December 2016, PHMSA issued an interim final rule (effective January 18, 2017) modifying the safety regulations governing underground natural gas storage (UGS) facilities. PHMSA recently published FAQs in an effort to clarify the requirements of the interim rule, which incorporates American Petroleum Institute (API) Recommended Practices for solution-mined salt caverns, depleted hydrocarbon reservoirs, and aquifer reservoirs. The FAQs (currently 21 total) address several issues, including the procedures operators of UGS facilities constructed on or before July 18, 2017 must have in place as July 18, 2017 approaches and by January 18, 2018. PHMSA noted that the FAQs are subject to change once the final UGS rule has been issued.
Electricity
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- Clean Power Plan to be Rescinded, Replaced, or Struck Down by Court: Challenges to the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan (CPP) have been pending since the CPP was finalized in 2015. The U.S. Supreme Court stayed implementation of the plan in early 2016 due to pending litigation challenging the rule. And the U.S. District Court for the District of Columbia recently ordered the case to be held in abeyance following a request by the EPA pending the agency’s review of the CPP prompted by the Executive Order Promoting Energy Independence issued by President Trump in March 2017. The DC Circuit requested briefing by May 15, 2017 on whether the court should hold the case in abeyance or remand to the EPA. Petitioner States challenging the rule requested the court continue to hold the case in abeyance because the EPA ultimately may not rescind or revise the rule, necessitating the court’s resolution. EPA also asked the court to continue to hold the case in abeyance pending the agency’s review of the CPP to preserve the status quo and to prevent complications from post-remand litigation. It was reported last week that the EPA has begun the process of rescinding the rule and that the agency head, Scott Pruitt, has expressed that it is an open question as to whether the CPP would be replaced with other regulation limiting green-house gas emissions from power plants if it is rescinded.
- FERC Grid Reliability Technical Conference June 22, 2017: On June 22, 2017, the Federal Energy Regulatory Commission (FERC) will hold a technical conference to discuss policy issues related to the reliability of the Bulk-Power System. The conference will address grid security and the possibility of long-term, large-scale disruptions to the grid, as well as international perspectives on grid reliability with representatives from Canada, Mexico, and the EU. The agenda also indicates a discussion of the North American Electric Reliability Corporation (NERC) 2017 State of Reliability report.
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- House Discusses Coordination of Natural Gas Pipeline Permitting & Approval of Cross-Border Infrastructure: On May 3, 2017, the House Energy and Commerce Committee’s Subcommittee on Energy held a hearing, “Legislation Addressing Pipeline and Hydropower Infrastructure Modernization” to consider ten energy infrastructure-related bills, including discussion drafts of H.R. ____, Promoting Interagency Coordination for Review of Natural Gas Pipelines Act and H.R. ____, Promoting Cross-Border Energy Infrastructure Act. Increasing and unnecessary delays in the approval of natural gas pipeline infrastructure prompted the proposed pipeline coordination legislation, which would reiterate that FERC is the lead agency for siting interstate natural gas pipelines, while directing FERC to facilitate coordination between all agencies responsible for considering a portion of an application. Via invitation from FERC, the agencies involved may cooperate/participate in the process and comply with an established schedule for concurrent reviews and final decision deadlines. The Interstate Natural Gas Association of America (INGAA) expressed the need for greater coordination and certainty regarding the schedule for reviewing and issuing decisions on permit applications. The proposed cross-border infrastructure bill is an answer to many of the perceived shortcomings of the Presidential Permit process at the center of the Keystone XL pipeline approval process. Congress has not issued required procedures for permitting cross-border energy infrastructure. The proposed legislation would replace the Presidential Permit process, established through Executive Order, with a Congressionally mandated process to authorize cross-border facilities into Mexico and Canada for the import/export of oil and natural gas and electricity transmission.
