Earlier this month, the United States House of Representatives Committee on Science, Space, and Technology published a staff report entitled “Russian Attempts to Influence U.S. Domestic Energy Markets by Exploiting Social Media.” The report is the result of the Committee’s investigation into Russian efforts to influence U.S. energy markets. Continue Reading House Committee Report Highlights Russian Use of Social Media to Disrupt Pipeline Projects
The Federal Energy Regulatory Commission (FERC or the Commission) announced last month that it will review its policies governing the certification process for natural gas pipelines. The announcement was made by FERC Chairman Kevin J. McIntyre on December 21, 2017, in fulfillment of a pledge that he made during his Senate confirmation hearing in September 2017. The format and scope of the review are still being determined. Continue Reading FERC to Review Natural Gas Pipeline Certification Policies in the New Year
The Department of Commence published a request for comments related to implementation of the January 24, 2017 Executive Memorandum regarding “Construction of American Pipelines.” The short Memorandum directs the Secretary of Commerce to “develop a plan under which all new pipelines, as well as retrofitted, repaired, or expanded pipelines, inside the borders of the United States, including portions of pipelines, use materials and equipment produced in the United States, to the maximum extent possible and to the extent permitted by law.” The Commerce Department is directed to submit its Plan to the President within 180 days, or by July 23, 2017. The Memorandum also notes that “produced in the United States” excludes manufacture of any components or any assembly done abroad, but provides no further clarification on applicability.
In his first days as President, Donald Trump has issued several directives to expedite pipeline and energy infrastructure projects and bring pipe steel manufacturing jobs back to the U.S. Through an executive order, the President directed federal agencies to expedite environmental reviews and approvals for all infrastructure projects, with emphasis on “high priority” projects such as pipelines. In addition, the President issued two executive memoranda to renew and expedite the approval of two oil pipeline construction projects, the Keystone XL Pipeline and the Dakota Access Pipeline (DAPL). In another executive memo, Trump directed the Commerce Department to prepare a plan under which all new and repaired pipe used in the U.S. would be manufactured stateside. In issuing these presidential directives, the new administration has furthered prior commitments to support pipeline infrastructure and domestic jobs, but whether these directives can truly expedite the necessary remaining approvals for Keystone XL and DAPL remains uncertain in light of limited consequence of these executive directives (beyond the executive branch) and the inevitable legal challenges.
PHMSA has issued an interim final rule (IFR) to establish – for the first time ever – minimum federal standards for underground natural gas storage facilities. The IFR imposes significant new requirements in a short timeframe for “downhole facilities,” including wells, wellbore tubing and casings at underground natural gas storage facilities. The IFR addresses construction, maintenance, risk management and integrity management procedures for these facilities and incorporates the requirements of recent API industry Recommended Practices (RPs) 1170 for salt caverns storing natural gas and 1171 for storage in depleted hydrocarbon reservoirs and aquifer reservoirs. In addition, the IFR requires underground gas storage operators to prepare and file annual reports, incident reports, safety-related condition repairs and register their facilities in the PHMSA operator registry.
A group referring to itself as “Climate Direct Action” claimed to have shut down five major cross-border oil pipelines in various states on Tuesday October 11, 2016: Minnesota (Enbridge Lines 4 and 67 near Leonard), Montana (Spectra Energy’s Express Pipeline near Coal Banks Landing), North Dakota (TransCanada’s Keystone Pipeline near Walhalla) and Washington State (Kinder Morgan’s Trans Mountain Pipeline near Anacortes). Enbridge confirmed that activists with bolt cutters broke into a valve station in Minnesota prompting them to shut down two pipelines as a precautionary measure. In total, four of the pipelines were temporarily closed and the fifth (Kinder Morgan’s Trans Mountain pipeline) was not in service when activists attempted to turn it off.
The recent shut-down of Colonial Pipeline Company’s Line 1 in Alabama should remind the public and the government just how critical oil and gas pipelines are to America’s energy supply needs. As in most of the country, energy and food supplies are generally replaced on a short time frame, with three days being a typical limit on storage. Any disruption in service thus creates a shortage in essential services, in very short order. Gas prices in six Eastern states jumped quickly after the Colonial incident, due to increased costs and limits on product volume shipped by truck. Colonial is working diligently with PHMSA to investigate, repair and remediate the incident site, and, even as that work is ongoing, Colonial is constructing a temporary bypass line to restore service as quickly as possible. But Colonial’s Line 1 supplies upwards of 40% of all refined gasoline needs along the East Coast, and until pipeline service is restored, the effects will be noticed by a large percentage of the U.S. population.
The Third Circuit held in a highly anticipated recent decision that state actions on water quality-related permits for interstate natural gas pipeline projects are reviewable only in the federal Circuit Courts of Appeals, in accordance with the Natural Gas Act (NGA). The case, Delaware Riverkeeper v. Secretary, Pennsylvania Department of Environmental Protection et al., concerned petitions for review filed by environmental and conservation groups in New Jersey and Pennsylvania to challenge state permitting decisions for the Transcontinental Pipeline (Transco) Leidy project. Specifically, the groups challenged the decisions of the Pennsylvania and New Jersey Departments of Environmental Protection (PDEP and NJDEP, respectively) to issue water quality certifications under Section 401 of the Clean Water Act (CWA) and, in the case of the NJDEP, other water quality-related permits required under State law.
Recent developments in cases brought by Constitution Pipeline Company to challenge New York’s denial of certain water quality authorizations highlight tensions between federal and state oversight of interstate natural gas pipeline construction projects, and the accompanying potential for costly and protracted delays. Under the scheme of “cooperative federalism” set up by many environmental statutes—such as the Clean Water Act (CWA), the Clean Air Act, and the Endangered Species Act—even where a natural gas project is under the exclusive federal regulatory jurisdiction of the Federal Energy Regulatory Commission (FERC), it will often require state-issued permits or other authorizations to go forward. The controversy in the pending Constitution Pipeline cases concerns the extent to which a state may assert authority over discrete aspects of a federally-regulated project in a manner that delays or prevents its construction.
Recently proposed legislation in the U.S. House of Representatives would require FERC to revise its review process for proposed natural gas pipeline expansion projects to include additional analysis of cumulative impacts in a single region or State and extended environmental monitoring. While this bill is unlikely to gain traction in the Republican-controlled House, it is indicative of an ongoing debate about the need for and environmental impacts of new pipeline construction, and the role of both federal and state regulators in reviewing and approving such projects—a debate that has attracted national attention in the wake of the Obama administration’s rejection of the Keystone XL project in late 2015.