The Federal Regulatory Energy Commission signaled that it would take another look during its March 24 meeting at the new framework for considering climate change impacts of natural gas infrastructure in permitting decisions. The policy revision has faced intense criticism from Republican lawmakers, independent analysts and the gas industry.

The meeting agenda, released March 17, said FERC expected to address the policy update, but there was little insight about the actions the commission might take.

The notice also listed several permitting actions related to specific gas projects. Three of those projects had received extra environmental reviews by FERC for the purpose of evaluating greenhouse gas emissions.

Analysts interpreted the notice as an indication that the commission could move to clarify the policy revisions, amending two statements that described the agency's treatment of greenhouse gas emissions and the commission's broader approach to permitting decisions. (PL18-1 and PL21-3) The policy overhaul, approved by FERC's Democratic majority in a 3-2 vote on Feb. 17, pushed project sponsors to address climate impacts and go further in demonstrating the need for projects. But significant uncertainty remained over implementation.

FERC already planned to revisit the policy on greenhouse gas emissions — which the Democratic majority decided to issue on an "interim basis" — after seeking input in a public comment period.

"We did not expect FERC to necessarily clarify its position prior to the close of comments on April 4 for the interim [greenhouse gas] policy statement," ClearView analysts said in a late March 17 note to clients. "However, it appears that the commission plans to take some sort of action on clarification at the open meeting next week."

ClearView also said FERC actions to amend or clarify orders in the past "usually track rehearing requests." No such request had been filed at the time that FERC released its meeting agenda, but several pipeline industry participants filed comments outlining their concerns over the policy changes.

"In this case, we think that FERC could be amending/revising both orders," ClearView said.

Policy language 'confused people'

Texas filed a rehearing request in the proceeding March 18, saying the FERC policy changes "erected nearly impenetrable barriers for most projects to obtain regulatory approval to the detriment of the natural gas industry, consumers and states like Texas."

Other critics of the changes have denounced the new permitting approach as likely to delay or block gas infrastructure at a time when the White House is looking to boost gas supplies to Europe following Russia's invasion of Ukraine. Sen. Joe Manchin, D-W.Va., chairman of the Senate Energy and Natural Resources Committee, is among the most vocal detractors. During a March 3 Senate committee oversight hearing, Manchin urged FERC to delay the implementation of its policy overhaul and suggested FERC Democrats should seek compromise with Republican commissioners on changes to the policy.

The committee's ranking member, John Barrasso, R-Wyo., said FERC should make major changes to win the Republican commissioners' support. Barrasso also mentioned intervention by GOP lawmakers, floating the possibility of confirmation battles connected to the expiration of FERC Chairman Richard Glick's term at the end of June.

On March 16, Republican FERC Commissioner Mark Christie offered an "outline of a possible compromise" to S&P Global Commodity Insights that touched on how FERC determines project need, fair processes for landowners, and the divisive topic of greenhouse gas considerations.

Glick, after meeting with company executives during CERAWeek by S&P Global energy conference in Houston, said March 10 that FERC may need to clarify the policy update and make clear that the commission will not require developers to mitigate planet-warming emissions that occur downstream from their projects.

"I think there was some other language in there that confused people," Glick told reporters at the conference. "We are not going require mitigation of downstream emissions."

'Let's see' if FERC changes approach

The uncertainty around the commission's policy changes was illustrated in a March 18 climate review for a more than 50,700-Dth/d expansion of ANR Pipeline Co. natural gas transportation system in Wisconsin. (CP21-78)

"The commission has stated it will consider proposals by project sponsors to mitigate all or part of their projects' climate change impacts, and the commission may condition its approval on further mitigation of those impacts," FERC staff said in the environmental review. "We note these policy decisions are pending at the time of this [environmental impact statement] publication, and their resolution is beyond the scope of staff's [National Environmental Policy Act] review in this proceeding."

During a March 11 CERAWeek appearance, Manchin criticized FERC for "throwing up so many obstacles" to pipeline and LNG project development.

"I'm not saying push them all through," Manchin said. "I'm just saying, 'Do your damn job.'"

Several project developers at the conference criticized the policy changes. "My view is extremely simple. FERC was not instituted to legislate," Charif Souki, executive chairman of LNG developer Tellurian Inc., said during an interview. "That's the prerogative of Congress."

Neil Chatterjee, a former Republican FERC chairman and commissioner, described the March 17 notice from FERC as "curious" in a post on Twitter.

"If FERC is backing off the approach from last month that would be a welcome development," Chatterjee said. "Let's see."

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