Federal Energy Regulatory Commission (FERC) Chairman Norman Bay resigned in January. Since that time, FERC has lacked the quorum needed among five commissioners to approve much-needed interstate natural gas and electricity infrastructure projects. Oil & Gas 360 recently covered a Bloomberg Intelligence analyst briefing during which prospects at FERC were discussed by former FERC Commissioner Tony Clark and Baird Senior Research Analyst Ethan Bellamy.
As the article relates, the Rover Pipeline was among seven projects approved in February before FERC lost quorum among its commissioners. Several more are awaiting the Commission’s review, with lengthy wait times ahead for approval:
The seven pipelines approved this year represent 7 Bcf/d of new capacity. Largest among them is the Rover Pipeline, a $4.2 billion 3.3 Bcf/d line that will transport gas from the Utica to Ohio, West Virginia, Michigan, and Ontario. The second largest pipeline that was approved is the $3 billion 1.7 Bcf/d Atlantic Sunrise. This will take gas from the Marcellus all the way to Alabama.
However, according to Baird, nearly 12 Bcf/d of pipeline projects with a total cost of $16.7 billion are awaiting FERC approval. FERC increased its power to approve smaller activities without a quorum, but final project approval still requires one. Baird estimates that restoring a quorum will likely take two months, and currently no appointees have been nominated.
Further, former FERC Commissioner Tony Clark noted that the number of projects on the docket for review continues to grow:
According to former FERC Commissioner Tony Clark, about one FERC order per day is held up by a lack of quorum. This means that there is a backlog of about 35 orders already, with more arriving each week. Clark expects that even if someone was nominated today, a quorum will not be achieved until late May or early June, if not later. This would mean that there would be perhaps 85 pending issues when FERC becomes able to rule on them. Therefore, it will take a significant amount of time before FERC is able to quickly respond to new applications.
While recent reports indicate that President Trump could have potential nominees in mind, he has yet to formally announce any new commissioners. In order to continue much-needed progress on critical infrastructure projects, it’s critical that the Trump Administration take action on FERC. CEPI looks forward to expedient action on the issue.