Climate Change Agenda Could Have FERC Selecting Pipeline Projects

By Stephen Barlas, Washington Editor | January 2009 Vol. 64 No. 1

Worries about potential escalating demand for natural gas from electric utilities and industrials forced to switch fuels because of climate change legislation from Congress was the major factor behind the FERC natural gas infrastructure workshop on Nov. 21.

But it is not clear that the commission will change any of its pipeline siting policies during an Obama Administration to help get shale gas from the Rockies more quickly to both coasts.

What worried Claire Burum, senior vice president of regulatory and government affairs, NiSource Gas Transmission & Storage, who appeared on behalf of INGAA, was the prospect of congressional legislation dictating that FERC come up with a national plan for siting of new pipelines, based on some sort of federal analysis of potential new supplies and demand. That was the requirement in the Natural Gas Strategy Act introduced last year by Reps. Tim Bishop (D NY) and Elijah E. Cummings (D MD). FERC Chairman Joe Kelliher seconded Burum’s criticism of the bill. “If it's a government orchestrated or run planning process, they're going to miss major projects,” Kelliher said. “If FERC were in charge of planning the pipeline network, I doubt we would identify the right projects.”

New infrastructure approval dictates to FERC could come directly via an energy bill Congress is likely to pass in 2009, or indirectly in the form of a headlong, fuel switching drive hastened by legislation limiting emissions of carbon dioxide and other greenhouse gases. “One issue that I think is important to all the commissioners is the impact of the current uncertainty on climate change policy on gas demand,” explained Kelliher in opening the workshop.

Kelliher’s comments on climate change were echoed by Commissioner Jon Wellinghoff, who because of his closeness to Senate Majority Leader Harry Reid, is considered a good possibility for FERC chairman in an Obama administration. “I think there are a number of options that we need to look at, as to how we can better and best utilize natural gas in this country, so that in a carbon-constrained world, it doesn't come back to bite us,” Wellinghoff said.