Pipeline Citing Bill Passes House; Tough Senate Battle Lies Ahead

January 2014, Vol. 69 No. 1

LaFleur, who had only been "acting" chairman for two weeks at the time of the hearing, said she had been talking with the other three commissioners and trying to reach a consensus. Then she ticked off four issues which she apparently will focus on: 1) reliability and security, including resource adequacy, 2) Order 1000, which is an electric rulemaking, 3) making sure markets are fair, and they work to attract investment, and 4) infrastructure.

Then Rep. Bob Latta (R-OH) asked her where natural gas pipeline permitting fit in to her priorities. LaFleur responded, "I referred to that generally within infrastructure."

One pipeline industry lobbyist who was at the hearings said LaFleur's answer spoke volumes, and not in a good way. He said electricity issues will continue to dominate FERC’s time and energy.

Natural gas supplies also came up in another context: the siting of liquefied natural gas (LNG) facilities. The FERC currently has 13 construction applications for new export facilities. LNG exports have been something of a hot button issue, especially gaining Department of Energy approval. Once a company receives FERC approval to build an export facility, it must submit a separate application to the DOE in order to export LNG to countries that do not have a free trade agreement (FTA) with the United States. One of the factors the DOE considers is national security. Exports to FTA countries do not need DOE approval.

Last May, the DOE gave Freeport LNG approval to ship 1.4 Bcf/d of LNG to non-FTA countries. Then in mid-November, the DOE approved another 400,000 Mcf/d in LNG exports from the planned Freeport terminal. But the figure fell far short of the 1 Bcf/d the company had asked for. Rep. Joe Barton (R-TX) asked LaFleur whether the DOE action was related to the FERC original construction approval, which was for a volume below what Freeport had sought from the DOE in November. LaFleur answered that the better question was why Freeport asked for one volume from FERC and then a higher one from the DOE.

Barton pursued the LNG topic against the backdrop of the blockbuster potential of shale gas exports which "affect strategic interests." He said he had met the night before with representatives of the Russian energy industry. "They are very, very aware of the impact LNG exports will have in markets they now dominate," he reported.

Rep. John Shimkus (R-IL) emphasized that LNG exports are "critical to our NATO allies such as Poland and Lithuania who want to stop extortion by Russia."

Transmission Companies Push for Easing of Class Location Reach and Requirements