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U.S. pipeline agency pulls back plan to assess climate impacts

UPDATED: Thu., March 24, 2022

Chairman Joe Manchin, D-W.Va., left, and Sen. John Barrasso, R-Wyo., talk during a hearing of the Senate Energy and Natural Resources Committee on Capitol Hill, on March 10.  (Associated Press )
Chairman Joe Manchin, D-W.Va., left, and Sen. John Barrasso, R-Wyo., talk during a hearing of the Senate Energy and Natural Resources Committee on Capitol Hill, on March 10. (Associated Press )
By Matthew Daly Associated Press

WASHINGTON – Amid pushback from industry and lawmakers in both parties, federal energy regulators on Thursday scaled back plans to consider how natural gas projects affect climate change and environmental justice.

The Federal Energy Regulatory Commission said a plan to consider climate effects will now be considered a draft and will only apply to future projects.

Industry groups and key lawmakers had criticized a proposal approved last month to tighten climate rules, saying it was poorly timed amid a push for increased natural gas exports following Russia’s invasion of Ukraine.

Senate Republican Leader Mitch McConnell called the climate policy “baffling,” while Senate Energy Committee Chairman Joe Manchin, D-W.Va., said the agency’s “reckless decision to add unnecessary roadblocks” to approval of natural gas projects “puts the security of our nation at risk.”

“At a time when we should be looking for ways to expedite the approval of these important projects, the (energy) commission has chosen on a purely partisan basis to do the exact opposite,” McConnell wrote in a letter Thursday, hours before the panel backtracked on the climate proposal.

Climate activists accused FERC of bowing to political pressure, a claim FERC Chairman Richard Glick denied.

“I’m not going to do anything for political purposes,’’ he told reporters, adding that he and other commissioners have had discussions with numerous pipeline and natural gas companies since the panel approved the climate policy last month. Industry leaders told them the policy changes “raise additional questions that could benefit from further clarification,’’ Glick said.

At a Feb. 17 meeting, the energy commission approved policy statements directing officials to consider how pipelines and other natural gas projects affect climate change and environmental justice.

The statements were approved on a 3-to-2 vote along party lines, with Glick and two other Democratic commissioners supporting the policy changes and two Republicans opposed.

The panel said at the time that the new guidance would take effect immediately and apply to pending and future gas projects. The panel voted unanimously Thursday to step back from that commitment, which is now labeled as a draft and would apply only to projects filed after FERC finalizes the policy statements. The commission said it will seek further public comment before making a final decision.

In a related development, FERC approved three natural gas projects that have been pending before the panel for months. Two of the projects will expand gas production in the U.S. Gulf Coast, while the third is located in New York State. One of the projects will connect with an export terminal in Louisiana for liquefied natural gas.

The U.S. sharply increased LNG exports to Europe in the runup to the Ukraine war and is looking for ways to “surge” LNG supplies to Europe to help reduce the European Union’s dependence on Russian gas, said Jake Sullivan, President Joe Biden’s national security adviser.

The EU imports 90% of the natural gas used to generate electricity, heat homes and supply industry, with Russia supplying almost 40% of EU gas and a quarter of its oil.

The American Gas Association said FERC’s action to delay the climate policy was “encouraging,” adding that without changes, the plan would “actively discourage the development of pipeline infrastructure, reduce reliability and raise consumer costs.’’ The industry group filed a legal challenge to the climate plan last week.

Wyoming Sen. John Barrasso, the top Republican on the Senate energy panel, said FERC “must go back to the drawing board and start over on these harmful proposals.″

But Kelly Sheehan, senior director of the Sierra Club’s energy campaigns, said the draft policy was a small step toward meeting the commission’s legal requirements to protect the environment and guard against climate change.

“The fossil fuel industry and the politicians they finance are pitching a fit because they’re worried FERC’s modest proposed policy changes might mean they no longer have free rein to build as many polluting pipelines as they want, with no regard for the impacts on communities or the climate,″ Sheehan said.

FERC’s approval Thursday of three fracked-gas pipelines “makes it painfully clear that FERC has not changed course,″ Sheehan added.

Former FERC Chairman Neil Chatterjee, a Republican who supported a compromise proposal on climate change last year, decried the panel’s actions.

“Today’s result exposes that @ferc is now a political body more than a quasi-judicial one,’’ he wrote Thursday on Twitter. “Should more emphasis be placed on ‘lobbying’ commissioners than focusing on arguments in (court) pleadings?”

Chatterjee, a former McConnell aide who was elevated to chairman by former President Donald Trump and later demoted by Trump, called the panel’s decision to delay the climate rule “a big-time win” for pipeline companies. Any company considering a natural gas project “should expedite and move forward ASAP before the commission finalizes the statements,’’ he wrote.

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