WORLD NEWS FERC revisits review of policy statement on interstate natural gas pipeline proposals The Federal Energy Regulatory Commission (FERC) has reopened its review of the 1999 Policy Statement on the Certification of New Interstate Natural Gas Facilities by asking for new information and additional perspectives that would assist the commission in moving forward with its review. The commission is looking to build upon the record already established in response to its April 2018 Notice of Inquiry. “It’s important to recognise that many changes have occurred since our initial inquiry three years ago,” FERC Chairman Rich Glick said. “I look forward to seeing the comments and working with my fellow commissioners to update our review process for reviewing proposed natural gas projects.” To guide the process and focus on adding to the existing record, the commission seeks comments on new questions that modify or add to the April 2018 Notice of Inquiry. For example, the commission requests comments on how it identifies and addresses potential health or environmental effects of its pipeline certification programmes, policies and activities on environmental justice communities. The Notice of Inquiry also seeks comment on how the commission determines the need for a project, the exercise of eminent domain and landowner interests, the commission’s consideration of environmental impacts and improvements to the efficiency of the commission’s review process. Comments on the Notice of Inquiry are due 60 days after publication in the Federal Register. The Institute for Energy Economics and Financial Analysis (IEEFA) said in a statement: “The announcement marks an important opportunity for FERC to chart a new, practical
course in the regulation of US pipeline construction projects, and reverse industry trends that destroy investor dollars, kill jobs, and cause unnecessary environmental and community disruptions.” The statement went on to say: “The commission’s decision to reopen its policy review occurs as the inadequacies of the existing policy, which IEEFA analysed in a December report, have become painfully apparent. FERC’s failures to curb overbuilding of pipeline capacity have caused adverse economic impacts and impaired the property rights of people whose lands lie in the paths of proposed pipelines. “Instead of conducting a rigorous analysis of public need for gas pipeline projects, FERC continued to rely on the false premise that the mere existence of business contracts for the gas means the public needs it. “The report established that such deferential reliance on industry practices is misplaced. Pipeline developers have been missing the mark in adjusting to economic changes that have reduced the share of natural gas in the energy market, as well as the rate of growth in energy demand. “The report also demonstrated that FERC’s approach resulted in poor decisions. FERC approved three major pipelines that wound up being cancelled in 2020. The projects had incurred substantial costs and imposed significant burdens on agencies and the public. Subsequent reviews exposed weaknesses in the projects that FERC should have identified at the outset. “The result of this process could be a major shift in pipeline project analysis and in government action that promotes economically sustainable energy development.”
Winter storm wreaks havoc on Texas power grid Winter storms brought prolonged subzero temperatures to the midwest and southern US states in February. In Texas, the largest US crude-producing state, electricity demand soared and the power grid failed. Production from oil wells and refineries was halted and restrictions were put in place by natural gas and crude pipeline operators. A large part of both the utility-scale wind and conventional power generation resources went offline due to mechanical issues from the cold temperatures. Demand outstripped supply by 30%, with 30 GW of power plant outages. Whilst the power suppliers imposed rolling blackouts, authorities urged residents and businesses to conserve energy by limiting their consumption of electricity. Some three million homes and businesses were left without power. The Electricity Reliability Council of Texas (ERCOT), which operates the electric grid and manages the deregulated market for 75% of the state, issued a report indicating that about 43 GW of capacity was forced off the Texas grid by the winter storm. It claimed that nearly twothirds of that stilled generation was thermal, while 38% was wind and solar combined.
Reuters reported that Kinder Morgan cited gas pipeline capacity constraints at locations in Arkansas, Illinois, Louisiana, New Mexico and Texas, while Enable Gas Transmission said it was taking measures to ensure adequate supply for customers. Oil pipeline operator Enbridge Inc. said a 585 000 bpd crude oil pipeline that runs from its terminal near Pontiac, Illinois, outside of Chicago, to the largest US oil storage hub in Cushing, Oklahoma, was halted because of power outages. Gasoline prices are expected to rise by 10 to 20 cents a gallon after the winter storms knocked out a dozen refineries. Refinery outages removed about 20% of the nation’s oil refining capacity. Texas Attorney General Ken Paxton is set to investigate the state’s electricity system operator and other utilities in the wake of the deep freeze and resulting power outages. A release about the Civil Investigative Demands sent to ERCOT and other power companies focused on “The large-scale failure of Texas power companies to withstand the winter storm [which] left multiple millions of Texans without power and heat during lethal, record-low temperatures across the state.”
MARCH 2021 / World Pipelines
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