Introduction

On February 17, 2022, the Federal Energy Regulatory Commission (FERC) issued two statements updating its policies and procedures for the certification (permitting) of interstate natural gas pipelines and associated natural gas infrastructure. The first statement, Certification of New Interstate Natural Gas Facilities, established a new policy "to provide a more comprehensive analytical framework" for how FERC would evaluate certificate applications.¹ The second statement, Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure Project Reviews, established the commission's interim policy for evaluating the greenhouse gas (GHG) impacts of proposed gas pipeline projects and described how FERC would "integrate climate considerations into its public interest determinations."² On March 24, 2022, facing criticism of these new policies and requests for rehearing, FERC issued an order redesignating both policy statements as drafts and inviting additional comments.³ The commission has not stated if or when it intends to reissue revised policy statements based on these proceedings.

The United States is the world's largest producer of natural gas.⁴ Policy changes by FERC affecting natural gas infrastructure could have significant implications related to U.S. natural gas resource development, prices, and associated environmental and social impacts. They also could have implications for the expansion of U.S. liquefied natural gas (LNG) exports, which have become a priority of the Biden Administration due to Russia's invasion of Ukraine. For these reasons, FERC's policies are the subject of scrutiny within Congress and among a wide range of stakeholders.

FERC's new policy statements were intended to supersede the commission's 1999 Policy Statement on Certification of New Interstate Natural Gas Pipeline Facilities—which remains in effect.⁵ The 2022 policy statements and subsequent order continue the commission's February 2021 Notice of Inquiry (NOI) process to reconsider its gas pipeline certification policies and procedures.⁶ They are the latest developments in a series of legislative proposals, executive orders, court rulings, and commission orders which address the federal regulation of gas pipeline permitting. FERC's inquiry process has provided both advocates and opponents of natural gas pipeline development an opportunity to express their views about how the commission considers such projects. The proceedings may also highlight issues of focus for future congressional oversight and legislation.

Development of the U.S. natural gas pipeline network has been an ongoing focus of Congress, prompting numerous hearings and legislative proposals over the last decade. A number of related bills have been introduced in the 117^th Congress, including the FREE American Energy Act (S. 3982), the ENSURE Act (S. 3908), the Energy Freedom Act (S. 3762, H.R. 7094), the Ukraine Assistance and American Energy Acceleration Act (H.R. 7012), the CLEAN Future Act (H.R. 1512), the Environmental Justice Mapping and Data Collection Act of 2021 (H.R. 516), the Promoting Interagency Coordination for Review of Natural Gas Pipelines Act (H.R. 1616), the Rebuild America Now Act (S. 1254), the Safe and Accountable Federal Energy Review for Pipelines Act of 2021 (H.R. 2115), the SAFER Pipelines Act of 2021 (H.R. 2115), and several bills addressing pipeline landowners' rights.⁷

This report provides an overview of the federal certification process for interstate natural gas pipelines and recent policy issues which have been the subject of debate, legislation, and litigation. It reviews recent executive orders intended to influence federal approval of natural gas pipeline projects. The report summarizes select legislative proposals in the 117^th Congress (and prior Congresses in the Appendix) directed at the federal review of interstate natural gas pipeline certificate applications. It also summarizes FERC's new policy statements for natural gas pipeline certification and evaluation of pipeline climate impacts. The report concludes with a discussion of policy issues for Congress.

A Growing Gas Pipeline Network

The United States' supply of natural gas has grown substantially due to technological advancements, such as horizontal drilling and hydraulic fracturing, which have increased producers' ability to extract natural gas from shale formations. Shale gas is now the dominant source of U.S. natural gas supply.⁸ The continued growth in U.S. shale gas production to meet growing demand in key consuming sectors has been driving the expansion of natural gas pipeline infrastructure at the local level (to gather and process the gas) and at the national level to transport natural gas from producing regions to consuming markets, typically in other states.

Figure 1. U.S. Natural Gas Transmission Pipelines

Source: U.S. Energy Information Administration. "U.S. Energy Mapping System," online maps, accessed May 19, 2022, https://www.eia.gov/state/maps.php. Note: There are no significant natural gas transmission lines in Alaska or Hawaii.

Over 300,000 miles of high-capacity transmission pipeline already transport natural gas across the United States (Figure 1).⁹ However, if long-term growth trends in U.S. shale gas production and demand continue, the need for new pipelines could still be substantial. For example, a 2020 analysis by the INGAA Foundation, a pipeline industry research organization, concluded, "As the impacts of COVID-19 diminish over time, the drivers of new infrastructure return.... [A]lmost 33 billion cubic feet (BCF) per day of capacity is expected to be placed into service through major gas pipeline projects from 2020 through 2025."¹⁰

If it were all to be constructed, this new infrastructure would amount to several thousand miles of additional interstate pipeline and on the order of $40 billion in additional capital investment.¹¹

Figure 2 shows annual expansions and additions to natural gas transmission pipeline mileage in the United States since 2004. As the figure indicates, federal and state agencies have approved significant additions to the pipeline system over these years, especially after the onset of the shale gas expansion in 2006-2008. Pipeline construction slowed for a five-year period through 2016 as newly added capacity absorbed new shale gas supplies, but construction increased again after 2016. Altogether, over 25,000 miles of newly constructed or expanded gas transmission pipeline have begun service since 2004. Additional gas pipeline capacity has also become available through conversion of pipelines carrying other commodities or flow reversal of existing natural gas pipelines. Approximately 800 miles of pipeline have been permitted or are under construction with startup anticipated in 2022.¹² Anticipated additions fall to approximately 500 miles in 2023.

Figure 2. U.S. Natural Gas Transmission Pipeline Mileage Additions and Expansions (Miles)

Source: Energy Information Administration (EIA), "U.S. Natural Gas Pipeline Projects," online spreadsheet, January 31, 2022, https://www.eia.gov/naturalgas/data.cfm#pipelines. Notes: Excludes reversal and conversion projects as well as gathering and distribution lines. Anticipated projects in 2022 and 2023 include approved projects and projects under construction but excludes projects "on hold." 2022 also excludes the Mountain Valley Pipeline due to permit litigation. Includes some state-regulated (intrastate) pipelines. EIA figures are based on the agency's analysis of regulatory filings and industry reports.

FERC Pipeline Certification Process

Under Section 7(c) of the Natural Gas Act of 1938 (NGA), FERC is authorized to issue certificates of "public convenience and necessity" for "the construction or extension of any facilities ... for the transportation in interstate commerce of natural gas" (15 U.S.C. §717f(c)). Therefore, companies seeking to build interstate natural gas pipelines must first obtain certificates of public convenience and necessity from FERC.¹³ The commission's regulatory process for the review of certificate applications consists of several principal steps, explained below, which may vary somewhat depending upon whether or not a pipeline developer opts to enter into a voluntary pre-filing process before formally applying for a pipeline certificate.

Application Pre-Filing

Prior to applying to FERC for a pipeline certificate, developers may file a request to use the commission's pre-filing procedures (18 C.F.R. §157.21). The commission established the pre-filing process to encourage the industry to engage early in project development with the relevant public and government agencies. The expectation is that the pre-filing will improve a developer's proposal and avoid problems during the review of a subsequent FERC certificate application. However, while FERC encourages pre-filing, it is not required to apply for a pipeline certificate.

The pre-filing process involves a set of specific activities by the developer—typically studying potential project sites, identifying stakeholders, and holding an open house to discuss the project. Through this process, a developer notifies all stakeholders—including tribal, state, local, and other federal agencies, and potentially affected property owners—about a proposed project so that the developer and commission staff can provide public forums to hear stakeholder concerns. The pipeline developer may then incorporate proposed environmental mitigation measures into the project design, taking into account stakeholder input. Concurrent with the developer's activities, FERC staff participate in public forums and take steps necessary to ensure FERC compliance with the National Environmental Policy Act (NEPA, discussed below). For example, FERC consults with interested stakeholders, including relevant government agencies, and also holds public scoping meetings and site visits in the proposed project area.¹⁴ At the conclusion of pre-filing, the developer prepares a final application and submits it to FERC.

Certificate Application and FERC Review

Whether pre-filing or not, a pipeline developer must formally apply to FERC for a certificate of public convenience and necessity. Among other requirements, the application must contain a description of the proposed pipeline, route maps, construction plans, schedules, and a list of other statutory and regulatory requirements, such as permits needed from other agencies. The application must also include environmental reports analyzing route alternatives—to avoid or minimize environmental damage—and studies of potential environmental impacts (on water, plants, and wildlife), cultural resources, socioeconomics, soils, geology, aesthetic resources, and land use.¹⁵ Upon receiving an application, the commission issues a public Notice of Application in the Federal Register and begins the application review process.

Any person seeking to become a party to FERC's proceeding must file a motion to intervene pursuant to the commission's rules (18 C.F.R. §385.214). Intervenors receive the certificate applicant's filings and other FERC documents related to the case, as well as materials filed by other interested parties.¹⁶ Only intervenors have the right to file briefs, attend hearings, and appeal the commission's decision regarding the certificate. They may also challenge final commission actions in the U.S. Circuit Courts of Appeals.

FERC exercises its NGA Section 7(c) pipeline certification authority in accordance with its own regulations and the guidance of its certification policy. The 2022 draft policy statement lays out how FERC will "determine whether a proposed natural gas project 'is or will be required by the present or future public convenience and necessity,' as that standard is established in section 7."¹⁷ The draft policy statement "does not establish binding rules," but is intended to "provide clarity on how the Commission will evaluate all factors bearing on the public interest, including the balancing of economic and environmental interests."¹⁸ Economic factors may include precedent agreements with shippers for new pipeline capacity, how the gas will ultimately be used, expected pipeline utilization rate, projections of natural gas market growth, and projections of the net benefits to consumers, such as lower natural gas prices due to increased supply competition, among other factors.¹⁹ Consideration of potential adverse factors includes examining impacts to the certificate applicant's existing customers (e.g., subsidization), the interests of existing pipelines (and their captive customers), environmental impacts, and the interests of landowners and surrounding communities (including environmental justice communities, discussed in later section).²⁰ FERC may also take into account certain safety issues, but generally defers to the Department of Transportation, which regulates pipeline safety.²¹ Of the factors above, environmental review typically comprised the bulk of FERC's certificate application review under its 1999 policy statement, and may continue to do so under the 2022 draft certificate policy, especially in light of FERC's 2022 draft interim GHG policy.

Environmental Review Under NEPA

Before FERC can issue a final decision on an application, the agency must identify and consider the environmental impacts of the proposed project in accordance with NEPA (42 U.S.C. §4321 et seq.). NEPA requires federal agencies to "take a hard look at environmental consequences" of their proposed actions (e.g., granting a certificate), consider alternatives, and publicly disseminate such information before taking final action.²² Although an agency must consider these impacts, it need not elevate these environmental concerns above others. Under NEPA, federal agencies must prepare an environmental impact statement (EIS) for federal actions "significantly affecting the quality of the human environment."²³

NEPA also established the Council on Environmental Quality (CEQ), which issues regulations and guidance detailing how federal agencies must implement NEPA.²⁴ CEQ's guidance has included, for example, guidance on consideration of greenhouse gas emissions and the effects of climate change (discussed below). In its regulations, CEQ has directed each federal agency to adopt and supplement the CEQ regulations as necessary to include procedures relevant to that agency's authority and ensure that the procedures implementing NEPA are integrated into the agency's broader decisionmaking process. Accordingly, FERC has promulgated its own regulations implementing NEPA at 18 C.F.R. §380.

The CEQ regulations focus primarily on requirements applicable to the preparation of an EIS, but recognize that documenting compliance with NEPA may involve other procedures. If an agency is uncertain whether a proposal would have significant impacts, it may prepare an environmental assessment (EA) to determine if an EIS is necessary or a finding of no significant impact (FONSI) may be issued. Also, each federal agency is required to identify categories of actions they are authorized to undertake that have been found to have no significant effect on the environment. Such actions are categorically excluded from the need to prepare an EIS or EA and are, hence, broadly referred to as "categorical exclusions" (CEs or CATEXs).²⁵

CEQ requires agencies to determine whether a proposal has significant impacts by identifying and analyzing its direct, indirect, and cumulative effects, defined as follows:

• Direct effects—caused by the project that occur at the same time and place;²⁶
• Indirect effects—caused by the action that are later in time or farther removed in distance but still reasonably foreseeable;²⁷ and
• Cumulative effects—those that result from the incremental impacts of the action when added to other past, present, or reasonably foreseeable future actions regardless of what agency (federal or nonfederal) or person undertakes that other action.²⁸

The Energy Policy Act of 2005 (P.L. 109-58, EPAct) designates FERC as the "lead agency" for coordinating NEPA compliance and "all applicable Federal authorizations" in reviewing pipeline certificate applications (§313(b)). As the lead agency, FERC is required to obtain input from other "cooperating" agencies with statutory jurisdiction or special expertise regarding any environmental impact associated with the project (40 C.F.R. §1508.5). Cooperating agencies for a pipeline project often include the Environmental Protection Agency; the Department of Transportation's Pipeline and Hazardous Materials Safety Administration; the Department of the Interior's Bureau of Land Management (BLM), Fish and Wildlife Service, and National Park Service; and the U.S. Army Corps of Engineers (the Corps), among others.

After FERC staff complete their environmental analysis and cooperating agency consultations, the commission issues a draft EIS with initial recommendations for approval or denial of the certificate. Issuance of the draft EIS also begins a public comment period of at least 45 days, during which FERC is to hold public meetings in the proposed project area.²⁹ After the conclusion of the comment period, FERC reviews the comments and revises its draft EIS in response. FERC then issues a final EIS with final recommendations for approval or denial of the certificate. Under NEPA, a record of decision—in this context a FERC order—cannot be issued until at least 30 days after FERC publishes a notice of availability of the final EIS (40 C.F.R. §1506.10(b)(2)). However, there is no additional opportunity for public comment. When the 30-day period is over, the commission may issue an order approving or denying the certificate.

Certificate Authorities

If FERC grants a pipeline certificate, the commission's order states the terms and conditions of the approval, including the authorized pipeline route and any construction or environmental mitigation measures required for the project. For example, a construction condition might require that the pipeline be buried at a specific depth under a particular river crossing, or that construction be limited during a certain time of year to avoid impacts on wildlife. A FERC certificate confers on the developer the authority to exercise the government's eminent domain authority if certain conditions are met (15 U.S.C. §717f(h)). Also, federal law preempts any state or local law that duplicates or obstructs that federal law (e.g., siting or zoning) relevant to the project.³⁰ In this way, a FERC certificate provides a developer with the authority to secure the necessary rights-of-way to lay the pipeline if the developer cannot secure them from landowners through negotiation.

Although a FERC certificate authorizes a pipeline under the Natural Gas Act, it does not preempt other federal laws that also may apply—such as the Endangered Species Act or the National Historic Preservation Act. Any requirements under other federal statutes must still be met. These requirements may include, for example, securing federal authorizations for water crossings from the Corps, permission to cross federal lands from the BLM, and other federal approvals.³¹ Pipeline developers also may need to secure approvals from state agencies under delegated federal authorities, such as Section 401 water quality certifications under the Clean Water Act (33 C.F.R. §330.4). A developer must secure all these approvals before proceeding with construction.

Post-Certificate Proceedings

Once FERC issues an order granting or denying a pipeline certificate, parties to the proceeding (e.g., the developer or intervenors) who object to the order for any reason may formally request a rehearing so that the commission can reconsider its decision. A party to the proceeding must file a request for rehearing within 30 days after issuance of the final order—a statutory deadline which the commission cannot waive or extend (15 U.S.C. §717(r)). Upon receiving a rehearing request, FERC has 30 days to rule on it or the request is deemed denied, in either case allowing a party involved to appeal FERC's ruling in federal court.³² The commission, by its own order, may not authorize pipeline construction to proceed until the earlier of either the date that a qualifying rehearing request is no longer pending before the Commission or 90 days after the date that a qualifying rehearing request may be deemed denied.³³ If a pipeline certificate is approved after rehearing, the pipeline project may proceed even if additional court challenges have been filed. Once the developer has provided FERC with any outstanding information or taken other actions to satisfy the terms and conditions of the certificate order FERC can issue a Notice to Proceed with Construction Activities and construction can begin. The pipeline developer must then file weekly status reports with the commission documenting project inspection and certificate compliance until construction is completed.

Gas Pipeline Siting Challenges

Over the last decade, proposals for new interstate natural gas pipelines have become increasingly controversial. Many certificate applications have been subjected to heavy public scrutiny, and some have faced significant delays in review, in some cases due to protracted litigation. A May 2018 report by the Department of Energy Inspector General stated that "nothing came to our attention to indicate that FERC had not generally performed the natural gas certification process in accordance with applicable laws, regulations, policies, and procedures."³⁴ Nonetheless, aspects of FERC's permitting practices remain a focus of attention among policymakers because they have been the subject of FERC dissent, debate in Congress, or litigation in federal court.

Identifying Indirect Environmental Impacts

As noted above, FERC is obligated under NEPA to consider the direct and indirect environmental impacts of certificate proposals. Direct effects often are relatively easy to identify. In the context of a pipeline project, a direct effect would be associated with the pipeline itself, such as forest impacts from clearing rights-of-way, or water quality impacts from construction across waterways and wetlands. However, identifying the indirect effects of a proposed gas pipeline has presented challenges and, in some cases, has been controversial. Some stakeholders assert that the indirect "upstream" impacts of a proposed pipeline should include impacts associated with the production of natural gas, such as fugitive methane emissions from gas wells and gas gathering pipelines. They also assert that the indirect "downstream" impacts should include the environmental effects of using natural gas, such as carbon dioxide emissions from natural gas combustion.³⁵

In the past, FERC limited its review of certain upstream or downstream impacts, claiming that they were not reasonably foreseeable. However, in February 2017, a FERC commissioner argued that FERC should analyze the upstream environmental effects of increased natural gas production and should be "open to analyzing the downstream impacts of the use of natural gas."³⁶ In a related legal challenge to a pipeline (Sabal Trail) in Florida for which the effects of natural gas use could be identified, the court ruled that FERC must "either quantify and consider the project's downstream carbon emissions or explain in more detail why it cannot do so."³⁷

In FERC's 2018 order responding to the Sabal Trail ruling, the majority of commissioners concluded that, although its supplemental EIS quantified downstream greenhouse gas emissions associated with the pipeline, there was "no way to determine the significance" of those emissions.³⁸ However, two commissioners raised objections to the majority's conclusion, arguing that the significance of the downstream greenhouse gas emissions could—and should—be quantified.³⁹ In an unrelated FERC order involving a pipeline in New York, the majority stated that they were "unable to find based on the record that the potential increase in greenhouse gas emissions associated with production, non-project transport, and non-project combustion are causally related" to the commission's certification of the project, and that "providing a broad analysis based on generalized assumptions rather than reasonably specific information does not meaningfully inform the Commission's project-specific review."⁴⁰ The two commissioners dissented from this conclusion as well, one arguing that "the mere fact that the record does not contain specific information regarding the greenhouse gas emissions associated with increased production or consumption from a particular natural gas pipeline cannot excuse the Commission from considering those effects under NEPA."⁴¹

Litigation related to FERC's environmental reviews has continued—along with disagreement among commissioners about the proper scope of environmental impacts for pipelines under FERC's jurisdiction. For example, in a 2019 legal challenge involving FERC's approval of a new natural gas pipeline compressor station, while upholding FERC's approval, the court nonetheless was critical of FERC's examination of both upstream and downstream greenhouse gas emissions associated with the project.⁴² In a 2020 FERC order approving another gas pipeline project, concurring and dissenting opinions by two commissioners, respectively, expanded upon their prior support for, or rejection of, FERC's treatment of greenhouse gas emissions in environmental reviews.⁴³ In March 2021, FERC announced that it had "for the first time assessed the significance of a proposed natural gas pipeline project's greenhouse gas emissions and their contribution to climate change."⁴⁴ The associated certificate order (approving Northern Natural Gas Company pipeline facilities) states

In previous orders, the Commission has concluded that it was unable to assess the significance of a project's greenhouse gas (GHG) emissions or those emissions' contribution to climate change. Upon reconsideration, we no longer believe that to be the case. Accordingly ... we assess the significance of the project's GHG emissions and their contribution to climate change. Based on the record in this proceeding, we conclude that those impacts are not significant.⁴⁵

However, adopting this approach was not unanimous. While concurring with the approval of the pipeline project, two commissioners dissented (in part) with respect to the greenhouse gas assessment on legal grounds or because they believed that FERC's change in approach was premature.⁴⁶

FERC's 2022 draft GHG interim policy establishes an approach to GHG emissions along the lines of its order in the Northern Natural Gas Company application. The draft GHG policy states that the commission

will quantify a project's GHG emissions that are reasonably foreseeable and have a reasonably close causal relationship to the proposed action, including those effects that occur at the same time and place as the proposed action and effects that are later in time or farther removed in distance from the proposed action. This will include GHG emissions resulting from construction and operation of the project as well as, in most cases, GHG emissions resulting from the downstream combustion of transported gas.⁴⁷

Furthermore, the draft GHG interim policy establishes a specific numerical threshold to determine the significance of GHG emissions for the purpose of establishing the appropriate level of environmental review under NEPA. According to commission staff, FERC "will presume, unless refuted by record evidence, that projects with estimated greenhouse gas emissions of 100,000 metric tons per year of carbon dioxide equivalent will have a significant impact on the environment."⁴⁸ Presuming that a proposed pipeline project would have a "significant" environmental impact would necessitate the completion of an EIS (rather than a less extensive EA) for environmental review under NEPA. The draft policy also encourages pipeline developers to propose measures to mitigate the upstream or downstream GHG emissions associated with their projects that the commission could evaluate on a case-by-case basis in making permit decisions. As it does for other types of permit conditions which the commission may impose under the NGA, FERC states that it may condition a pipeline permit approval on further mitigation of GHG impacts.⁴⁹

Evaluating Project Need

FERC's review of a certificate application requires the commission to evaluate the public benefit from the proposed project. Benefits the commission may consider include meeting unserved demand, eliminating pipeline bottlenecks, accessing new gas supplies, lowering consumer costs, providing greater reliability, and increasing competition, among others. The principal component of this evaluation historically has been demonstrated market need for the pipeline in the form of contracts with future customers for its capacity. According to FERC's 1999 policy statement,

a new pipeline project must show market support through contractual commitments for at least 25 percent of the capacity for the application to be processed by the Commission. An applicant showing 10-year firm commitments for all of its capacity, and/or that revenues will exceed costs is eligible to receive a traditional certificate of public convenience and necessity.⁵⁰

Some stakeholders have questioned FERC's reliance on contracts from future customers (known as "precedent agreements") to prove market need, particularly when those contracts involve companies affiliated with the pipeline developer. The commission considered this concern in 1999 but established no special provisions for developer affiliates. FERC "gives equal weight to contracts between an applicant and its affiliates and an applicant and unrelated third parties and does not look behind the contracts to determine whether the customer commitments represent genuine growth in market demand."⁵¹ Nonetheless, in January 2018 one FERC commissioner dissented from the approval of a certificate because over three-quarters of the pipeline's capacity under precedent agreements was associated with affiliates, and was therefore "insufficient to carry the developer's burden to show that the pipeline is needed."⁵²

In remarks at a February 13, 2018, meeting of state utility regulators, the FERC chairman stated that the commission would "have to take a look at" whether recent precedent agreements, and particularly affiliate agreements, represent "valid, arm's length" demonstrations of pipeline capacity demand.⁵³ However, an April 2020 order denying a request for certificate rehearing reaffirmed the commission's reliance upon precedent agreements, asserting that such agreements "are significant evidence of demand for a project," and that FERC is not required to assess project benefits "by looking beyond the market need reflected by the applicant's precedent agreements with shippers."⁵⁴

Also related to the issue of market need, some stakeholders have objected to FERC's project-by-project approach to evaluating applications—especially for multiple pipelines proposed in one region.⁵⁵ Some in Congress have called on FERC to adopt a more overarching approach to pipeline development, collectively considering existing capacity and multiple projects together rather evaluating them independently.⁵⁶ However, FERC asserted in 2015 that it "does not engage in regional planning exercises that would result in the selection of one project over another."⁵⁷ Nonetheless, in October 2017, one FERC commissioner dissented from the approval of two pipelines through Virginia on the grounds that both projects might not be needed due to geographic proximity.⁵⁸

FERC's 2022 draft policy would reaffirm the importance of precedent agreements in application review, but would expand the scope of what FERC would consider in evaluating project need. According to the 2022 draft policy statement, "although precedent agreements remain important evidence of need, ... the existence of precedent agreements may not be sufficient in and of themselves to establish need for the project."⁵⁹ With respect to affiliate agreements, specifically, the policy states that "projects supported by precedent agreements with affiliates raise unique concerns regarding need for the project... [and] will generally be insufficient to demonstrate need."⁶⁰ Under its new policy, in addition to precedent agreements, the commission would consider "the circumstances surrounding the precedent agreements, as well as other evidence of need, including demand projections underlying the capacity subscribed, estimated capacity utilization rates, potential cost savings to customers, regional assessments, and statements from state regulatory commissions or local distribution companies."⁶¹

The commission also would "look for information about the intended end use of gas to help explain why a project is needed."⁶² Although FERC's 2022 draft policy does not call for commission-driven regional planning for pipeline capacity, it calls for the commission to evaluate whether "other suppliers," presumably including other existing or proposed pipelines, "would be able to meet some or all of the needs to be served by the proposed project on a timely, competitive basis or whether other factors may eliminate or curtail such needs."⁶³

Timing and Relations with Other Agencies

There are no statutory time limits within which FERC must complete its own certificate review process or issue an order. However, EPAct authorizes FERC to establish a schedule for all federal authorizations and creates a cause of action "if a Federal or State administrative agency" fails to comply with that schedule (§313(b)). As discussed above, natural gas pipelines typically require permits from federal and state agencies in addition to FERC. Since 2002, FERC and nine other federal agencies have operated under an interagency agreement on early coordination required for review of interstate natural gas pipeline certificate applications.⁶⁴ Under this agreement, when FERC receives a certificate application, the agencies commit to early involvement, proactive participation, sharing of data, informal communication, and resolving disputes. FERC has promulgated regulations under the EPAct authority requiring certificate-related final decisions from federal agencies or state agencies (acting under delegated federal authority) no later than 90 days after the commission issues its final environmental document, unless another schedule is established by federal law (18 C.F.R. §157.22).

Congress included the schedule provisions in EPAct to address concerns that some interstate gas pipeline approvals were being unduly delayed by a lack of coordination or insufficient action among agencies involved in the certification process.⁶⁵ Notwithstanding the directives above, pipeline developers have long asserted that cooperating federal agencies have not always coordinated effectively with FERC in its review of certificate applications and have not always complied with FERC's deadlines.⁶⁶ For example, a 2012 study by the INGAA Foundation concluded that, despite the schedule provisions in EPAct intended to expedite the review of FERC certificate applications for gas pipelines, "the time required to secure regulatory approvals for such projects is increasing."⁶⁷ Likewise, some in Congress have argued that gas pipeline reviews have been "delayed unnecessarily due to a lack of coordination or insufficient action among agencies involved."⁶⁸ Subsequent debate in congressional hearings about the timing of FERC's certificate reviews indicated both criticism of and support for FERC's process.⁶⁹ The length of permit review, and project delays due to challenges to FERC reviews, remain a key interest among developers and in Congress.⁷⁰

FERC staff have stated in the past that the commission seeks to complete review of certificate applications within 18 to 24 months of filing.⁷¹ However, there has been disagreement, even among FERC commissioners, as to the extent FERC is meeting this standard. For example, in September 2021, the FERC chairman testified that the time the commission was taking to approve certificate applications was comparable to that in previous years.⁷² By contrast, in November 2021, another FERC commissioner argued that FERC's average time to review pipeline certificate applications was significantly longer than it was from 2011 through 2020 based on the commissioner's own analysis of NGA Section 7 applications.⁷³

Whether FERC's record of certificate application review demonstrates process efficiency is open to debate. Pipeline projects are complex and unique, each with its own potentially complicating factors. Moreover, attempting to compare FERC's recent certificate review timing to historical timing is complicated by the lack of a quorum of FERC commissioners (required for certificate decisions) for six months in 2017 and the impacts of the COVID-19 pandemic on FERC's staffing and administrative functions beginning in 2020. Permit application review may also include time taken by developers responding to questions or providing supplemental information or analysis requested by regulators, which may be outside the control of the commission.

Changes in the Domestic Gas Industry Structure

Over the last 20 years, there have been fundamental changes in the structure of the U.S. natural gas sector. Most significant among these are widespread use of hydraulic fracturing, new gas production regions (e.g., the Marcellus formation underlying parts of Pennsylvania and other states), increasingly interconnected natural gas infrastructure in more populated areas, and greater dependence on natural gas to fuel power plants. These changes, in turn, have introduced new considerations in pipeline permit review, including new concerns about greenhouse gas emissions, potential groundwater and seismic risks, pipeline safety, energy infrastructure security, and changing contractual relationships with pipeline customers. For example, with the shift away from coal to natural gas for power generation, regulators and operators have expressed concerns about the potential linkage between the availability of natural gas and the reliability of electricity supply in markets with constrained infrastructure.⁷⁴ This linkage was demonstrated in the February 2021 Texas blackout which happened, in part, because freezing temperatures disrupted natural gas supplies to gas-fired power plants.⁷⁵ Some stakeholders have asserted that FERC should change or expand the nature of its certificate reviews to better account for such considerations.⁷⁶

Natural Gas Infrastructure for Export

The rapid growth in U.S. natural gas production has led to increased exports of pipeline gas to Canada and Mexico and of LNG to overseas buyers. Some communities affected by pipeline development have questioned whether FERC appropriately applies the "public convenience and necessity" standard under the Natural Gas Act to pipeline projects which would serve export markets.⁷⁷ FERC has asserted that considerations regarding the domestic versus foreign destination of natural gas are solely under the jurisdiction of the Department of Energy, which has statutory authority to approve the export of the natural gas commodity.⁷⁸ Nonetheless, some analysts have questioned whether FERC may evaluate pipelines proposed to facilitate natural gas exports differently from those proposed to supply domestic markets.⁷⁹

In litigation involving a pipeline project proposed partly for exports, a September 2019 court decision remanded to FERC "for further explanation of why ... it is lawful to credit precedent agreements with foreign shippers serving foreign customers toward a finding that an interstate pipeline is required by the public convenience and necessity."⁸⁰ In its response to the court, the commission provided additional justification for using export precedent agreements as appropriate evidence of market demand.⁸¹ However, some legal analysts have questioned FERC's certification of infrastructure developed partly or primarily to serve export markets.⁸²

Russia's invasion of Ukraine has complicated such considerations by focusing attention on geopolitical aspects of natural gas supply, which Russia has exploited for strategic and economic advantage in Europe.⁸³ Russia's manipulation of pipeline gas deliveries has prompted European countries to urgently seek alternative natural gas supplies from LNG exporters, especially in the United States. In support of these efforts, on March 25, 2022, President Biden announced an initiative to increase U.S. LNG exports to the European Union market.⁸⁴ To expand European LNG trade, developers in the United States may proceed with plans to construct new LNG export infrastructure which has already been permitted by FERC and other agencies.⁸⁵ Natural gas pipeline companies, in turn, are pursuing plans to expand domestic pipeline capacity to supply new LNG export terminals and existing terminal expansions.⁸⁶ How FERC's pipeline certification policies should account for geopolitical considerations arising from military conflict in Europe, and how they should be balanced against domestic policy considerations, are evolving topics within and outside the commission. How FERC incorporates these issues in its pipeline policy decisions may present new challenges for stakeholders.

Environmental Justice⁸⁷

Environmental justice, which involves concerns of disproportionate risks to health and safety across communities with differing demographics (e.g., race, national origin, or income), has become an important factor in natural gas pipeline siting.⁸⁸ For example, the siting of a natural gas compressor station for the proposed Atlantic Coast Pipeline in Union Hill, VA—a predominately African-American community—became the subject of litigation on environmental justice grounds.⁸⁹ Since 1997, the Council on Environmental Quality has provided guidance for taking into account environmental justice in NEPA reviews.⁹⁰ In 2020, FERC officials reportedly stated that the commission "takes environmental justice concerns very seriously," and that the agency's environmental reviews properly analyze "socioeconomic issues such as environmental justice."⁹¹ Nonetheless, some on the commission and other stakeholders have criticized FERC's consideration of environmental justice issues in its pipeline certification process.⁹² In February 2021, the FERC chairman announced plans to create a new senior-level staff position "charged with working with the experts in all FERC program offices to integrate environmental justice and equity matters into Commission decisions."⁹³ In May 2021, the FERC chairman announced the appointment of a Senior Counsel for Environmental Justice and Equity "to work in building a culture and program that ensures FERC appropriately integrates environmental justice and equity issues into our decisionmaking."⁹⁴

Public Participation

Some in Congress have expressed concern about the ability of landowners and other members of the public to understand and participate effectively in FERC's pipeline certification process.⁹⁵ Specific issues have included landowner notification, understanding of property rights, securing intervenor status, and providing input and comments to FERC during project scoping and review of permit applications, including NEPA review. In 1978, Congress amended the Federal Power Act (Section 319) authorizing FERC to establish an Office of Public Participation (OPP) to "coordinate assistance to the public with respect to authorities exercised by the Commission," and "also coordinate assistance available to persons intervening or participating or proposing to intervene or participate in proceedings before the Commission" (16 U.S.C. § 825q–1). However, funds were not subsequently appropriated for this office and FERC did not establish it. In the past, FERC has asserted that the office was unnecessary, stating in a 2007 proceeding that "even if funding were available, the public interest is adequately represented ... by the Commission, its staff and state agencies," but various public advocates and Members of Congress have disagreed with this assertion.⁹⁶ Likewise, the FERC chairman remarked in April 2021, "the people who can afford the high-priced Washington, DC, law firms that participate in our proceedings, they're adequately represented, but a lot of other people aren't—their voices aren't heard."⁹⁷

In the joint House-Senate Appropriations Committee Report accompanying the Consolidated Appropriations Act, 2021 (P.L. 116-260) Congress again addressed the OPP. The committee directed FERC to submit a report by June 25, 2021, detailing how the commission will establish and operate the OPP, including an organizational structure and budget, beginning in FY2022 and funded through annual charges and filing fees as authorized by the Federal Power Act and the Omnibus Budget Reconciliation Act of 1986.⁹⁸ In accordance with this requirement, on June 24, 2021, FERC published a report laying out its plans to develop the OPP, including staffing to assist the public with learning about, and participating in, FERC proceedings.⁹⁹ In October 2021, the FERC chairman announced the appointment of the OPP's first director.¹⁰⁰

Recent Executive Orders

The development of energy pipelines has been a focus of the last four presidents. The Bush, Obama, Trump, and Biden Administrations issued a series of executive orders directed at the federal permitting of infrastructure projects, specifically including energy infrastructure. A number of these orders have been applicable to interstate natural gas pipelines under FERC's jurisdiction. Exactly how these orders have affected, or may affect, federal review of interstate natural gas pipeline siting is not entirely clear, however, due to the complexity of the certification process and permit obligations under related statutory requirements (e.g., NEPA).

Executive Order 13212

President George W. Bush issued Executive Order (E.O.) 13212 in 2001. Focusing specifically on "energy-related projects," the order directs federal agencies to "expedite their review of permits or take other actions as necessary to accelerate the completion of such projects, while maintaining safety, public health, and environmental protections."¹⁰¹ In the context of natural gas pipelines, the principal outcome of this order was the 2002 interagency agreement on early coordination of pipeline certificate review, which remains in force. In 2005, FERC also signed a memorandum of understanding with the Corps expanding upon this agreement "to further streamline respective regulatory processes" consistent with the executive order.¹⁰²

Executive Order 13604

President Obama issued E.O. 13604 in 2012, "to significantly reduce the aggregate time required to make decisions in the permitting and review of infrastructure projects by the Federal Government, while improving environmental and community outcomes."¹⁰³ Among other requirements, the order called for federal agencies to select "infrastructure projects of national or regional significance" to track on the online Federal Infrastructure Projects Dashboard (§2(c)).

In the context of this executive order, the Administration cited as a best practice for "pre-application/application improvements" FERC's certificate pre-filing process, which was already in place at the time.¹⁰⁴ A 2013 Presidential Memorandum expanded upon the order, directing the Steering Committee on Federal Infrastructure Permitting and Review Process Improvement established by E.O. 13604 "to modernize Federal infrastructure review and permitting regulations, policies, and procedures to significantly reduce the aggregate time required by the Federal Government to make decisions in the review and permitting of infrastructure projects," including pipelines.¹⁰⁵ However, it is not clear to what extent, if any, the executive order and memorandum may have led to changes to aspects of FERC certification for pipelines. None of the three pipelines from this period presumably identified as being "of national or regional significance" (because they were listed on the federal permitting dashboard) were natural gas pipelines.¹⁰⁶

Executive Order 13766

Issued by President Trump in January 2017, the order was intended "to streamline and expedite, in a manner consistent with law, environmental reviews and approvals for all infrastructure projects, especially projects that are a high priority for the Nation, such as ... pipelines."¹⁰⁷ Among other provisions, the order permitted governors, federal department and agency heads, or the FERC chairman to request "high priority" status for a project with respect to "expedited procedures and deadlines for completion of environmental reviews and approvals" (§3). CRS has identified no interstate natural gas pipelines which were classified as high priority under this order.

Executive Order 13777

Issued by President Trump on February 2017, the order was intended "to lower regulatory burdens on the American people by implementing and enforcing regulatory reform."¹⁰⁸ The order required agencies to evaluate existing regulations and identify regulations for repeal, replacement, or modification. Targeted regulations included those that, among other considerations, eliminated jobs (or inhibited job creation); were outdated, unnecessary, or ineffective; or imposed costs that exceeded benefits. In response to the order, FERC "established a regulatory reform task force to perform a thorough review of the Commission's regulations, policies, and processes, and to identify opportunities to reduce regulatory burdens."¹⁰⁹ The commission also issued its April 2018 NOI regarding its pipeline certification policies.

Executive Order 13783

Issued by President Trump in March 2017, the order generally aimed to establish a policy to promote domestic energy development and use, and ensure affordable and reliable electricity. To accomplish these broad goals, the order directed executive agencies to review their existing regulations and "appropriately suspend, revise, or rescind those that unduly burden" domestic energy production or use, "with particular attention to oil, natural gas, coal, and nuclear energy resources."¹¹⁰ The order also rescinded guidance intended to help federal agencies determine how and when to assess climate change effects and costs in rulemakings and environmental reviews. As directed by the order, the CEQ withdrew its 2016 guidance, Consideration of Greenhouse Gas Emissions and the Effects of Climate Change in National Environmental Policy Act Reviews. In June 2019, CEQ published draft NEPA guidance on consideration of greenhouse gas emissions intended to replace the 2016 guidance.¹¹¹

Being an independent agency, FERC was not subject to the executive order. Nonetheless, in November 2017, the commission voluntarily submitted a report reviewing FERC actions pursuant to the order, which, among other things, encompassed the commission's regulations, guidance documents, and policies related to pipeline certification and environmental review under NEPA.¹¹² The report concluded that "the majority of agency actions relating to the siting and construction of interstate natural gas transportation ... do not materially burden the transportation or delivery of domestically produced natural gas," and that there was "no need for the Commission to consider any revision to this regulation."¹¹³

Executive Order 13807

Issued by President Trump in August 2017, the order was intended "to ensure that the Federal environmental review and permitting process for infrastructure projects is coordinated, predictable, and transparent." The explicit goal of the order was to complete federal environmental reviews and permitting decisions for major projects within two years of application (§2(h)).¹¹⁴ A key component of E.O. 13807 was a "One Federal Decision" framework, whereby each "major" infrastructure project had one lead federal agency responsible for the overall permit process and issuing one Record of Decision, incorporating individual decisions from cooperating or participating agencies (§5(b)).

In April 2018, the FERC chairman signed a memorandum of understanding (MOU) with other federal agencies to implement E.O. 13807.¹¹⁵ Under the MOU, the agencies agree to "undertake to meet the goal set forth in E.O. 13807 of reducing the time to two years for each agency to complete all environmental reviews and authorization decisions for major infrastructure projects" through implementation of One Federal Decision, communication, concurrent reviews, adherence to a review timetable, and commitment to agency-specific and collective review process enhancements (§V). FERC already was the lead agency for pipeline certificate environmental review and had statutory authority to set a review timetable under EPAct, so it appears the impact of the MOU may have been primarily from cooperating agency coordination and setting the two-year goal. It is an open question how the MOU has affected FERC's ongoing review of pipeline certificate applications. Nonetheless, FERC stated at the time that it was "committed to carrying out the goals of Executive Order 13807 to improve the efficiency, timing, and overall predictability of the certification process."¹¹⁶

Executive Order 13868

Issued by President Trump in April 2019, the order stated that "outdated federal guidance and regulations regarding Section 401" of the Clean Water Act are "causing confusion and uncertainty and are hindering the development of energy infrastructure."¹¹⁷ Among other things, the order directed the Environmental Protection Agency (EPA) to review and issue new guidance to supersede the existing Section 401 guidance and to revise the agency's existing Section 401 implementing regulations. The order instructed EPA to focus on the need to promote timely federal-state cooperation, the appropriate scope of water quality reviews, the types of conditions that may be appropriate to include in a certification, expectations for review times for different types of certification requests, and the nature and scope of information states may need to act on a certification request. EPA subsequently issued revised Section 401 guidance and, in July 2020, a final water quality certification rule which replaced the prior implementing regulations.¹¹⁸ Although not directed at FERC, the EPA's guidance and rulemaking was intended, in part, to facilitate the state permitting of interstate natural gas pipelines also under FERC's NGA jurisdiction.

Executive Orders 13990, 13992, and 14008

President Biden has issued several executive orders that affect interstate natural gas pipeline siting. First, on January 20, 2021, the President issued E.O. 13990 asserting a policy to, among other things, "hold polluters accountable, including those who disproportionately harm communities of color and low-income communities; to reduce greenhouse gas emissions; to bolster resilience to the impacts of climate change; ... and to prioritize ... environmental justice."¹¹⁹ The order directs all executive departments and agencies to review and address the promulgation of regulations and other actions during the last four years that conflict with these objectives, "and to immediately commence work to confront the climate crisis."¹²⁰ This order also revokes Executive Orders 13766, 13783, 13807, and 13868.

On January 25, 2021, President Biden also issued E.O. 13992, which "revokes harmful policies and directives that threaten to frustrate the Federal Government's ability to confront ... problems" including the COVID-19 pandemic, economic recovery, racial justice, and climate change.¹²¹ The order revokes Executive Order 13777.

On January 27, 2021, President Biden issued E.O. 14008, which asserts an Administration policy "to organize and deploy the full capacity of its agencies to combat the climate crisis to implement a Government-wide approach that reduces climate pollution in every sector of the economy" and "delivers environmental justice," among other objectives.¹²² Although FERC, being an independent agency, is not directly subject to these executive orders, the commission stated in March 2021 that "there have been a series of recent administrative changes," specifically E.O. 13990 and E.O. 14008, "and we continue to evaluate their impact on our review process."¹²³

Legislative Proposals

Over the last 20 years, Congress has acted frequently to oversee FERC's certification of interstate natural gas pipelines through hearings and correspondence with the commission.¹²⁴ Members of Congress also have proposed legislation to change FERC's review of gas pipeline certificate applications, either specifically or as one category among a broader range of infrastructure projects. Proposals also have sought to change FERC's regulations with respect to certificates it has issued to pipeline developers.

Proposals in Prior Congresses

In the 111^th-116^th Congresses, bills which were not enacted sought to increase FERC public hearings, limit eminent domain authority, expand the scope of FERC's environmental review, require regional review of multiple projects, and impose specific deadlines on FERC and cooperating agencies, among other measures. Title 41 of the Fixing America's Surface Transportation Act (P.L. 114-94; FAST-41), which became law in December 2015, revised the process for federal approval of a range of major infrastructure projects by establishing best practices, requiring coordination of federal agency review of projects, and shortening the period for challenges to final decisions for issuing project permits. Infrastructure projects covered by the act are those requiring environmental review under NEPA and requiring investment exceeding $200 million (§41001).¹²⁵ As of May 2022, the permitting dashboard listed 10 projects involving natural gas pipelines (7 with completed permit reviews and 3 cancelled) covered under FAST-41 with FERC as the lead agency.¹²⁶ A summary table of the relevant legislative proposals in the 111^th-116^th Congresses is provided in the Appendix.

Legislative Proposals in the 117^th Congress

Some Members of Congress have introduced legislative proposals in the 117^th Congress involving FERC's certification authority or review process. Table 1 summarizes the key provisions in these bills related to natural gas pipeline certification. As the table shows, the proposals variously would require FERC to collectively review multiple pipelines proposed in the same region, hold more public meetings, restrict the use of eminent domain, meet shorter permit review deadlines, suspend proposed policy changes, and more broadly consider greenhouse gas emissions. Some would require environmental monitoring of completed pipelines and mandate greater cooperation and transparency of permit review by federal agencies.

FERC's Policy Review

As discussed earlier, FERC's review of pipeline certificate applications is guided by its Policy Statement on Certification of New Interstate Natural Gas Pipeline Facilities issued in 1999. In December 2017, the FERC chairman announced that the commission would undertake a review of its permitting policies and procedures for interstate natural gas pipelines. Accordingly, in April 2018, the commission issued an NOI "to examine its policies in light of changes in the natural gas industry and increased stakeholder interest in how it reviews natural gas pipeline proposals."¹²⁷ More specifically, the commission's notice posed "a range of questions that reflected concerns raised in numerous public comments, court proceedings and other forums," and sought input on "potential changes to both the existing Policy Statement and the structure and scope of the Commission's environmental analysis" as well as "feedback on the transparency, timing, and predictability of its certification process."¹²⁸

According to its notice, FERC's inquiry focused on four general aspects of its certificate application review, with specific questions posed under each aspect

• relying on precedent agreements to demonstrate project need,
• eminent domain and landowner interests,
• evaluating project alternatives and environmental effects, and
• the efficiency and effectiveness of FERC's certificate processes.¹²⁹

FERC's inquiry was opened for public comments through July 25, 2018.¹³⁰ However, according to the NOI, the commission intended to make no decisions on possible further action related to its inquiry until it had reviewed the comments filed; the commission did not state any timetable for completing this review.¹³¹ (FERC issued its 1999 policy statement over 13 months after publishing an NOI for that proceeding.¹³²) Through 2020, the commission took no further action related to the NOI.

Reopening the Policy Review

On January 21, 2021 President Biden appointed a new FERC chairman (elevating a commissioner who joined FERC in 2017).¹³³ The appointment followed the November 30, 2020, Senate confirmation of two new commissioners, restoring FERC to its full statutory complement of five commissioners.¹³⁴ On February 18, 2021, under its new chairman, FERC announced that it had "reopened" its review of the 1999 policy statement and published a new NOI "asking for new information and additional perspectives that would assist the Commission in moving forward with its review ... looking to build upon the record already established."¹³⁵ In the announcement, the FERC chairman stated "it's important to recognize that many changes have occurred since our initial inquiry three years ago." At an industry event, the FERC chairman subsequently stated "we have ... reinvigorated a proceeding that was begun many years ago," noting that "our whole process has come under some criticism—I've been critical of some aspects of it."¹³⁶

The 2021 NOI reaffirmed the commission's interest in the four general aspects of its certificate application review covered in its 2018 NOI, some with modification. It also posed new questions on an additional issue area examining FERC's "identification and addressing of any disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on environmental justice communities and the mitigation of those adverse impacts and burdens."¹³⁷ The NOI solicited new information and stakeholder perspectives related to the following five aspects of review, again, with specific questions posed under each aspect:

• potential adjustments to determination of need,
• eminent domain and landowner interests,
• consideration of environmental impacts,
• efficiency of the commission's review process, and
• consideration of effects on environmental justice communities.¹³⁸

The initial deadline for comments in the NOI was April 26, 2021, but it was subsequently extended to May 26, 2021.¹³⁹ The commission established no deadline for taking further actions with respect to the NOI, although the chairman stated, "I suspect we'll be able to act ..., hopefully soon on this gas pipeline certificate proceeding."¹⁴⁰ Any FERC pipeline certification activities or decisions in the meantime were to be made in accordance with the 1999 policy statement. Moreover, the FERC Chairman stated that "the Commission will not wait to act on Certificate applications while we consider options for improving the process."¹⁴¹ However, with the departure of a FERC commissioner in August 2021 (bringing the number of sitting commissioners down to four), some analysts suggested that FERC could be "deadlocked" on any proposed policy changes and so it was unlikely to finalize them without an additional voting member.¹⁴²

Issuance of New Policy Statements

On December 13, 2021, a new FERC commissioner appointed by President Biden was sworn in, restoring the commission to a full complement of five members.¹⁴³ Approximately two months later, FERC issued its two updated policy statements for the certification of interstate natural gas pipelines and infrastructure. As discussed above, the first policy statement established a new "analytical framework" for evaluating pipeline certificate applications, and the second established FERC's interim policy for examining the GHG impacts of and integrating climate considerations into pipeline certificate decisions.

The two policy statements were approved by a 3-2 vote. One commissioner dissented on the grounds that the statements, taken together, would

have profound implications for the ability of natural gas companies to secure capital, on the timelines for ... applications to be processed, and on the costs that a pipeline and its customers will bear as a result of the potentially unmeasurable mitigation that the majority expects each company to propose when filing its application and the possibility of further mitigation measures added unilaterally by the Commission.¹⁴⁴

Another commissioner dissented on the grounds that the changes in the new certificate policy would "exceed the Commission's legal authority under the NGA and NEPA," and would make it "even more costly and difficult to build the infrastructure that will be critically needed to maintain reliable power service to consumers as the generation mix changes to incorporate lower carbon-emitting resources."¹⁴⁵

Reaction and Reconsideration

Reaction in Congress to the new FERC policy statements was mixed. For example, at a March 3, 2022, hearing of the Senate Energy and Natural Resources Committee, both the chairman and ranking member were critical of the policy statements, with the chairman asserting that FERC was "setting in motion a process that will serve to further shut down the infrastructure we desperately need as a country and further politicize energy development."¹⁴⁶ However, other committee members were supportive of the policy statements, agreeing that they were required by the courts and characterizing them, for example, as "common sense regulation."¹⁴⁷ The chairman of the House Energy and Commerce Committee also expressed support for FERC's policies as "necessary and long-overdue actions" which were "consistent with ... court directives."¹⁴⁸

Reaction to FERC's new policy statements among key stakeholders was also mixed. One gas pipeline trade association objected to them on the grounds that the policy statements created additional uncertainty for pipeline developers, unfairly changed policies for pending permit applications, applied an arbitrary threshold in considering GHG emissions, was unclear about the nature of GHG mitigation requirements, and imposed such requirements outside of FERC's jurisdiction.¹⁴⁹ Other trade associations filed motions for rehearing, arguing among other things that FERC had overstepped its NGA authority, and that the commission's process for establishing its new policy statements was not transparent, lacking sufficient opportunity for stakeholder input.¹⁵⁰ Environmental groups, on the other hand, supported the policy statements, describing them, for example, as "sorely needed" and "putting in place a process that better reflects [FERC's] legal duties and restores balance to its reviews of new gas pipelines and affiliated infrastructure."¹⁵¹

In light of the reactions in Congress and among energy sector stakeholders, on March 24, 2022, FERC issued an order redesignating both of its both policy statements as drafts. According to the FERC chairman,

in light of concerns that the policy statements created further confusion about the Commission's approach to the siting of natural gas projects, the Commission decided it would be helpful to gather additional comments from all interested stakeholders, including suggestions for creating greater certainty, before implementing the new policy statements.¹⁵²

FERC's order invited additional comments by April 25, 2022 (and reply comments by May 25, 2022), but did not indicate when revised policy statements might be issued. The commission stated that the two draft policy statements would not apply to pending or new permit applications before the commission issues any final guidance. Because a FERC policy statement is a guidance document, not a regulation or statute, the commission has considerable discretion regarding if, when, and how it will apply any policy changes to pending certificate applications.¹⁵³

Policy Issues for Congress

Congress has been interested in the development of natural gas pipelines for decades, with a particular focus on siting and environmental impacts in recent years. Some in Congress generally see such pipeline development as positive, primarily due to its perceived economic benefits in terms of construction employment, lower natural gas prices, and environmental benefits relative to burning more carbon-intensive fossil fuels (i.e., coal). Others generally view gas pipeline development more critically, primarily due to environmental concerns from greenhouse gas emissions. Still others are focused primarily on the local effects of gas pipeline development related to public safety, the impacts on lands, the acquisition of private property through eminent domain, and impacts on environmental justice communities. The geopolitical importance of secure natural gas supplies to U.S. allies is yet another factor which has become important given the military conflict in Ukraine. Pipeline proponents would rather see more and faster pipeline development, whereas opponents would rather see less—preferring instead a greater policy emphasis on energy alternatives, such as renewable electricity generation, they view as more environmentally or socially benign.

Because FERC has the statutory authority to approve or deny certificates for interstate natural gas pipelines, the policy views above have led to persistent congressional scrutiny of FERC's pipeline certification process and decisions. Concerns about gas pipelines have motivated repeated attempts at congressional intervention. In total, over 40 bills have been introduced since the 111^th Congress (over a dozen in the 117^th Congress alone) which would affect various aspects of FERC's review of pipeline certificate applications. Of these, only the FAST Act (which seems to have applied to only a few of FERC's gas pipeline reviews) and the Consolidated Appropriations Act, 2021 became law. Therefore, absent any other statutory changes, Congress must rely on FERC to address policy concerns on its own volition in response to congressional oversight, federal court decisions, and public input.

FERC's ongoing proceedings regarding its pipeline certification policies cover a number of congressional concerns raised either in oversight hearings or bill provisions in the 117^th Congress. Examples include eminent domain authority (H.R. 2115), environmental justice (H.R. 516), determining market need (S. 1314), and natural gas exports (S. 655). Therefore, while FERC's policy review does not guarantee any particular changes to the gas pipeline certification status quo, it may provide valuable information and context for congressional oversight. If Congress disagrees with FERC's future policy choices based on the findings of its policy statement proceedings, those findings could provide an informed basis and clearer policy context for subsequent legislative proposals.

Although recent executive and agency actions, including FERC's agreements with other agencies and its policy review, may lead to changes in FERC policies or process, they may apply only to those aspects of gas pipeline regulation which fall directly within the commission's statutory authority under the Natural Gas Act or within its discretion under other federal statutes. This is a significant limitation because much of FERC's pipeline certificate review is environmental review in compliance with NEPA. While the bills identified in this report, and FERC's policy review, could change how FERC interprets or fulfills its obligations under NEPA, they would not amend NEPA itself. Likewise, they would not amend other federal statutes, such as the Clean Water Act or the Clean Air Act, which also may have a bearing on gas pipeline siting approval.

Appendix. Past FERC Permit Legislative Proposals