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New Regulations Could Lead To Even More Delays For Pipeline Operators

The U.S. Federal Energy Regulatory Commission (FERC) has issued a new final rule saying that an approved natural gas project cannot proceed with construction until the commission acts on all requests for rehearing—a new rule that is likely to delay the construction of natural gas pipelines and increase the costs for the project owners.

“Today’s rule states that even if a project has all other certifications and permissions to begin construction, it must wait to do so until the Commission either acts on the rehearing request or the 30-day time limit passes with no requests for rehearing,” FERC said in a statement this week.

Before this new final rule was issued, the commission used to allow pipeline projects to begin construction using federal eminent domain while landowners, community members, non-governmental organizations, or property rights advocates awaited FERC’s decisions on requests for rehearing.

“The Commission has undertaken a number of initiatives to improve affected landowners’ access to a fair and transparent process and today’s effort is another important step forward,” FERC Chairman Neil Chatterjee said in a statement.

“The Final Rule is likely to increase project costs for natural gas infrastructure by delaying their regulatory approvals,” Emily P. Mallen and Gregory M. Kusel with law firm Sidley Austin LLP wrote in a comment on the new rule.

According to analysts at ClearView Energy Partners LLC, cited by Reuters, FERC issued the final rule now as it likely expects a ruling against it in the Allegheny Defense Project v. FERC case, which remains pending on en banc review, and in which landowners appealed the construction of the now already operational Atlantic Sunrise natural gas pipeline of Williams Cos. FERC had granted Williams Cos eminent domain to build the pipeline despite the rehearing requests.

In another recent rule on pipelines, the U.S. Administration issued a final rule benefiting oil and gas companies by narrowing the scope of review for proposed oil and gas pipelines that states should consider under a section of the Clean Water Act for energy infrastructure.

By Tsvetana Paraskova for Oilprice.com

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