Approvals Required for Interstate Pipelines Subject of Circuit Court Appeals
The fast-paced growth of natural gas production in the Marcellus Shale region, coupled with increased demand for the abundant and relatively inexpensive gas, has led several interstate natural gas pipeline companies to petition the Federal Energy Regulatory Commission (FERC) for approval to expand or construct new pipeline facilities to transport Marcellus gas to markets in the Northeast United States.
August 17, 2017 at 04:45 PM
7 minute read
The fast-paced growth of natural gas production in the Marcellus Shale region, coupled with increased demand for the abundant and relatively inexpensive gas, has led several interstate natural gas pipeline companies to petition the Federal Energy Regulatory Commission (FERC) for approval to expand or construct new pipeline facilities to transport Marcellus gas to markets in the Northeast United States.
However, despite the fact that the Natural Gas Act vests FERC with exclusive authority over regulating the sale and transportation of natural gas in interstate commerce, states play a vital role in reviewing and approving such interstate pipeline projects under the Clean Water Act. The Clean Air Act and Coastal Zone Management Act also reserve a role for state review within the Natural Gas Act framework (see 15 U.S.C. Section 717b(d)). These state approvals, necessary to begin construction, have become an increasingly contentious issue and a flashpoint for opposition to pipeline projects.
The pipeline approval process generally begins with an application to FERC for a certificate of public convenience and necessity (certificate)—no company or person is permitted to construct or expand any interstate natural gas facilities without first obtaining a certificate. FERC is not only responsible for reviewing certificate applications, but also administers the environmental review process pursuant to the National Environmental Policy Act (NEPA).
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