NorthAmOil: FERC approves gas pipeline certification shake-up

The US Federal Energy Regulatory Commission (FERC) has agreed to overhaul the certification process for new natural gas pipeline projects.
The commission voted for changes that would result in greater scrutiny of the economic need for new projects, as well as their environmental and local impacts. The new standards will apply to pending projects as well as future ones, potentially complicating the way forward for billions of dollars’ worth of proposed gas infrastructure investments. According to Bloomberg, nearly 13bn cubic feet (368mn cubic metres) of new gas capacity could be subject to the changes.
This would have implications beyond the pipelines themselves, also affected projects that would be supplied by the pipelines. Bloomberg cited Tellurian’s Driftwood LNG project as an example of this, as the pipelines that would feed the terminal still require regulatory approval.
Major pipeline projects whose fate is now less certain as a result of the FERC overhaul include the $6.2bn Mountain Valley pipeline. One of its owners, NextEra Energy, has said it was evaluating its investment in the project, having already also announced that it would be taking an $800mn impairment related to the project. The pipeline is nearly 94% complete, but has been held back by regulatory and legal challenges, and FERC’s new rules make its completion even less certain.
The FERC changes have come under fire from industry groups, which warned of the detrimental impact on infrastructure development and energy security. They were not the only ones criticising the plans, with the Wall Street Journal’s editorial board writing that restrictions on pipeline development in the US would play into Russian President Vladimir Putin’s hands, giving him more leverage over global energy supplies.