FERC proposes faster LNG approvals, restructures pipeline air reviews

By Daniel Okafor

FERC has issued a proposed rule to accelerate approvals of new liquefied natural gas export terminals and to restructure how interstate gas pipelines undergo federal air-quality reviews. The Commission's draft, reported this week by Oil & Gas Journal, has not yet appeared in the Federal Register. Operators have asked for some version of this for years.

The Federal Energy Regulatory Commission authorises siting for LNG terminals under the Natural Gas Act and grants certificates for new interstate gas pipelines. FERC staff also coordinate air-permit reviews with the Environmental Protection Agency under the Clean Air Act. Industry operators have argued for years that the dual-track process adds months to project schedules. The wait has become its own kind of permitting tax.

What does the proposal change?

The Commission's draft addresses two bottlenecks at once. It targets the wait for an LNG terminal order. It also targets the time required to clear a pipeline air permit. FERC aims to fold air-permit reviews into its existing National Environmental Policy Act review work, treating the two processes as a single proceeding rather than parallel ones.

The proposal lands in a market where US LNG exports have grown steadily since the first cargoes left Sabine Pass in 2016. Developers have queued additional projects along the Gulf Coast and on the Atlantic seaboard, with several in pre-filing status. Trade groups have lobbied for years to consolidate the two processes, and the Commission's draft appears to take that step in a measured way. The EPA remains in a coordinating role. That is the practical takeaway.

Why the timing matters

US LNG export capacity has expanded under Henry Hub-linked long-term contracts and merchant offtake. The Department of Energy continues to handle export-licence policy. FERC handles the siting and operational review of the liquefaction facility itself, which is where the queue forms.

Industry counsel had argued that the LNG siting review had grown longer than Congress intended when it amended the Natural Gas Act. FERC appears to have accepted some version of that argument, and the proposed rule adjusts pre-filing and application procedures in ways the trade press will scrutinise once the Federal Register text appears in print. Environmental counsel will read it just as carefully, looking for changes that could affect public-health safeguards. The text will speak for itself.

What the air-review change does in practice

Pipeline sponsors currently file for authorisation under Section 7 of the Natural Gas Act and for an air permit under the Clean Air Act. Each review has its own application, comment period and decision document. Engineers prepare separate technical exhibits. Consultants prepare separate emissions inventories. FERC staff are proposing a unified approach that keeps the Commission in the lead role and places the EPA in a coordinating role, treating the air permit as part of the broader environmental review rather than a parallel track. That is the operational change. Industry counsel will read it closely.

The Commission's draft also adjusts how FERC scopes its environmental impact statements for compressor stations, meter stations and related pipeline facilities. Engineers and operators have flagged redundant permit work on uncontested projects. The proposal is a partial answer to that complaint, leaving the more contested policy questions for another rulemaking. The text will tell.

The watch item

FERC has not yet published the proposed rule in the Federal Register. Comment periods on energy rulemakings typically run forty-five to sixty days. Operators and counsel on both sides should treat the next filing window as the calendar that matters. The text is the only fact that counts. Any early comment should wait for the filing.