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New FERC Pipeline Rules Threaten America's Security

Recently, we alerted the industry that the Federal Energy Regulatory Commission (FERC) was issuing new rules that require natural gas pipeline developers, when applying for FERC approval, to estimate and mitigate the greenhouse gas emissions (GHG) that would result from upstream production or downstream use of the natural gas flowing through the line.

We argued that the new requirement was not only unreasonable, but impossible, and would only serve to give the Commission's majority a tool to arbitrarily deny pipeline project approvals on political or ideological grounds. We further stated that the upstream and downstream effects of a pipeline are beyond FERC's jurisdiction - which by law is limited to the GHG effects of construction and operation of the pipeline itself.

Also of great concern, FERC and the Department of Energy are currently sitting on numerous applications for development of U.S. LNG terminals and related export licenses, and for the pipelines to feed them with natural gas. The rules provide that FERC can retroactively apply these new criteria to applications that have already been submitted but not yet acted on.

Then Ukraine happened, and Russia's stranglehold on Europe's energy supplies took center stage. After aggressively eliminating coal and nuclear generation, Europe increased its reliance on Russian natural gas to make up the difference - now up to 40% of its supplies. Without access to alternatives, Europe remains at the mercy of a ruthless warmongering despot who continues to flow natural gas and oil to them only to gain the revenues needed for his war machine.

Europe is now trying to fill the void by importing more LNG from America and other friendly sources. But they are finding that there is little available as the U.S. and world's LNG export terminals are already operating at capacity.

Several proposed U.S. LNG export projects that would add significantly to our capacity are stalled by FERC inaction on their certificate applications, and Department of Energy inaction on their applications for export licenses. In this vein, the CEOs of four major pipeline operators (Williams, TC Energy, Enbridge, and Kinder Morgan) jointly sent a letter to FERC yesterday urging immediate action on pending applications, highlighted by the following:

"We urge the Commission to immediately certificate the natural gas infrastructure projects pending before it and move to simplify the approval process instead of introducing new ambiguities. Put simply, the Commission must consider the geopolitical realities facing the United States and its allies and do everything within its power to help the United States achieve energy security at home and global stability abroad. European dependence on Russian natural gas exports is undermining efforts to deter Russian aggression."

The letter was timed to arrive with the opening of a hearing yesterday on the FERC rules held by the Senate Committee on Energy and Natural Resources, chaired by Senator Joe Manchin (D-WV). Senator Manchin's opening statement, available here, is a powerful statement of the critical importance of America's natural gas resources and the risks that FERC's new policies are imposing on America's and the world's security during a time of exceptional vulnerability resulting from Putin's aggression in Europe.

We highly recommend your reading both documents and then sharing them with your colleagues and co-workers.

In the meantime, EEIA is communicating its concerns and recommendations to the Biden Administration and urging their immediate action to encourage FERC's facilitation of new LNG export facilities and the pipelines required to supply them with natural gas.

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