Page 5 - NorthAmOil Week 08 2022

NorthAmOil COMMENTARY NorthAmOil

proposes how to approach evidence of a project’s detrimental impact on infrastructure develop-
GHG emissions during the regulatory approval ment and energy security.
process. FERC is now seeking comment on the The Interstate Natural Gas Association of
Interim GHG Policy Statement. America’s (INGAA) president and CEO, Amy
Andryszak, said the new requirements would
Implications “add additional uncertainty to the already com-
Major pipeline projects whose fate is now less plex natural gas pipeline permitting process”,
certain as a result of the FERC certification and could cause “significant delays for much-
overhaul include the $6.2bn Mountain Valley needed infrastructure”.
pipeline. One of its owners, NextEra Energy, Industry groups were not the only ones crit-
has said it was evaluating its investment in the icising the plans, with the Wall Street Journal’s
project, having already also announced that it editorial board writing that restrictions on
would be taking an $800mn impairment related pipeline development in the US would play into
to the pipeline. Mountain Valley is nearly 94% Russian President Vladimir Putin’s hands, giv-
complete but has been held back by regulatory ing him more leverage over global energy sup-
and legal challenges, including having some of plies. Their comments came days before Putin
the permits for the project vacated by courts launched an attack on Ukraine, which will
– meaning those permit applications have to doubtless intensify calls in the US for higher
be reassessed. FERC’s new rules make it less domestic energy investment.
certain that the project will be able to clear the Republican lawmakers, as well as Democratic
final regulatory hurdles despite its closeness to US Senator for West Virginia Joe Manchin, FERC is now
completion. have also voiced their opposition to the FERC
Mountain Valley is one of several planned changes, accusing the regulator of overreach. seeking comment
projects at various stages of development that “The commission went too far by prioritis- on the Interim
faces additional obstacles thanks to the updated ing a political agenda over their main mission
FERC rules. Bloomberg cited examples last – ensuring our nation’s energy reliability and GHG Policy
week including Kinder Morgan’s $262mn security,” Manchin said. “The only thing they
expansion of its Evangeline Pass pipeline and accomplished … was constructing additional Statement.
Williams’ Regional Energy Access Project, as roadblocks that further delay building out the
well as expansions planned by Canadian firms energy infrastructure our country desperately
Enbridge and TC Energy. needs.”
The rule change would also have implications Given how costs escalate for a pipeline pro-
beyond the pipelines themselves, affecting pro- ject that runs into repeated delays, litigation and
jects that would be supplied by the pipelines. complex regulatory hurdles, the new rules look
Bloomberg cited Tellurian’s Driftwood LNG likely to disincentivise new investments. A num-
project as an example of this, as the pipelines ber of major gas pipeline projects have already
that would feed the terminal still require regu- been cancelled in recent years after becoming
latory approval. too costly and complicated for their operators
to keep pursuing them. This latest development
Reaction means operators may hold off on proposing new
The FERC changes have come under fire pipelines altogether, unless they can be certain
from industry groups, which warned of the of demonstrating the need for those projects.™

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