General Counsel Report

APGA's General Counsel, John Gregg of McCarter & English, prepares this weekly report to highlight the industry news for public natural gas professionals.

April 25, 2019

Chatterjee Gets Major LNG Export Projects Approved While Activists Protest
By 3-1 votes, FERC issued certificates to the Driftwood LNG and Pipeline projects, and the Port Arthur LNG and Pipeline projects. Driftwood LNG Project would export an estimated 27.6 million metric tons of liquefied natural gas per year from Calcasieu Parish, Lousiana. Port Arthur Liquefaction would have a total production capacity of an estimated 13.5 million metric tons per year and would be located at the site of a previously approved but unbuilt import terminal in the vicinity of Port Arthur, Texas. The Port Arthur Pipeline Projects would consist of two pipelines – the 130.9-mile Louisiana Connector Project and the 34.2-mile Texas Connector Pipeline, each with a capacity to transport up to 2 Bcf of gas per day to feed the LNG facilities. There are currently 10 LNG export projects pending at the Commission. The Commission approved Venture Global Calcasieu Pass, LLC in February.

Protestors disrupted the FERC meeting several times while some protested outside the building. "The United States wants clean energy and you are preventing it," "The United States wants clean energy and you are preventing it," a protestor yelled at FERC regulators before being escorted from the room. FERC Chairman Neil Chatterjee said he sympathized with the protesters’ climate concerns but that LNG exports provide net environmental benefits.

Recognizing that she was the swing vote, in a concurrence Commissioner Cheryl LaFleur observed that DOE and not FERC had the responsibility to assess upstream and downstream indirect GHG emission impacts of LNG exports as part of the DOE’s determination of the public interest in exporting the natural gas. FERC has responsibility to disclose and consider the direct and cumulative GHG impacts of the proposed LNG export facility. She made that estimate and disclosed the GHG emissions, because Chairman Neil Chatterjee has determined that FERC need not do that, and LeFleur found the project in the public convenience and necessity. This prompted a dissent from Commissioner Glick, who said that FERC is “refusing to consider the consequences its actions have for climate change. Neither the NGA nor NEPA permit the Commission to assume away the climate change implications of constructing and operating this liquefied natural gas (LNG) facility.” He concluded that “a thorough investigation of a project’s contribution to climate change would also help infrastructure developers by reducing their legal risk in the appeals that will inevitably follow. At the end of the day, no one benefits from the Commission’s refusal to consider a project’s impact on climate change.”

“Federal Renewable Energy Commission”
At dawn before the recent FERC Open Meeting, activists from Beyond Extreme Energy climbed the overhang about 25 feet above FERC’s entrance to unveil a banner announcing their new campaign to remake FERC as the “Federal Renewable Energy Commission.” The banner read “Federal Energy Regulatory Commission No!, Federal Renewable Energy Commission Yes!” and tied to their new website, frecnotferc.com, that features a mock version of the agency’s homepage, and called for a revamped commission that would prioritize growth of renewable energy and replace the “fossil-fuel-industry dominated FERC” with a new agency committed to leading the rapid transition of the US energy system. There were no arrests.

FERC Denies Rehearing of Tax Orders in Order No. 849-A
FERC has denied all arguments for rehearing of its final rule issued last year that launched the filing of Form 501-Gs. The requests of pipelines and shippers alike were dispensed. Pipelines had argued that the form was so specific it was tantamount to compelling them to file a Section 4 rate case. End users challenged FERC’s policy on accumulated deferred income taxes. FERC refused to change any aspect of Order No. 849.

Enable Files for Bypass that Would Create a Muni Distributor in Oklahoma
Enable Gas Transmission has filed a prior notice application to construct facilities that would bypass Arkansas Oklahoma Gas (AOG) Corporation in Sequoyah County, Oklahoma. A new tap setting and appurtenant facilities to accommodate 6,000 dt/day at a cost of $325,000 would provide service to Roland Development Authority. The Town of Roland seeks to create its own municipal gas system after 50 years of service from the large LDC. Roland says that the infrastructure that exists in the Town consists of outdated lines and equipment. “In addition, the rates being charged by AOG are among the highest in the State of Oklahoma. AOG had allowed their franchise agreement with the Town of Roland expire, and so the Town of Roland has the opportunity to develop a new gas system with the new lines and meters that will be placed at buildings in accordance with new industry standards.”


View past reports here.