Neil J. Chatterjee, current Chairman of the Federal Energy Regulatory Commission (FERC), last week, stated he does not believe it is the agency’s responsibility or capability to question an applicant company’s claim that it needs to build a new pipeline. In an October 17 address before the Federal Energy Bar in Washington, DC, Chairman Chatterjee set forth as his most important priority the streamlining of FERC’s regulatory process:
“The FERC review process continues to get longer and longer due in large part to increased participation in the process by stakeholders, including numerous legal challenges.
“I anticipate that a flashpoint for many of those legal challenges will be the question of economic need for a new natural gas pipeline project.
“The dissents to Friday’s decisions approving the Atlantic Coast and MVP pipeline projects suggested that FERC should depart from its longstanding policy of relying on precedent agreements with shippers to demonstrate economic need in favor of weighing a broad range of economic, social and aesthetic values. Although I respect my colleague’s position on this question, I strongly disagree.
“The Commission has historically prioritized precedent agreements in its analysis because those are clear, unequivocal statements of economic need by the market itself. The companies who are willing to enter into contracts to pay for transportation on the service on a pipeline have a much clearer understanding of the market need for the gas than we could develop through studies here in D.C. (emphasis added)
“The regulatory uncertainty created by burdensome delays in the project review process are problematic for numerous reasons for those on both sides of the issue.
For more on the Chatterjee remarks, see the Recorder story below in In the News, “Pipeline opponents argue agency’s bias to industry unfair.”