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    News

    Senate Energy Bill Unveiled, Like House Version Would Give Feds/FERC Clear LNG Decisionmaking Powers


    (May 23, 2005) -- In the wake of an April vote by the House of Representatives to give the Federal Energy Regulatory Commission (FERC) unambiguous federal authority in LNG safety and siting decisionmaking, the U.S. Senate's Energy & Natural Resources Committee today released its version of a major federal Energy bill, whose LNG section states in pertinent part:

    No facilities located onshore or in State waters for the import of natural gas from a foreign country, or the export of natural gas to a foreign country, shall be sited, constructed, expanded, or operated, unless the Commission has authorized such acts or operations...The Commission [FERC] shall have the exclusive authority to approve or deny an application for the siting, construction, expansion, or operation of facilities located onshore or in State waters for the import of natural gas from a foreign county or the export of natural gas to a foreign country.

    In connection with the preceding language, tje bill recites:

    Except as specifically provided in this part, nothing in this Act affects the rights of States under:
  • (1) the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et seq.)
  • (2) the Clean Air Act (42 U.S.C. 7401 et seq.); or
  • (3) the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.).
  • Regarding environmental review, the Senate language make unambiguous and expands federal LNG decisionmaking powers:

    With respect to an application for Federal authorization, the Commission [FERC] shall, unless the Commission orders otherwise, be the lead agency for purposes of complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).

    ...As lead agency, the Commission, in consultation with affected agencies, shall prepare a single environmental review document, which shall be used as a basis for all decisions under Federal law on (B) a certificate of public convenience and necessity under section 7.

    (c)(1) The Commission shall, in consultation with agencies responsible for Federal authorizations, and with due consideration of recommendations by the agencies, establish a schedule for all Federal authorizations.

    (2) In establishing a schedule, the Commission shall comply with applicable schedules established by Federal law.

    (3) All Federal and State agencies with jurisdiction over natural gas infrastructure shall seek to coordinate their proceedings within the timeframes established by the Commission with respect to an application for authorization under section 3 or a certificate of public convenience and necessity under section 7.

    And the bill specifies a role for the President of the United States on some appeals.

    ...In a case in which an administrative agency or officer has failed to act by the deadline established by the Commission under this section for deciding whether to issue the authorization, the applicant or any State in which the facility would be located may file an appeal with the President, who shall, in consultation with the affected agency, take action on the pending application.

    (2) Based on the overall record and in consultation with the affected agency, the President may:

    (A) issue the necessary authorization with any appropriate conditions; or

    (B) deny the application.

    (3) Not later than 90 days after the filing of an appeal, the President shall issue a decision as to that appeal.

    (4) In making a decision under this paragraph, the President shall comply with applicable requirements of Federal law, including:

    (A) the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.)

  • (B) the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.);
  • (C) the National Forest Management Act of 1976 (16 U.S.C. 472a et seq.);
  • (D) the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.);
  • (E) the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1701 et seq.);
  • (F) the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et seq.); and (G) the Clean Air Act (42 U.S.C. 7401 et seq.)..
  • Appeals of FERC LNG decisions could be filed exclusively in DC Circuit federal Court of Appeal.

    Initial Reaction

    After a quick read of the 116 pages of the full Gas section, LB City Attorney Bob Shannon offered some initial impressions to LBReport.com. City Attorney Shannon said in his view, the real significance of the bill lies in bringing LNG decisionmaking clearly within the terms of the federal Natural Gas Act. That's important, Mr. Shannon said, because multiple U.S. Supreme Court decisions have given federal authorities (i.e. FERC) extremely broad powers under that Act.

    In other words, despite bill verbiage about coordinating and consulting with state agencies, the legislation would basically empower the feds to make the call on siting and safety decisions. "At the end of the day, if this passes, the federal government will effectively get preemptive authority over siting, safety and permiting these LNG plants," City Attorney Shannon said.

    City Attorney Shannon also pointed to FERC's own statements in a June 2004 rehearing on the LB LNG proposal...which indicate how the agency views its powers under the Natural Gas Act:

    As part of its ruling, FERC said:

    In issuing NGA [Natural Gas Act] authorizations, we routinely cite Schneidewind v. ANR Pipeline Company, 485 U.S. 293 (1988) [a U.S. Supreme Court case], and include the following proviso: "Any state or local permits issued with respect to the jurisdictional facilities authorized herein must be consistent with the conditions of this certificate. The Commission encourages cooperation between interstate pipelines and local authorities. However, this does not mean that state and local agencies, through application of state or local laws, may prohibit or unreasonably delay the construction of facilities approved by this Commission." [Source: Order Denying Rehearing, Denying Requests for Stay, and Clarifying Prior Order, Sound Energy Solutions, Docket No. CP04-58-001, 107 FERC 61,623 at footnote 6 (June 9, 2004).]

    City Attorney Shannon said that in LB's case, the landlord for the proposed site is the Port of LB...and (absent eminent domain, not in the bill) LB's Harbor Commissioners (Mayor appointed, Council approved) have the inherent power as landlord over the Port site to say "yes" or "no" to the proposed LNG facility.


    Related story:

  • Sen. Feinstein Introduces Bill To Preserve State LNG Decisionmaking Powers

  • LBReport.com maintains a compilation of our LNG coverage. To view it, click here.


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