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Washington Watch: Key regulator makes concession for natural gas as Russia-sparked U.S. energy and climate concerns fester

As the U.S. and other Western nations consider the future of energy, climate change and Russia’s influence on global oil and gas markets, the Federal Energy Regulatory Commission (FERC) on Thursday changed the status of two recent policy statements on natural gas pipelines and infrastructure in a nod to the energy industry.

One energy and renewables industry lobbyist, Frank Maisano, principal with Bracewell LLP’s Policy Resolution Group, called the decision an “abrupt about-face.”

FERC voted unanimously to solicit input and consider changes to its revamped policy statements that brought additional climate and environmental justice scrutiny to new fossil fuel projects, and pushed back when such considerations will be put in motion, a mostly favorable change for the industry.

The five commissioners agreed that any changes that are ultimately made to its policy statements won’t be applied to projects already pending. FERC also approved three pending pipeline projects following months of industry and mostly Republican criticism that the agency has been slow to certify gas
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infrastructure.

The announcement to change the previous policy statements to drafts rather than final decisions also followed criticism from Senate Energy Committee Chair Joe Manchin, the West Virginia Democrat. He said emissions and other climate considerations were overreach for this agency.  Opponents introduced a bill Wednesday to stop the FERC moves from taking effect.

Although non-binding, the original policy statements, issued last month, could significantly change how natural gas pipelines are approved by the commission going forward. The commission would be required to determine whether a project is needed to meet the energy demands of a given region and whether it is in the public interest.

Read: Biden to resume federal oil and gas development under stricter rules as ‘social cost of carbon’ is battled in court

Environmentalists believe the criticisms of the policy were overblown and ignored what drove a rule rethink in the first place — that courts had routinely turned back FERC rulings because of broader impact, Moneen Nasmith, a senior attorney at Earthjustice, told Politico.

Pipelines and liquified natural gas facilities often release methane into the atmosphere due to some leakage at connection points, but usually due to accidents or during repairs and routine maintenance. Methane is about 80 times more potent than carbon dioxide emissions over a 20-year period and was made the target of intensified global attention at last year’s U.N. climate conference in Glasgow.

The American Gas Association said in response that “left unrevised, the 2022 policy statements will actively discourage the development of pipeline infrastructure, reduce reliability, raise consumer costs and create deep uncertainty that will destabilize the competitive markets.”

Sen. John Barrasso, the Republican serving energy state Wyoming and a ranking member on the Senate Energy panel, pushed for more.

“America and our allies need more, not less, natural gas and natural gas infrastructure,” he said in a statement. “President Biden and his appointees should be working to make it easier to develop and deliver this critical resource. FERC’s decision to step back from its destructive natural gas policy statements is a first step. FERC must go back to the drawing board and start over on these harmful proposals.”

This squabble comes as Russia’s invasion of Ukraine pushes on, drawing ever more sanctions on the aggressor and careful consideration of U.S. energy sources. For one, JPMorgan’s
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Jamie Dimon this week said a “Marshall Plan” is needed for energy, and the U.S. should keep up its gas role alongside cleaner energy options.

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