Report text available as:

  • TXT
  • PDF   (PDF provides a complete and accurate display of this text.) Tip ?

115th Congress    }                                          {   Report
                         HOUSE OF REPRESENTATIVES
 1st Session      }                                          {  115-223

======================================================================



 
PROMOTING INTERAGENCY COORDINATION FOR REVIEW OF NATURAL GAS PIPELINES 
                                  ACT

                                _______
                                

 July 17, 2017.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Walden, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 2910]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 2910) to provide for Federal and State agency 
coordination in the approval of certain authorizations under 
the Natural Gas Act, and for other purposes, having considered 
the same, report favorably thereon without amendment and 
recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Committee Action.................................................     3
Committee Votes..................................................     4
Oversight Findings and Recommendations...........................     9
New Budget Authority, Entitlement Authority, and Tax Expenditures     9
Congressional Budget Office Estimate.............................     9
Federal Mandates Statement.......................................    10
Statement of General Performance Goals and Objectives............    10
Duplication of Federal Programs..................................    10
Committee Cost Estimate..........................................    10
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......    10
Disclosure of Directed Rule Makings..............................    10
Advisory Committee Statement.....................................    10
Applicability to Legislative Branch..............................    11
Section-by-Section Analysis of the Legislation...................    11
Exchange of Letters with Additional Committees of Referral.......    14
Dissenting Views.................................................    16

                          PURPOSE AND SUMMARY

    H.R. 2910, the ``Promoting Interagency Coordination for 
Review of Natural Gas Pipelines Act,'' was introduced by 
Representative Flores (R-TX) on June 15, 2017. The legislation 
would help address the critical need to expand and modernize 
the nation's natural gas pipeline infrastructure by promoting 
more timely and efficient reviews.

                  BACKGROUND AND NEED FOR LEGISLATION

    The Federal Energy Regulatory Commission (FERC) is the 
principal Federal agency involved in the review of interstate 
natural gas pipelines. FERC has exclusive authority under 
section 7 of the Natural Gas Act (NGA) to review and grant the 
certificate of public convenience and necessity required to 
construct a new or expanded interstate natural gas pipeline. 
FERC conducts the environmental review of each proposed natural 
gas pipeline project as required under the National 
Environmental Policy Act (NEPA). Under the Energy Policy Act of 
2005 (EPAct), FERC is designated as the lead agency for 
coordinating necessary environmental reviews and associated 
Federal authorizations. As the lead agency, FERC often 
coordinates with a variety of Federal, State, and local 
governments and Indian tribes to balance a wide range of 
issues, including potential impacts on environmental and 
wildlife resources, land-use, and property rights.
    Multiple permits are often required for a natural gas 
pipeline project, including permits under the Clean Water Act, 
Endangered Species Act, and Clean Air Act. Under current FERC 
regulations, Federal and State agencies participate in the 
development of the NEPA analysis for a pipeline project and 
then are required to complete their respective permit 
application reviews no later than 90 days after FERC issues its 
final environmental document, unless another schedule is 
established by Federal law.\1\
---------------------------------------------------------------------------
    \1\18 C.F.R. Sec.  157.22
---------------------------------------------------------------------------
    Despite the increased authority given to FERC under EPAct, 
there is growing evidence that pipeline infrastructure 
approvals are being delayed unnecessarily due to a lack of 
coordination or insufficient action among agencies involved in 
the permitting process. A December 2012 study conducted by the 
INGAA Foundation found that since the enactment of EPAct's 
permitting reforms, the occurrence of Federal authorization 
delays exceeding 90 days has risen from 8 percent to 28 
percent, while delays exceeding 180 days have risen from 3 
percent to 20 percent.\2\ A February 2013 GAO report discussed 
the complexities of interstate pipeline permitting and 
described the various groups of stakeholders and permitting 
steps.\3\ While FERC has established a pre-filing phase to 
facilitate and expedite the review, some agencies and States do 
not fully participate in the process, leading to delays. 
Testimony before the Subcommittee on Energy has shown that the 
lack of coordination among Federal and State regulators is 
having a negative impact on infrastructure modernization, job 
creation, and economic growth.\4\
---------------------------------------------------------------------------
    \2\INGAA Foundation, Expedited Federal Authorization of Interstate 
Natural Gas Pipelines: Are Agencies Complying with EPAct?, December 21, 
2012.
    \3\Government Accountability Office, Interstate and Intrastate 
Natural Gas Permitting Processes Include Multiple Steps, and Time 
Frames Vary, February 2013.
    \4\See hearing entitled ``Modernizing Energy and Electricity 
Delivery Systems: Challenges and Opportunities to Promote 
Infrastructure Improvement and Expansion'' held on February 15, 2017.
---------------------------------------------------------------------------
    H.R. 2910 would improve the permitting process by 
strengthening the lead agency role of FERC and further defining 
the process for participating Federal and State agencies. The 
intent of these provisions is to involve stakeholders sooner so 
that they can be involved in the setting of the schedule and 
identify issues of concern earlier in the process. The 
legislation would require agencies that may consider an aspect 
of an application to participate in the review process and 
comply with the schedules established by FERC. The legislation 
requires that agencies conduct their respective reviews 
concurrently, and in conjunction with, the project-related 
review conducted by FERC in compliance with NEPA. In 
considering an aspect of an application, Federal and State 
agencies may accept remote aerial survey data and use that data 
to grant conditional approvals, conditioned on the onsite 
inspection. Remote aerial surveys are a widely accepted, proven 
method of collecting environmental data, and allowing their use 
will lead to better, more informed decisions. H.R. 2910 would 
increase public accountability, transparency, and efficiency by 
requiring FERC to publish the schedule, a list of all actions 
required by each applicable agency, and the status of all 
pending actions.

                            COMMITTEE ACTION

    On May 3, 2017, the Subcommittee on Energy held a 
legislative hearing on discussion draft entitled ``Promoting 
Interagency Coordination for Review of Natural Gas Pipelines 
Act.'' The Subcommittee received testimony from:
       Terry Turpin, Director, Office of Energy 
Projects, Federal Energy Regulatory Commission;
       John Katz, Deputy Associate General Counsel, 
Office of the General Counsel, Federal Energy Regulatory 
Commission;
       Jeffrey Leahey, Deputy Executive Director, 
National Hydropower Association;
       Donald Santa, President and CEO, Interstate 
Natural Gas Association of America;
       Andy Black, President and CEO, Association of 
Oil Pipe Lines;
       Jeffrey Soth, Legislative and Political 
Director, International Union of Operating Engineers;
       Bob Irvin, President and CEO, American Rivers; 
and,
       Jennifer Danis, Senior Staff Attorney, Eastern 
Environmental Law Center.
    On June 22, 2017, the Subcommittee on Energy met in open 
markup session and forwarded H.R. 2910, without amendment, to 
the full Committee by a record vote of 17 yeas and 14 nays. On 
June 28, 2017, the full Committee on Energy and Commerce met in 
open markup session and ordered H.R. 2910, without amendment, 
favorably reported to the House by a record vote of 30 yeas and 
23 nays.

                            COMMITTEE VOTES

    Clause 3(b) of rule XIII requires the Committee to list the 
record votes on the motion to report legislation and amendments 
thereto. The following reflects the record votes taken during 
the Committee consideration:


                 OVERSIGHT FINDINGS AND RECOMMENDATIONS

    Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII, the Committee held a hearing and made findings that 
are reflected in this report.

   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    Pursuant to clause 3(c)(2) of rule XIII, the Committee 
finds that H.R. 2910 would result in no new or increased budget 
authority, entitlement authority, or tax expenditures or 
revenues.

                  CONGRESSIONAL BUDGET OFFICE ESTIMATE

    Pursuant to clause 3(c)(3) of rule XIII, the following is 
the cost estimate provided by the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 14, 2017.
Hon. Greg Walden,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2910, the 
Promoting Interagency Coordination for Review of Natural Gas 
Pipelines Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Megan 
Carroll.
            Sincerely,
                                             Mark P. Hadley
                                                  (For Keith Hall).
    Enclosure.

H.R. 2910--Promoting Interagency Coordination for Review of Natural Gas 
        Pipelines Act

    Under the Natural Gas Act, the Federal Energy Regulatory 
Commission (FERC) is the lead federal agency involved in 
approving and regulating interstate pipelines that carry 
natural gas. Such projects are subject to a variety of federal 
and nonfederal permits and authorizations related to a range of 
issues, particularly environmental matters. Under current law, 
FERC coordinates those efforts and is ultimately responsible 
for granting the certificate of public convenience and 
necessity required to construct or expand interstate natural 
gas pipelines.
    H.R. 2910 would specify timeframes and procedures for FERC 
and other affected agencies to follow in conducting 
environmental reviews related to natural gas pipelines. Based 
on information from FERC and other federal agencies that 
regulate aspects of interstate natural gas pipelines, CBO 
estimates that implementing the bill would have no significant 
net effect on the federal budget. The bill would not affect the 
scope of federal agencies' responsibilities in overseeing such 
pipelines, and CBO expects that meeting the timeframes 
specified in the bill would not require a significant change in 
the level of discretionary funding provided to those agencies. 
Further, because FERC recovers 100 percent of its costs through 
user fees, any change in that agency's costs (which are 
controlled through annual appropriation acts) would be offset 
by an equal change in fees that the commission charges, 
resulting in no net change in federal spending.
    Enacting H.R. 2910 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply. CBO 
estimates that enacting H.R. 2910 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2028.
    H.R. 2910 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Megan Carroll. 
The estimate was approved by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

         STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    Pursuant to clause 3(c)(4) of rule XIII, the general 
performance goal or objective of this legislation is to promote 
more timely and efficient reviews of pipeline certificate 
applications.

                    DUPLICATION OF FEDERAL PROGRAMS

    Pursuant to clause 3(c)(5) of rule XIII, no provision of 
H.R. 2910 is known to be duplicative of another Federal 
program, including any program that was included in a report to 
Congress pursuant to section 21 of Public Law 111-139 or the 
most recent Catalog of Federal Domestic Assistance.

                        COMMITTEE COST ESTIMATE

    Pursuant to clause 3(d)(1) of rule XIII, the Committee 
adopts as its own the cost estimate prepared by the Director of 
the Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974.

       EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

    Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the 
Committee finds that H.R. 2910 contains no earmarks, limited 
tax benefits, or limited tariff benefits.

                  DISCLOSURE OF DIRECTED RULE MAKINGS

    Pursuant to section 3(i) of H. Res. 5, the Committee finds 
that H.R. 2910 contains no directed rule makings.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title

    This section provides the short title, the ``Promoting 
Interagency Coordination for Review of Natural Gas Pipelines 
Act.''

Section 2. FERC process coordination for natural gas pipeline projects

    Section 2(a) provides definitions for terms used throughout 
this section.
    Section 2(b) designates FERC as the only lead agency for 
the purposes of complying with the National Environmental 
Policy Act for an authorization under section 3 of the NGA or a 
certificate of public convenience and necessity under section 7 
of the NGA. This section requires FERC to coordinate as early 
as practicable with each agency designated as a participating 
agency under subsection (d)(3) and to take such actions as 
necessary and proper to facilitate the expeditious resolution 
of its project-related NEPA review.
    Section 2(c) directs each agency to give deference, to the 
maximum extent authorized by law, to the scope of the project-
related NEPA review that FERC determines to be appropriate, 
when making a decision with respect to a Federal authorization 
under section 3 of the NGA or a certificate of public 
convenience and necessity under section 7 of the NGA.
    Section 2(d)(1) requires FERC to identify as early as 
practicable, after it is notified by a person applying for an 
authorization under section 3 of the NGA or a certificate of 
public convenience and necessity under section 7 of the NGA, 
any Federal or State agency, local government, or Indian Tribe 
that may issue a Federal authorization or is required by 
Federal law to consult with FERC on the issuance of a Federal 
authorization.
    Section 2(d)(2) requires FERC to invite the identified 
agencies to participate in the review process for the 
applicable Federal authorization. The invitation shall 
establish a deadline for when the agency must submit a response 
to FERC. FERC may extended the deadline for good cause.
    Section 2(d)(3) requires FERC to designate identified 
agencies as participating agencies with respect to an 
application for authorization under section 3 of the NGA or a 
certificate of public convenience and necessity under section 7 
of the NGA, unless the agency informs FERC, in writing, that 
the agency does not have jurisdiction over the application, has 
no special expertise relevant to the NEPA review, and does not 
intend to submit comments for the record for the NEPA review 
conducted by FERC.
    Section 2(d)(4) provides that any agency not designated as 
a participating agency may not request or conduct a NEPA review 
that is supplemental to FERC's project-related NEPA review, 
unless the agency (1) demonstrates that such review is legally 
necessary or (2) requires information that could not have been 
obtained during FERC's project-related NEPA review. 
Additionally, it directs FERC not to consider any comments or 
other information submitted by an agency that is not designated 
as a participating agency for FERC's project-related NEPA 
review and not to include any comments in the record for the 
Commission's NEPA review from an agency that is not designated 
as a participating agency.
    Section 2(e)(1) directs the Commission not to establish a 
deadline for a Federal authorization exceeding 90 days after 
the Commission completes its project-related NEPA review.
    Section 2(e)(2) directs each Federal and State agency 
considering a Federal authorization for an application or an 
aspect of an application under section 3 of the NGA or a 
certificate of public convenience and necessity under section 7 
of NGA to formulate and implement a plan to ensure completion 
of Federal authorizations in compliance with schedules 
established by FERC. When considering an aspect of an 
application for a Federal authorization, each Federal and State 
agency shall carry out the obligations of that agency under 
applicable law concurrently with FERC's project-related NEPA 
review, and in compliance with FERC's established schedule, 
unless the agency notifies FERC in writing that doing so would 
impair the ability of the agency to conduct needed analysis or 
otherwise carry out the agency's obligations. Each Federal and 
State agency considering an aspect of a Federal authorization 
shall transmit to FERC a statement acknowledging receipt of the 
schedule established by FERC. The statement shall also contain 
the plan formulated to ensure completion of the Federal 
authorizations in compliance with FERC's schedule. Not later 
than 30 days after the agency receives an application for a 
Federal authorization under section 3 of the NGA or a 
certificate of public convenience and necessity under section 7 
the NGA, a Federal or State agency shall transmit to the 
applicant a notice indicating whether the application is ready 
for processing. If the application is not ready for processing, 
the agency shall provide a comprehensive description to the 
applicant of the information needed for the agency to determine 
that the application is ready for processing. Each Federal and 
State agency shall transmit to FERC a report once every 90 days 
describing the progress made in considering an application.
    Section 2(e)(3) specifies that if a Federal or State agency 
fails to meet a deadline for a Federal authorization set forth 
in FERC's schedule, the head of the relevant Federal agency 
shall notify Congress and FERC of such failure and set forth a 
recommended implementation plan to ensure completion of the 
action.
    Section 2(f)(1) directs Federal and State agencies 
considering an aspect of an application for a Federal 
authorization to identify any issues of concern that may delay 
or prevent an agency from working with FERC to resolve the 
identified issues and grant the authorization. FERC may forward 
any identified issue of concern to the heads of relevant 
agencies for resolution.
    Section 2(f)(2) instructs Federal or State agencies 
considering an aspect of an application for a Federal 
authorization to consider any data gathered by aerial or other 
remote means submitted by the applicant. The agency may grant a 
conditional approval for the Federal authorization based on 
data gathered by aerial or remote means, conditioned on the 
verification of such data by subsequent onsite inspection.
    Section 2(f)(3) specifies that FERC, and Federal and State 
agencies, may allow a person applying for a Federal 
authorization to fund a third-party contractor to assist in 
reviewing an application.
    Section 2(g) directs FERC, with input from any Federal or 
State agency considering an aspect of an application, to track 
and make available to the public on the Commission's website 
information related to the actions required to complete a 
Federal authorization.



                            DISSENTING VIEWS

    H.R. 2910, introduced on June 15, 2017 by Rep. Bill Flores 
(R-TX), is almost entirely different from the draft legislation 
that was the subject of the May 3, 2017 legislative hearing on 
this subject. Proponents argue the purpose of the bill is to 
streamline the Federal Energy Regulatory Commission (FERC) 
process for approving natural gas pipelines by increasing 
transparency, predictability, accountability, and timeliness. 
However, these concerns are already being addressed by the 
Federal Permitting Improvement Steering Council (FPISC), 
established in 2015 through Title 41 of the Fixing America's 
Surface Transportation (FAST) Act.\1\ This council is currently 
overseeing and coordinating the permitting process for 32 major 
infrastructure projects, including seven interstate natural gas 
pipelines.
---------------------------------------------------------------------------
    \1\P.L. 114-94.
---------------------------------------------------------------------------
    The siting of natural gas pipelines is often controversial 
and requires detailed regulatory scrutiny by FERC. At the 
legislative hearing, FERC's Director of the Office of Energy 
Projects, Terry L. Turpin, noted that ``on average it is 88 
percent of the projects get issued within one year'' and the 
single greatest factor in slowing down an application was the 
license applicant failing to provide FERC and other agencies 
with ``timely and complete information necessary to perform 
Congressionally-mandated project reviews.''\2\
---------------------------------------------------------------------------
    \2\House Committee on Energy and Commerce, transcript not 
published, Hearing on ``Legislation Addressing Pipeline and Hydropower 
Infrastructure Modernization,'' Testimony of Terry Turpin, Director, 
Office of Energy Projects, Federal Energy Regulatory Commission, 115th 
Cong. (May 3, 2017).
---------------------------------------------------------------------------
    H.R. 2910 does not address any of the concerns raised by 
FERC at the legislative hearing. Instead, H.R. 2910 indirectly 
attempts to rewrite key aspects of sections 3, 7 and 15 of the 
Natural Gas Act (NGA). Among other things, the bill would 
require FERC to establish a schedule with deadlines for 
submission of information from other federal or state agencies, 
local governments or Indian tribes for a natural gas pipeline 
or liquefied natural gas project requiring FERC approval. 
Concurrent reviews by these federal or state agencies would be 
required, based on the scope of environmental review determined 
by FERC, to provide the Commission with timely information for 
the purpose of complying with the National Environmental Policy 
Act of 1969 (NEPA) and other environmental statutes such as the 
Clean Water Act (referred to as ``federal authorizations''). 
FERC would be allowed to pursue remedies or implementation 
plans if a federal or state agency failed to meet the schedule 
established by FERC under this section.
    Other agencies conducting environmental reviews for 
relevant projects would be further constrained since H.R. 2910 
only provides for an agency to be designated as a 
``participating'' agency, not a cooperating agency. Mr. Turpin 
noted that some of the proposed NGA modifications would alter 
the Commission's role from one of collaboration with its fellow 
agencies to . . . monitoring other agency execution of their 
Congressionally-mandated duties. I am concerned that this . . . 
could lead to unproductive tension between the agencies 
involved in the review process.\3\
---------------------------------------------------------------------------
    \3\Id.
---------------------------------------------------------------------------
    H.R. 2910 also goes further to define a status for certain 
agencies called ``non-designation,'' which prohibits such 
agencies from being able to ``request or conduct a NEPA review 
that is supplemental to the project-related review conducted by 
the Commission. . . . '' The bill prohibits FERC from 
considering any comments or other information provided by a 
non-designated agency or including its comments or supplemental 
information in the record.
    Furthermore, the bill introduces a number of new terms into 
federal law. Some of these terms appear to be duplicative and 
unnecessary, while others are a cause for great concern. Most 
significantly, language introduced in H.R. 2910 requires 
agencies responsible for federal authorizations to deem 
applications ``sufficiently complete'' to begin consideration, 
regardless of whether the application is complete enough to 
fulfil its statutory obligations.
    Finally, H.R. 2910 would require federal and state agencies 
to accept aerial survey data, and provides that such agencies 
may grant conditional approvals based on that data, conditioned 
further on data verification via subsequent onsite inspection. 
This provision allows companies working to build natural gas 
pipelines the ability to circumvent property owners' rights 
when surveying land. In a number of cases, companies have not 
obtained the requisite permits to survey the land they are 
seeking to access, and this language appears designed to allow 
them to sidestep that aspect of the application process. At the 
legislative hearing on the bill, the Subcommittee received 
testimony from a private landowner from Pennsylvania who 
described the abuses of eminent domain authority by a company 
planning to build a natural gas pipeline through her family 
farm.\4\
---------------------------------------------------------------------------
    \4\House Committee on Energy and Commerce, transcript not 
published, Hearing on ``Legislation Addressing Pipeline and Hydropower 
Infrastructure Modernization,'' Testimony of Kim Kann, 115th Cong. (May 
3, 2017).
---------------------------------------------------------------------------
    During the Full Committee Markup of H.R. 2910, Democrats 
offered several amendments to the bill to address their 
concerns. Ranking Member Bobby Rush (D-IL) offered an amendment 
to amend the bill so that pipeline applicants cannot use 
eminent domain unless FERC makes an additional finding that the 
project and taking of private property would be in the public 
interest. Rep. Kathy Castor (D-FL) offered an amendment that 
would have added a new section that would stop the bill from 
taking effect until the Director of the Office of Management 
and Budget publishes a determination that the requirements of 
the bill would not be duplicative of other Federal streamlining 
efforts (e.g., FPISC) and will not result in wasteful 
government spending. Lastly, Ranking Member Frank Pallone, Jr. 
(D-NJ) offered an amendment that would prohibit the use of 
federal eminent domain for pipeline projects after the date of 
enactment of the bill. All three amendments failed on recorded 
votes.
    H.R. 2910 short circuits the process for considering 
natural gas project applications at the expense of private 
property owners, state and tribal rights, and the environment. 
The bill is unnecessary, not only because infrastructure 
permitting streamlining is already occurring at FPISC, but also 
because 88 percent of these projects are being certificated 
within one year. At best, it is a solution in search of a 
problem; at worst, it is an assault on private property rights 
and the environment in the name of corporate profit and 
expediency.
    For the reasons stated above, we dissent from the views 
contained in the Committee's report.

                                   Frank Pallone, Jr.,
                                           Ranking Member.
                                   Bobby L. Rush,
                                           Ranking Member, Subcommittee 
                                               on Energy.