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API raises concerns about FERC policy changes

Published by , Senior Editor
Hydrocarbon Engineering,

The American Petroleum Institute (API) has filed comments to the US Federal Energy Regulatory Commission (FERC) raising concerns that the Commission’s recently proposed policy changes would undermine development of the natural gas infrastructure and facilities that are needed to increase supply in the US and expand LNG exports to our allies overseas.

The policy changes also put the Commission in direct conflict with its mandate under the Natural Gas Act, upheld by the US Supreme Court, to ensure adequate supplies of natural gas at reasonable prices for Americans.

“API is concerned that the 2022 Draft Certificate Policy Statement will create significant uncertainty that impedes the development of the pipeline capacity needed to serve new export terminals and, as such, runs counter to the Biden administration’s efforts to bolster Europe’s energy security,” API Senior Vice President Frank Macchiarola said in filed comments on FERC’s draft policy statement on the certification of new interstate natural gas facilities.

“Without the timely development of these pipelines, the nation’s ability to meet the administration’s commitment to supply natural gas to our allies will be inhibited. Given that export terminals generally take at least three years to construct, API believes FERC should ensure a transparent and expedited review process for interstate natural gas pipelines that will serve these critical facilities.”

The US and the European Union recently established a joint task force to increase LNG exports to Europe and reduce their dependency on Russian gas. As Macchiarola noted to FERC: “Given that US LNG export terminals are running at full capacity, the additional LNG will likely need to come from newly constructed terminals that will require new pipeline infrastructure to serve […] As countries turn away from Russia for natural gas supply, the ability of the US to further ramp up its export capabilities will be paramount to global energy market stability.”

In filed comments on FERC’s Draft GHG Emissions Policy Statement, Macchiarola highlighted API’s shared goal for addressing climate change and reducing emissions while also raising concerns regarding the lack of regulatory clarity, certainty and predictability.

“API supports efforts to address climate change through the reduction of greenhouse gas emissions, and accurate accounting of these emissions is paramount to these goals,” Macchiarola said. “API is concerned that the Draft GHG Emissions Policy Statement could be applied in such a way that could render projects uneconomic, reduce the availability of natural gas for critical needs (domestic and globally), and otherwise chill investment in natural gas infrastructure, impact the reliability of natural gas supply and ultimately hurt our ability to combat climate change impacts globally and to provide needed energy security to the United States and abroad.”

“API does not believe that reducing GHG emissions from our industry while ensuring reliable access to fairly priced natural gas are incompatible goals,” Macchiarola added.

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