Natural Gas Policy May be Outdated
Ken Costello serves as principal researcher for energy and environment at the National Regulatory Research Institute. Costello previously worked for the Illinois Commerce Commission, the Argonne National Laboratory, Commonwealth Edison Company, and as an independent consultant. He has conducted extensive research and written widely on topics related to the electric power and natural gas industries, and public utility regulation.
In 1999, the Federal Energy Regulatory Commission revised its policy for certifying new pipeline facilities under section 7 of the Natural Gas Act. The policy has met with little controversy until recently, when opposition has sprung up from diverse quarters — environmentalists, state governments, communities, and landowners. Some courts have also sided with opponents on specific issues, like FERC consideration of greenhouse gas emissions.
Interest has grown over whether FERC’s current policy serves the public interest, given the changes in energy markets and public policy over the past nearly two decades. This article discusses points of opposition to FERC’s policy and assesses whether they have any merit. FERC may want to revisit some aspects of its Policy Statement, if only to extract the lessons learned from individual cases and market performance since 1999.
Highlights of the 1999 Policy Statement
FERC relies on its 1999 Policy Statement as a guide for assessing whether a proposed natural gas pipeline is in the public convenience and necessity, such as the public interest.1