The Nickel Report

The successful completion of major infrastructure construction projects often depends on the amount of time required for federal agencies to process environmental reviews and make authorization decisions. This is particularly true where multiple federal agencies are involved in the process and the decisions or timeliness of one can influence the decisions or timeliness of another. While numerous administrations have attempted to address multi-agency federal permitting processes in an effort to gain efficiencies, the Trump administration has taken significant steps to ensure that federal agencies work together in ways that will reduce the amount of time required to complete all environmental reviews and issue all required authorizations.

As previously covered in this blog (January 2017 and August 2017), President Trump has issued two Executive Orders addressing this topic, the latter of which includes the “One Federal Decision” framework. Numerous federal agencies entered into a Memorandum of Understanding (MOU) in April 2018 to implement “One Federal Decision.” The MOU aims to provide a more predictable, transparent and timely Federal review and authorization process for delivering major infrastructure projects; establish standard operating procedures for how the Federal Government will make concurrent and synchronized reviews for major infrastructure projects; and eliminate duplication of effort among agencies, improve the efficiency of project delivery, make better-informed decisions and promote good environmental, community and economic outcomes. The MOU also expressly authorizes agencies to enter into supplemental agreements to implement “One Federal Decision,” including agreements on a program- and project-specific basis.

Earlier this month, consistent with the “One Federal Decision” directives, the Pipeline and Hazardous Materials Safety Administration (PHMSA) and the Federal Energy Regulatory Commission (FERC) announced their intention to develop an MOU that would refine and reduce the permit application review process for proposed Liquefied Natural Gas (LNG) facilities. The announcement’s description of what the MOU will accomplish is consistent with the April 2018 multi-agency MOU: “The MOU will clarify each agency’s respective role in the permitting process for potential LNG projects, and implement procedures into the FERC’s authorization process that will leverage PHMSA’s safety expertise to evaluate potential impact to public safety.”

The need for greater efficiency in the PHMSA and FERC application review process for LNG facilities has been a hot topic across the natural gas industry and government. Numerous efforts have been made in Congress to pass legislation that would expedite the approval of LNG projects, including by requiring FERC to authorize projects within 30 days of the completion of environmental reviews. None of these legislative efforts have succeeded (yet), but the reasons for the interest are clear: the United States has been the world’s biggest producer of natural gas since 2009 and became a net exporter in 2017 for the first time in 60 years. Approximately two dozen LNG export projects are currently in development in the United States, with companies aiming to take advantage of domestic supplies and international demand. The MOU between PHMSA and FERC should lead to faster permitting of these projects by establishing a permitting timetable; committing to cooperate, communicate, share information, and resolve conflicts that could prevent meeting milestones; and performing concurrent reviews in conjunction with the review performed by the lead agency.

Perhaps ironically, the announcement of the MOU did not contain a timeline or date by which PHMSA and FERC will sign the MOU but did commit to announcing the signature of the MOU “at a later date.” Stay tuned to this blog for more details.