FERC eyes Blanket Certificate Program changes

Back in May of this year, the Federal Energy Regulatory Commission (FERC) voted unanimously to launch a Notice of Proposed Rulemaking (NOPR) to revise its blanket certificate program for fast-tracking interstate natural gas pipeline projects, including expansion of existing compressors.

As of mid-October, FERC had yet to take action to finalize the changes, but various groups were maintaining keen interest in the outcome. West Virginia Attorney General J.B. McCuskey proclaimed on Oct. 7 he was leading a coalition of several states backing the proposed revisions. Twenty-six state attorneys general signed a letter urging FERC to adopt the proposals.

Brian Ford

“This Proposed Rule would benefit everyone, including gas producers who will be able to avoid red tape and consumers who will have greater access to affordable energy when they need it most,” McCuskey said in a press release.

The Blanket Certificate Program was established in 1982 to provide streamlined authorization for certain natural gas infrastructure activities. Among other things, the proposed rulemaking would raise the cost limits for projects that qualify for the program.

Blanket certificates have been limited to projects with a maximum cost of US$14.5 million that were authorized without being required to provide prior notice to FERC. That limit would increase to US$30 million for such projects under the proposed rule.

In cases where prior notice of a project to FERC is required, the commission issues a notice providing 60 days to protest and/or intervene. In those instances, the project cost threshold for blanket certification would increase to US$86 million from US$41.1 million under the proposed rule.

FERC has already granted a temporary waiver of the existing cost limits at the urgings of the Interstate Natural Gas Association of America (INGAA), raising the blanket certification eligibility threshold for pipeline projects to US$61,650,000 if constructed and placed in service by May 31, 2028. In seeking the waiver, INGAA cited the rising costs of pipeline and compressor construction.

Analysis by INGAA indicated there was a 256% median increase in cost per inch-mile for pipelines and a 172% median increase in cost per horsepower for compression between 2006 and 2024, according to a filing by FERC with the Federal Register. Specifically, INGAA’s analysis showed, using data from pipeline applications, that the median cost per inch-mile of pipeline construction rose 256.98% from 2006 to 2024 and the median cost per horsepower of compression projects rose 172.76% over the same period, for an average increase of 214.87%.

FERC’s rulemaking proposal also proposes removing blanket certificate cost limits for expansions within the fence line of existing compressor stations under prior notice procedures, according to an analysis by the Van Ness Feldman law firm.

“The NOPR explains that limiting this work to within the fence line would limit impacts on landowners but allow pipeline companies to expand their systems using the expedited blanket certificate procedures,” the law firm said.

Of course, not everybody is happy with the proposed rule.

In July, Washington Attorney General Nick Brown and Massachusetts Attorney General Andrea Joy Campbell led 15 state attorneys general in a motion opposing the changes, according to the State Energy & Environmental Impact Center of the NYU School of Law. The attorneys general argued that the proposed rule “does not enable the Commission to fulfill [the] responsibilities” to “ensure that new pipelines do not unfairly burden everyday consumers, the air we breathe, and the water we use.” They added said that the proposal “is likely to raise energy bills, increase air pollution, and cause other harms without countervailing benefits.”

A host of environmental groups are also against the rule.

“Most people have never heard of FERC’s blanket certificate program, but the consequences could show up in their communities and on their energy bills,” said Megan C. Gibson, senior attorney at the Southern Environmental Law Center, in a press release. “This proposal could let pipeline companies spend tens of millions of dollars—with no cost ceiling for some projects while giving the public less notice and less opportunity to have any input or object.”