WASHINGTON — Congressional Republicans argued for a change in regulations during a hearing Friday that would increase the likelihood for a natural gas pipeline from Colorado’s Western Slope to an export facility on the Oregon coast.
They are considering legislation that would make the Federal Energy Regulatory Commission (FERC) the final decision-maker for approval of natural gas exports.
Current procedures empower FERC to issue permits for the siting, construction and operation of projects. A second assessment of public benefit and approval is required from the Department of Energy, which has been accused by industry groups of being slow and difficult.
Similar complaints have plagued a proposed pipeline from the Western Slope in northwest Colorado to the proposed Jordan Cove export facility in Oregon, which would be used to liquefy natural gas and ship it to Asian customers.
The complaints have risen in recent years as new technology for fracking and extracting natural gas from shale rock has improved.
Some gas companies say tough regulations unnecessarily impede them from sharing in the profits. They say different regulatory requirements from several federal agencies create confusion and delays.
“The United States is the world’s number one producer of oil and gas and our reserves are so large that they are predicted to meet domestic demand for a century or more,” said Rep. Greg Walden, R-Oregon, chairman of the House Energy and Commerce Committee. “Up until the shale revolution, our supplies were dwindling, and we were importing natural gas. As you would expect, our laws reflected that reality.”
A 2016 U.S. Geological Survey analysis estimated the Mancos Shale in the Piceance Basin of Colorado contains 66 trillion cubic feet of shale natural gas, 74 million barrels of shale oil and 45 million barrels of natural gas liquids. The analysis said nearly all of it could be recovered with existing technologies.
The Piceance Basin contains five of the largest 50 natural gas fields in the United States.
“Now, to capitalize on this incredible opportunity, we need to update our laws to remove unnecessary barriers to innovation and growth,” Walden said.
Colorado U.S. Sen. Cory Gardner, R-Yuma, made a similar argument for reducing regulatory obstacles against natural gas companies during a Senate hearing last month.
He said the Jordan Cove Energy Project could create “tens of thousands of jobs in the western United States.”
So far, the $7.5 billion facility has been unable to meet federal standards for a permit to begin operating. FERC told energy company Pembina that it failed to prove the benefits from the project were adequate to invoke eminent domain without too much damage to landowners and the environment.
The Trump administration supports the Jordan Cove Energy Project but has not taken a position on the three bills being considered by the House Energy and Commerce subcommittee on energy.
The stiffest opposition to changing regulatory procedures comes from congressional Democrats, who warn of irreparable environmental damage.
Rep. Frank Pallone, D-N.J., said the changes in the proposed legislation are “not in the public interest.”
“The bill does away with the Natural Gas Act’s prohibition on the import or export of natural gas without prior approval from the Department of Energy.” Pallone said. “It removes longstanding consumer protections and prevents DOE from ensuring exports of liquefied natural gas to non-free trade agreement countries are consistent with the public interest.”
Assistant Energy Secretary Steven Winberg said the Energy Department already is approving natural gas projects and exports at a rate generating significant economic benefits.
U.S. natural gas exports are expected to grow to 2.3 billion cubic feet per day this year and 4.6 billion cubic feet per day in 2019, he said.
“We continue to support expeditious approval of natural gas exports, which provide both economic and strategic benefits to the United States and our allies,” he said.
However, industry leaders said U.S. energy companies could lose their markets to foreign competitors unless the permitting process for production and export is streamlined.
“Until recently, it has been unnecessarily difficult for [the Energy Department] to grant [non-free trade agreement] export permits,” said Charlie Riedl, executive director of the Center for Liquefied Natural Gas trade association. The Energy Department “has also been inconsistent in the time taken to grant [non-free trade agreement] export permits to applicants, some of whom have spent millions of dollars and waited hundreds of days for DOE to act.”
The three bills being considered by the committee are H.R. 4605, which would repeal restrictions on the export and import of natural gas; H.R. 4606, which would speed up permits for exporting natural gas to countries that lack free trade agreements with the United States; and H.R. 4476, which would reduce restrictions on small liquefied natural gas producers.