[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
       H.R. 1900, THE NATURAL GAS PIPELINE PERMITTING REFORM ACT

=======================================================================


                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              JULY 9, 2013

                               __________

                           Serial No. 113-66


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov



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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
JOE BARTON, Texas                      Ranking Member
  Chairman Emeritus                  JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania        FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska                  ANNA G. ESHOO, California
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
TIM MURPHY, Pennsylvania             GENE GREEN, Texas
MICHAEL C. BURGESS, Texas            DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee          LOIS CAPPS, California
  Vice Chairman                      MICHAEL F. DOYLE, Pennsylvania
PHIL GINGREY, Georgia                JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             JIM MATHESON, Utah
ROBERT E. LATTA, Ohio                G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington   JOHN BARROW, Georgia
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            DONNA M. CHRISTENSEN, Virgin 
BILL CASSIDY, Louisiana                  Islands
BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
PETE OLSON, Texas                    JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia     JERRY McNERNEY, California
CORY GARDNER, Colorado               BRUCE L. BRALEY, Iowa
MIKE POMPEO, Kansas                  PETER WELCH, Vermont
ADAM KINZINGER, Illinois             BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia         PAUL TONKO, New York
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
                    Subcommittee on Energy and Power

                         ED WHITFIELD, Kentucky
                                 Chairman
STEVE SCALISE, Louisiana             BOBBY L. RUSH, Illinois
  Vice Chairman                        Ranking Member
RALPH M. HALL, Texas                 JERRY McNERNEY, California
JOHN SHIMKUS, Illinois               PAUL TONKO, New York
JOSEPH R. PITTS, Pennsylvania        EDWARD J. MARKEY, Massachusetts
LEE TERRY, Nebraska                  ELIOT L. ENGEL, New York
MICHAEL C. BURGESS, Texas            GENE GREEN, Texas
ROBERT E. LATTA, Ohio                LOIS CAPPS, California
BILL CASSIDY, Louisiana              MICHAEL F. DOYLE, Pennsylvania
PETE OLSON, Texas                    JOHN BARROW, Georgia
DAVID B. McKINLEY, West Virginia     DORIS O. MATSUI, California
CORY GARDNER, Colorado               DONNA M. CHRISTENSEN, Virgin 
MIKE POMPEO, Kansas                      Islands
ADAM KINZINGER, Illinois             KATHY CASTOR, Florida
H. MORGAN GRIFFITH, Virginia         JOHN D. DINGELL, Michigan
JOE BARTON, Texas                    HENRY A. WAXMAN, California (ex 
FRED UPTON, Michigan (ex officio)        officio)



                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     5
    Prepared statement...........................................     6
Hon. Jerry McNerney, a Representative in Congress from the State 
  of California, opening statement...............................     7
Hon. Ed Whitfield, a Representative in Congress from the 
  Commonwealth of Kentucky, opening statement....................     8
    Prepared statement...........................................     9
Hon. Mike Pompeo, a Representative in Congress from the State of 
  Kansas, opening statement......................................     9
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................    10

                               Witnesses

Philip D. Moeller, Commissioner, Federal Energy Regulatory 
  Commission; Accompanied by Jeff C. Wright, Director, Office of 
  Energy Projects, Federal Energy Regulatory Commission..........    12
    Prepared statement...........................................    15
David Markarian, Vice President, Governmental Affairs, Nextera 
  Energy, Inc....................................................    39
    Prepared statement...........................................    41
Maya K. Van Rossum, The Delaware Riverkeeper, Delaware 
  Riverkeeper Network............................................    47
    Prepared statement...........................................    49
Rick Kessler, President, Board of Directors, Pipeline Safety 
  Trust..........................................................    78
    Prepared statement...........................................    81
Alex Paris, III, Distribution Contractors Association............    87
    Prepared statement...........................................    89
Donald F. Santa, Jr., President and CEO, INGAA...................    96
    Prepared statement...........................................    98

                           Submitted Material

H.R. 1900........................................................     2
Materials submitted by Mr. Pompeo
    Letter of July 8, 2013, from the National Association of 
      Manufacturers to the Committee.............................   120
    Letter of July 2, 2013, from the Chamber of Commerce to the 
      Committee..................................................   122
    Letter of July 1, 2013, from the Distribution Contractors 
      Association to the Committee...............................   124
    Letter of June 28, 2013, from the Electric Power Supply 
      Association to the subcommittee............................   125
    Letter of June 26, 2013, from Edison Electric Institute to 
      the subcommittee...........................................   127
    Letter of July 8, 2013, from the American Public Power 
      Association to the subcommittee............................   129
    Letter of July 8, 2013, from the Gas Processors Association 
      to the Committee...........................................   130
Technical analysis of H.R. 1900 by the Army Corps of Engineers, 
  submitted by Mr. Waxman........................................   132
Technical analysis of H.R. 1900 by the U.S. Environmental 
  Protection Agency, submitted by Mr. Waxman.....................   133


       H.R. 1900, THE NATURAL GAS PIPELINE PERMITTING REFORM ACT

                              ----------                              


                         TUESDAY, JULY 9, 2013

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:05 a.m., in 
room 2123, Rayburn House Office Building, Hon. Ed Whitfield 
(chairman of the subcommittee) presiding.
    Present: Representatives Whitman, Scalise, Hall, Pitts, 
Terry, Latta, Cassidy, Olson, Gardner, Pompeo, Kinzinger, 
Griffith, Barton, Upton (ex officio), McNerney, Tonko, Green, 
Barrow, Matsui, Castor, Dingell, and Waxman (ex officio).
    Also Present: Representative Murphy of Pennsylvania.
    Staff Present: Nick Abraham, Legislative Clerk; Gary 
Andres, Staff Director; Charlotte Baker, Press Secretary; 
Allison Busbee, Policy Coordinator, Energy and Power; Patrick 
Currier, Counsel, Energy and Power; Tom Hassenboehler, Chief 
Counsel, Energy and Power; Jason Knox, Counsel, Energy and 
Power; Ben Lieberman, Counsel, Energy and Power; Brandon 
Mooney, Professional Staff Member; Jeff Baran, Minority Senior 
Counsel; Phil Barnett, Minority Staff Director; Greg Dotson, 
Minority Staff Director, Energy and Environment; Caitlin 
Haberman, Minority Policy Analyst; and Bruce Ho, Minority 
Counsel.
    Mr. Whitfield. I would like to call the hearing to order 
this morning.
    Today we are going to be focusing on H.R. 1900, the Natural 
Gas Pipeline Permitting Reform Act.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] 86390.060
    
    [GRAPHIC] [TIFF OMITTED] 86390.061
    
    [GRAPHIC] [TIFF OMITTED] 86390.062
    
    Mr. Whitfield. And while I would normally give my opening 
statement first, I am going to be yielding to someone who is 
not here yet. So I am going to call on the chairman of the full 
committee to give his opening statement at this time.
    Mr. Upton is recognized for 5 minutes.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Well, thank you, Mr. Chairman.
    You know, this subcommittee has held a number of hearings 
addressing America's growing natural gas abundance, and two 
clear messages have emerged: first, that plentiful and 
affordable natural gas supplies offer many potential 
advantages; and, second, there is bipartisan support for the 
development and use of domestic natural gas.
    Today we are going to discuss a critical step in turning 
these pro-natural-gas words into action with H.R. 1900, the 
Natural Gas Pipeline Permitting Reform Act.
    In a number of locations across the country, the existing 
natural gas pipeline infrastructure is indeed struggling to 
keep pace with the expanding supplies while approvals for new 
pipelines often get delayed by State and Federal red tape that 
can last for years and years.
    To put it bluntly, the permitting process has not kept up 
with the times. This problem is especially exacerbated in areas 
in the Northeast and the Midwest, as we learned in our natural-
gas-electric coordination hearings earlier in this Congress.
    As more and more of our energy needs become tied to the 
safe deliverability of natural gas, the need to build new 
pipeline infrastructure to connect new supplies to existing and 
new markets becomes more critical.
    This is where the Natural Gas Pipeline Permitting Reform 
Act comes in. This legislation helps to put the Federal 
permitting process on a reasonable schedule with clear 
deadlines so that every Federal and State agency can be held 
accountable and know the rules of the road. I want to thank my 
friend and colleague, Mike Pompeo, for spearheading this 
commonsense bill.
    New natural gas pipeline projects are going to benefit us 
in many ways. First, the projects themselves will provide 
significant numbers of good-paying jobs at a time of chronic 
high unemployment. And with each completed project, more 
natural gas can be transported to where it is needed. Countless 
homeowners and small-business owners could benefit from lower 
gas and electric bills. Natural-gas-dependent manufacturers 
could obtain sufficient supplies to sustain an American 
manufacturing renaissance. And a more robust pipeline 
infrastructure would open up promising opportunities to export 
natural gas supplies to our trading partners around the world.
    The opportunities are great, but they could be stalled or 
even lost for good unless the pipelines start getting built. 
This legislation helps provide the certainty to ensure that 
these critical infrastructure projects get in the ground 
without unnecessary delay, while at the same time making sure 
they are protective of safety and the environment.
    And I will remind us all, the President signed the pipeline 
safety bill last year, which upgraded 57 standards, new 
standards, for every oil and gas new pipeline being 
constructed. And I want to say that that bill passed without 
dissent, not only in this committee but also on the House 
floor. Maybe there was one person against it, but it was 
overwhelming.
    Natural gas is going to be a big part of our energy future 
but only if we cut the red tape from the past. We are a Nation 
of builders, not a Nation of bottlenecks. And I look forward to 
this discussion of the Natural Gas Pipeline Permitting Reform 
Act and advancing this important piece of energy and jobs 
legislation.
    And I yield the balance of my time back to the chairman.
    Mr. Whitfield. Well, thank you, Mr. Upton.
    [The prepared statement of Mr. Upton follows:]

                 Prepared statement of Hon. Fred Upton

    This subcommittee has held a number of hearings addressing 
America's growing natural gas abundance, and two clear messages 
have emerged--first, that plentiful and affordable domestic 
natural gas supplies offer many potential advantages, and 
second, that there is bipartisan support for the development 
and use of domestic natural gas. Today, we will discuss a 
critical step in turning these pro-natural gas words into 
action with H.R. 1900, the ``Natural Gas Pipeline Permitting 
Reform Act.''
    In a number of locations across the country, the existing 
natural gas pipeline infrastructure is struggling to keep pace 
with the expanding supplies, while approvals for new pipelines 
often get delayed by state and federal red tape that can last 
for years. To put it bluntly, the permitting process has not 
kept up with the times. This problem is especially exacerbated 
in areas in the Northeast and Midwest as we learned in our 
natural gas electric coordination hearings earlier this 
Congress. As more and more of our energy needs become tied to 
the safe deliverability of natural gas, the need to build new 
pipeline infrastructure to connect new supplies to existing and 
new markets becomes more critical.
    This is where the ``Natural Gas Pipeline Permitting Reform 
Act'' comes in. This legislation helps to put the federal 
permitting process on a reasonable schedule with clear 
deadlines so all federal and state agencies are held 
accountable and know the rules of the road. I would like to 
thank my friend and colleague Mike Pompeo for spearheading this 
commonsense bill.
    New natural gas pipeline projects will benefit us in many 
ways. First, the projects themselves would provide significant 
numbers of good-paying jobs at a time of chronic high 
unemployment. And with each completed project, more natural gas 
can be transported to where it is needed. Countless homeowners 
and small business owners could benefit from lower gas and 
electric bills. Natural gas-dependent manufacturers could 
obtain sufficient supplies to sustain an American manufacturing 
renaissance. And a more robust pipeline infrastructure would 
open up promising opportunities to export natural gas supplies 
to our trading partners around the world.
    The opportunities are great, but they could be stalled or 
even lost for good unless the pipelines start getting built. 
This legislation helps provide the certainty to ensure these 
critical infrastructure projects get in the ground without 
unnecessary delay while at the same time making sure they are 
protective of safety and the environment.
    Natural gas is going to be a big part of our energy future, 
but only if we cut the red tape from the past. We are a nation 
of builders, not a nation of bottlenecks. I look forward to 
this discussion of the ``Natural Gas Pipeline Permitting Reform 
Act'' and advancing this important piece of energy and jobs 
legislation.

                                #  #  #

    Mr. Whitfield. At this time, I would like to recognize the 
gentleman from California, Mr. McNerney, for 5 minutes for an 
opening statement.

 OPENING STATEMENT OF HON. JERRY MCNERNEY, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. McNerney. Well, thank you, Mr. Chairman, for holding 
this hearing on H.R. 1900, the Natural Gas Pipeline Permitting 
Reform Act.
    This subcommittee has held several hearings over the first 
6 months of this year, many of which have focused on natural 
gas and our goal to achieve national energy independence 
through an approach that encompasses a variety of energy 
resources.
    Although there have been advantages of increasing natural 
gas production here in the United States, we must produce 
energy responsibly, in a way that doesn't harm our environment 
or the public health. There are still reasonable concerns about 
methane leakage and pollution regarding natural gas production.
    However, I think we are taking some positive first steps. 
For example, the EPA's final rule to reduce harmful emissions 
of methane and other greenhouse gases from new natural gas 
wells that use hydraulic fracturing will help our air quality 
and climate in years ahead.
    Under the Natural Gas Act, FERC reviews applications for 
siting, construction, and operation of interstate natural gas 
pipelines. A company must receive a certificate of public 
convenience and necessity before building a pipeline. FERC also 
works with other agencies, such as the U.S. Army Corps of 
Engineers and the Fish and Wildlife Service, when reviewing 
permit applications.
    According to a 2013 GAO report, the average processing time 
from the filing of an application to certification was 225 
days. H.R. 1900 modifies the Natural Gas Act to require FERC to 
improve or deny a certificate within 12 months of the notice of 
application. The bill also imposes a 90-day deadline for other 
agencies to decide on other permits, such as those under the 
Clean Water Act and Clean Air Act. Lastly, the bill provides 
that the licenses and permits will automatically go into effect 
if the respective agency doesn't approve them on time.
    I understand that the goal of these provisions is to speed 
up the permitting process, but I don't believe that setting the 
same firm deadlines for every natural gas pipeline project is 
necessarily in the public's interest. These deadlines may be 
achievable for a straightforward project or for a short 
pipeline but impractical for a complex pipeline that would 
travel hundreds of miles.
    I would much rather see FERC and the experts from other 
agencies have the appropriate time to thoroughly review an 
application rather than be forced to rush and potentially make 
a mistake during the process. Sound science and proper 
environmental and technical review is essential. It isn't in 
anyone's interest to cut these reviews short or to reduce 
opportunities for public involvement.
    There are just a couple of issues I hope we can answer 
today before we start the subcommittee markup this afternoon. 
We should fully understand the impacts of the changes made by 
this legislation and make sure they are necessary.
    I want to thank our witnesses today, and I am eager to hear 
their testimony and input to H.R. 1900.
    At this point, I would like to recognize my colleague from 
Texas, Mr. Green.
    Mr. Green. Thank you, Mr. Chairman, and thank our ranking 
member for allowing me to take some time.
    First of all, coming from where I come from, we have 
pipelines everywhere. People have said, I have never not lived 
on a pipeline easement in the Houston area. So I am very 
supportive of it.
    I support knowing regulatory certainty so we will know that 
these things can't be drug out. But I think the bill goes so 
far in the deeming and approval, it may end up transferring it 
from a regulatory agency, FERC, who has been doing a pretty 
good job over the last 10 years--I know a few years ago I had 
some problems with FERC, but--but, you know, it may end up just 
transferring it to the courthouse, where we can't do anything 
about it.
    So I would hope we have looked at the language of the bill, 
and particularly in section 3, and even looked at the testimony 
from Commissioner Moeller, who talks about some of the good 
things going on in FERC. And, typically, where I come from, if 
it ain't broke, you don't fix it. FERC was broken a few years 
ago, but it has been fixed. And I hate to create this new 
legislation that will make it harder to get pipelines approved, 
because pipelines are the safest way to move any product, as we 
found out recently, although it was an oil train, instead of 
anything else.
    But, again, I thank my colleague for yielding to me, and I 
look forward to the hearing.
    Mr. McNerney. Thank you.
    I yield back, Mr. Chairman.

  OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN 
           CONGRESS FROM THE COMMONWEALTH OF KENTUCKY

    Mr. Whitfield. The gentleman yields back.
    At this time, I will recognize myself for a 5-minute 
opening statement.
    Recently, the World Economic Forum was held in Davos, 
Switzerland, and the reports coming out of that forum was that 
a lot of attention was focused on the tremendous finds of 
natural resources in America and how the Eagle Ford, the 
Marcellus Shale, the Bakken field, and others in oil and gas 
gave America the opportunity to really become energy-
independent. And people who attended that forum were struck by 
how the Europeans, in particular, were really focused on that 
issue.
    Since then, we have had a lot of hearings, and it is quite 
clear that we do have a capacity limit as it relates to 
transmission of gas in pipelines. And it has become quite 
clear, I think, to most people that FERC lacks the ability to 
enforce agency decisional deadlines related to these natural 
gas pipeline applications.
    And with the potential growth in this market, we have had 
hearings also about the problems in the Northeast, the lack of 
a capacity to get the product there. And so I am delighted that 
Mr. Pompeo has introduced H.R. 1900 to help us focus on this 
issue. It gives us the opportunity to look at his legislation 
and see if we could come up with a way to address this 
significant issue in America.
    So at this time, I would like to recognize the gentleman 
from Kansas for purposes of an opening statement.
    [The prepared statement of Mr. Whitfield follows:]

                Prepared statement of Hon. Ed Whitfield

    Over the last 6 months of this Congress, the Energy and 
Power Subcommittee has held multiple hearings that have touched 
on issues related to the growing domestic production of natural 
gas.
    While we don't often agree on all of the issues before us, 
it has been heartening to hear the near universal consensus 
from the members of this subcommittee on the abundant growth in 
natural gas supplies and its benefits, such as increased 
manufacturing competitiveness along with growing support for 
exports, both of which need to be encouraged for the betterment 
of our economy and our energy security.
    A common theme we have heard from our earlier hearings is 
that the U.S. needs to greatly expand its pipeline 
infrastructure because the new shale gas development has 
largely altered the previously existing model of delivering gas 
to capacity constrained centers that need it most like the 
Northeast and Midwest.
    Producers need pipeline infrastructure to move it from the 
place of production to where it needs to be supplied most, 
which is often hundreds if not thousands of miles away. 
Utilities and manufacturers in the Northeast lack adequate 
supplies due to a lack of pipeline infrastructure.
    There are endless examples of why more natural gas 
pipelines are needed but suffice it to say that it affects 
Americans in the two places that matter most right now--in the 
consumer's wallets and in the job market.
    I want to thank Representative Pompeo for his work on H.R. 
1900, the Natural Gas Pipeline Permitting Reform Act. It is a 
commonsense and thoughtful approach to dealing with a critical 
need-the ability to build infrastructure in a timely manner. I 
also want to praise him for his openness to working with a wide 
variety of members on this issue, regardless of party 
affiliation. With that I will yield the balance of my time to 
Mr. Pompeo.

                                #  #  #

  OPENING STATEMENT OF HON. MIKE POMPEO, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF KANSAS

    Mr. Pompeo. Thank you, Chairman Whitfield. And thanks for 
holding this hearing this morning on the H.R. 1900.
    You know, we have natural gas production, as some have 
said, at an all-time high domestically. It is becoming an 
enormously important and prevalent fuel source for electricity 
generation, especially in the Northeast, which is starved for 
electrical power. Because of this combination of increased 
production and demand for natural gas, it is absolutely vital 
that the law for natural gas pipelines keep up with the 
capacity to get this stuff out of the ground.
    The Energy Policy Act of 2005 made a very early attempt at 
improving the gas pipeline process, requiring FERC to act as 
the lead agency for all interstate natural gas pipelines. I 
think that absolutely made sense at the time. And in using this 
authority under EPAct, FERC required that all permitting 
agencies complete their reviews no later than 90 days after 
FERC provided notice that the environmental review was 
complete.
    And despite those very, very good reforms, we are seeing a 
growing need for natural gas pipeline infrastructure beyond 
that which the authors of EPAct could possibly have 
contemplated at the time it was being put into law. There was a 
very recent report that found increasing delays of 90, 180 
days, or even more in the construction of pipeline projects, in 
part because we have permitting process that still remains very 
complex. That is the language that the GAO used, called the 
permitting process too complex.
    That is why I, along with Congressmen Matheson and Olson 
and Johnson and Gardner from this committee introduced H.R. 
1900, the Natural Gas Pipeline Permitting Reform Act. We try to 
do two things in the law. We make commonsense reforms allowing 
the permitting process to create certainty for businesses. We 
do not have to gut the whole environmental review process to do 
that, and this bill doesn't.
    The point on environmental review is very important. 
Nothing in this legislation takes away any authority from any 
permitting agency, and nothing in this legislation amends or 
limits any existing environmental statute. It doesn't touch 
NEPA, the Clean Air Act, the Clean Water Act, or any other 
provision related to environmental review.
    Look, in a perfect world, I would introduce legislation 
that would be a complete overhaul of this system. But what I am 
trying to do here is create business certainty. They can grant 
the permit, they can deny the permit, they can grant the permit 
with conditions, but the agencies are forced to complete their 
task.
    Mr. Chairman, I look forward to our hearing this morning 
and our markup later this afternoon and tomorrow.
    I would like to end by submitting letters for the record 
from organizations supporting H.R. 1900, including the National 
Association of Manufacturers, the U.S. Chamber of Commerce, the 
Distribution Contractors Association, the Electric Power Supply 
Association, Edison Electric Institute, the American Public 
Power Association, and the Gas Processors Association.
    Thank you, Mr. Chairman, and I yield back my time.
    Mr. Whitfield. Well, without objection, those will be 
entered into the record.
    [The information appears at the conclusion of the hearing.]
    Mr. Whitfield. And I yield back the balance of my time.
    At this time, I recognize the gentleman from California, 
Mr. Waxman, for a 5-minute opening statement.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you, Mr. Chairman.
    Today's hearing focuses on Congressman Pompeo's bill, which 
addresses the permitting of interstate natural gas pipelines.
    The U.S. Has more than 200,000 miles of interstate natural 
gas pipelines, and more new pipelines are built every year. 
Between 2009 and 2012, the Federal Energy Regulatory 
Commission, or FERC, approved over 3,000 miles of new pipelines 
in 30 States. On average, it took FERC only 9 \1/2\ months to 
review and approve applications for pipeline projects.
    Earlier this year, GAO examined FERC's permitting process 
and found it to be predictable and consistent. This process is 
getting pipelines permitted and built. That is what the 
pipeline companies told the subcommittee in May, when they 
testified that, ``the interstate natural gas pipeline sector 
enjoys a favorable legal and regulatory framework for the 
approval of new infrastructure.'' They testified that pipeline 
development over the last decade shows that, ``the natural gas 
model works.''
    Unfortunately, the bill we are considering today proposes 
to change a regulatory system that is working fine. The bill 
would require FERC to approve or deny new pipeline certificates 
within 12 months, regardless of their potential impacts or 
complexity. It would require all other Federal and State 
agencies to approve or deny required permits within 90 days 
after FERC completes its environmental review.
    According to FERC's staff, some projects, due to their 
complexity, length, path, and the level of public concern, take 
longer than 12 months to review to get right. Arbitrarily 
limiting this time will deny FERC and the public the 
opportunity to fully consider these projects.
    And it will likely results in slower, rather than faster, 
permitting. If FERC is unable to properly evaluate a project 
within 12 months, the bill's rigid deadline could force FERC to 
simply deny the permit. A project that currently could be 
approved in 15 months after a full review might instead be 
denied in 12 months under this bill.
    The bill's limits on other agencies would create additional 
problems. The Environmental Protection Agency says that the 
bill's 90-day deadline could undermine protections under the 
Clean Air Act and the Clean Water Act. The U.S. Army Corps of 
Engineers came to the same conclusion, stating that the bill 
would, ``allow certain activities to proceed despite potential 
adverse and significant impacts.'' Other agencies and statutes 
will also be affected. This bill threatens the Bureau of Land 
Management's ability to manage rights of way across Federal 
lands and Fish and Wildlife Service's ability to protect 
endangered species.
    If any agency does not approve or deny a permit within 90 
days, the bill states that the permit automatically goes into 
effect.
    That could create new legal vulnerabilities for pipeline 
permits by giving a pipeline company a permit without ensuring 
that the environment and public health are protected. 
Alternatively, agencies could be forced to simply deny the 
permits when they are prohibited from taking the time needed 
for reviews required by Federal law.
    American families expect our laws to protect health, 
safety, and the environment whenever pipelines are built. We 
shouldn't put those protections at risk.
    We should also remember that, when FERC approves a 
pipeline, it grants the power of eminent domain, which allows a 
pipeline company to take property from landowners who do not 
want to sell. That is not something that should happen without 
agencies taking the time they need for thorough analysis and 
thoughtful decision-making. But, with this bill, we get rushed 
decisions and probably more project denials. No one benefits 
from that, not even the pipeline companies.
    Mr. Chairman, this bill has not been well thought out. It 
is good that we are having a hearing so that Members can better 
understand the problems with this bill.
    I yield back the balance of my time.
    Mr. Whitfield. Thank you, Mr. Waxman.
    That concludes the opening statements.
    And so we have two panels of witnesses today. On the first 
panel, there is only one witness, and that is Mr. Philip 
Moeller, who is our Commissioner over at the Federal Energy 
Regulatory Commission. And accompanying him is Mr. Jeff Wright, 
who is the FERC Director of the Office of Energy Projects.
    And I am sure that--I know sometimes in Congress Members 
need to confer with their staff. I am sure that is not the case 
in your situation, Mr. Moeller. But if you do, I understand Mr. 
Wright is quite an expert, so we are delighted that he is here, 
as well.
    So, Mr. Moeller, thanks very much for being with us today. 
We do appreciate your views on this important issue.
    And, at this time, I would recognize myself for 5 minutes 
of questions.
    And I guess before I ask you questions, I should give you 
an opportunity to make an opening statement, as well. So I will 
recognize you for 5 minutes.

  STATEMENT OF THE HONORABLE PHILIP D. MOELLER, COMMISSIONER, 
 FEDERAL ENERGY REGULATORY COMMISSION; ACCOMPANIED BY JEFF C. 
  WRIGHT, DIRECTOR, OFFICE OF ENERGY PROJECTS, FEDERAL ENERGY 
                     REGULATORY COMMISSION

    Mr. Moeller. Well, thank you, Mr. Chairman and members of 
the committee. My name is Phil Moeller. I am the sitting 
Commissioner at the Federal Energy Regulatory Commission. It is 
an honor to be back before you again today. And the testimony 
today related to H.R. 1900, the Natural Gas Pipeline Permitting 
Reform Act. My testimony reflects only my views, but I can 
elaborate on some of my colleagues' views, as well, if you 
would like.
    From the onset, I want to thank you for shining the light, 
highlighting the issue of the need for additional energy 
infrastructure in this country. Consumers, generally speaking, 
enjoy abundant, reliable, and safe energy of many different 
forms, but they generally don't like to look at the pipes and 
wires that delivers it to them. And getting infrastructure 
built is, frankly, getting more difficult in the country. So 
the fact that you are focusing on this is a relevant topic.
    Similarly, focusing on governmental agency action in a 
timely manner is relevant, as well, and certainly specific to 
this, and the natural gas industry is relevant and timely.
    I think that FERC performs generally very well when it 
comes to energy projects, including natural gas pipelines. And 
I think that observation was largely supported by the report 
that has been referenced a few times already, the 2013 GAO 
report on pipeline permitting.
    Our jurisdiction, under Section 7 of the Natural Gas Act, 
relates to interstate pipelines, those that are proposed within 
a State. Intrastate pipelines, that jurisdiction rests solely 
with the States.
    Now, specific to natural gas pipeline certificates, project 
applications that we see at FERC have a wide range. They can be 
relatively small, uncontested upgrades to existing facilities, 
or they can range to a new pipeline that covers hundreds of 
miles. And so, naturally, the smaller and less contested 
projects can be reviewed by us in a shorter amount of time and 
the complex applications take longer.
    We did an internal review over the last few years since 
Federal fiscal year 2009, and in that time we had a total of 
548 applications submitted to the Commission. Projects in what 
we call the ``Prior Notice/No Protests'' category average 75 
days for a Commission decision. Those projects in the 
``Protests, Policy Issues, or Major Construction'' category 
averaged 375 days for a Commission decision.
    We stress to project developers the importance of public 
involvement when considering their projects, although some 
developers are better at outreach than others. Generally, those 
that employ aggressive public outreach tend to be rewarded with 
less contentiousness and faster Commission decisions.
    In my time at the Commission, I believe every new major 
pipeline project has had some kind of a route change based on 
public involvement. So hopefully we are seen as responsive to 
the public that is concerned about these projects.
    However, we are often dependent on other Federal agencies--
a long list of them is in my testimony--to review aspects of 
the proposed projects. And sometimes, of course, State and 
local governments are involved, as well.
    Specific to H.R. 1900, I have been informed by our 
Commission staff that the 12-month timeline for action is 
achievable once the Commission determines that an application 
is complete. That is a key point. And I would respectfully 
suggest that clarifying that aspect might help the bill's 
effectiveness, would it become law.
    The timeline for resource agencies adds an admirable level 
of accountability for these resource agencies involved. My only 
caution is that, without high-level agency oversight directing 
the agencies to prioritize these permits, a timeline could 
result in agencies either denying certain permits or adding 
burdensome conditions as a way to protect themselves from 
accusations of insufficient review. Vigilant oversight of 
resource agency actions will be necessary if these requirements 
become law.
    Apart from the bill itself, other actions would assist a 
more timely consideration of proposed timelines. Three areas: 
The first is the one I just reiterated. The management of 
Federal resource agencies have to be following these projects 
and these reviews to make sure that they are priorities to be 
reviewed in a timely manner. And we have seen a wide range. 
When agencies make this a priority, we get timely decisions. If 
they don't, things can drag on, and usually consumers are the 
ones who pay the price.
    A second area is that we suggest that all natural gas 
pipeline developers should take advantage of the Commission's 
pre-filing process, but not all do so. This process allows a 
lot of the issues to be resolved with the Commission staff and 
various stakeholders before a formal application. Once the 
formal application is in, the ex parte rules apply and all 
communication needs to be in writing.
    A third area, as noted in the GAO report, is that some 
States have designated a one-stop resource agency to coordinate 
State decisions on proposed pipelines. And for those States 
that have done it, it has generally added to regulatory 
certainty. For those States that haven't, it is typically a lot 
more difficult to get the pipeline actually constructed or at 
least considered. So I would respectfully suggest that those 
States that don't have such a one-stop permitting resource 
agency consider doing so.
    Again, it is an honor to be here. I appreciate the chance 
to talk about infrastructure, and I look forward to any 
questions.
    Mr. Whitfield. Well, Mr. Moeller, thanks so much, and we 
appreciate your opening statement.
    [The prepared statement of Mr. Moeller follows:]
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    Mr. Whitfield. And now I will recognize myself for 5 
minutes of questions.
    First of all, in the opening statements up here, I think 
you could detect that on one side of the aisle there was the 
impression that there really was not that much of a problem out 
there and on the other side of the aisle there was some 
reference that there is a problem out there relating to the 
approval of natural gas pipelines.
    Since you are a Commissioner there at FERC and you deal 
with this on a regular basis, what is your opinion? Is there a 
need for assistance in speeding up these applications or not?
    Mr. Moeller. Well, I think the trend is such that, because 
of the abundant domestic resource that several of the Members 
referenced earlier, we are probably going to see an increase in 
pipelines. And I think the numbers show that we are getting an 
increase in the number of applications. It is probably project 
by project, as to whether there is a problem. Resource agencies 
need to have--I think the accountability aspect of it is good.
    So there is a growing--we are certainly trending in a way 
where we are going to be a lot busier at FERC. And to the 
extent that Federal agencies can stick to timelines, I think 
the process would benefit.
    Mr. Whitfield. And how many people are really involved in 
the application process for a pipeline at FERC?
    Mr. Moeller. Well, again, it depends on the project, but we 
have internal engineers, particularly analysts--Mr. Wright can 
probably elaborate more. We also have contractors that can 
perform environmental reviews. But it depends on the extent of 
the project. But----
    Mr. Whitfield. Right.
    Mr. Moeller. --from just a few to many, especially if it is 
involving new pipe.
    Mr. Whitfield. Yes. And, typically, what takes the most 
time, I am assuming, is the environmental impact study. Is that 
correct?
    Mr. Moeller. Yes. Well, arguably, maybe the pre-filing 
process, depending on the extent of the project. But once the 
application is filed, yes, the environmental review, whether it 
is an environmental impact statement or an environmental 
assessment, would take the most amount of time in terms of the 
process.
    Mr. Whitfield. And under the Energy Power Act of 2005, you 
all have the authority to conduct the environmental impact 
study, correct?
    Mr. Moeller. Yes.
    Mr. Whitfield. OK. Now, you mentioned the pre-filing, of 
course, in your opening statement, as well. Would you elaborate 
a little bit on what is included in this pre-filing process?
    Mr. Moeller. Well, typically, the developers will come to 
the Commission with an idea of what they are proposing. 
Sometimes there is an economic element of it, as well, in terms 
of who is going to bear the burden of financing it, but mostly 
it is going to be a focus on environmental aspects of the 
project.
    And the feeling is that if the developer can work with the 
Commission staff and the stakeholders, a wide range of 
stakeholders, they can eliminate a lot of misunderstandings 
that could occur in terms of routing, mitigation. And those are 
just much easier to work out before the formal ex parte rules 
apply.
    Mr. Whitfield. You know, I have heard some people refer to 
it as sort of a Byzantine system, which--would that be a fair 
characterization, or is that being a little bit--maybe it is 
not that difficult. But you are dealing with State issues, you 
are dealing with local issues. You are dealing with a lot of 
other government agencies, as well.
    Mr. Moeller. I am guessing that it becomes more Byzantine 
the more agencies that are involved. If it is relatively 
focused, where maybe only one or two Federal agencies are in 
the loop, that is better. You start adding on to that, there 
are just that many more decision points.
    Mr. Whitfield. Right.
    And have you had the opportunity to review H.R. 1900?
    Mr. Moeller. I have, yes.
    Mr. Whitfield. And, your personal view, do you think this 
is a good piece of legislation? Do you support this?
    Mr. Moeller. As I noted in the testimony, I think the key 
in terms of the 12-month timeline is having an ability for the 
Commission, perhaps through Mr. Wright, to designate once an 
application is complete that the timeline kicks in then. A lot 
of the problems we have had with developers are, you know, they 
are missing something, and that delays the process. Once it is 
deemed complete, we feel that the 12-month timeline is--we can 
accomplish that.
    Mr. Whitfield. OK. Well, thank you very much.
    Mr. McNerney, you are recognized for 5 minutes.
    Mr. McNerney. Thank you, Mr. Chairman.
    And thank you, Commissioner, for your thoughtful testimony. 
I think it was very informative.
    It seemed to me that you were saying that, if companies 
participated in the pre-filing process and did sufficient 
outreach, that their problems were likely to be less difficult 
and they might meet faster timelines. Is that right? Did I----
    Mr. Moeller. Correct.
    Mr. McNerney. --understand that correctly?
    Mr. Moeller. Yes.
    Mr. McNerney. Thank you.
    Commissioner Moeller, the FERC data shows that, from 2009 
to 2012, the Commission approved 69 major natural gas pipeline 
projects spanning 3,000 miles in 30 States. Does that sound 
about right?
    Mr. Moeller. Sounds about right.
    Mr. McNerney. Well, when the CEO of Dominion Energy 
testified on behalf of the Interstate Natural Gas Association 
of America in May, he told this subcommittee that the industry 
can add new pipeline capacity in a timely, market-responsive 
manner and that the interstate natural gas pipeline sector 
enjoys a favorable legal and regulatory framework for the 
approval of new infrastructure.
    His conclusion was that the natural gas model works, and I 
was wondering if you thought that that situation had changed 
since May.
    Mr. Moeller. The only thing I would add is that we really 
lack sufficient capacity in the Northeast. And the typical 
financing model was long-term contracts for local gas 
companies, and the new demand is electric generation that is 
driving a lot. And that financing model doesn't work in the 
Northeast, and we need more pipe in the Northeast. So that is 
something we are struggling with.
    Mr. McNerney. OK. Thank you.
    Mr. Dingell. Would the gentleman yield?
    Mr. McNerney. Yes.
    Mr. Dingell. I don't believe that this bill addresses that 
problem, does it?
    Mr. Moeller. Congressman, no, this is not specific to that. 
Correct.
    Mr. Dingell. It does not address that problem. All right, 
thank you.
    Mr. Moeller. I didn't mean to imply that it did. I am 
sorry.
    Mr. McNerney. Thank you.
    Well, the pipeline industry told us that the permitting 
process works. They reiterated today that the process is 
generally very good.
    The GAO recently examined the issue, as well, and the GAO 
found that the permitting process for interstate natural gas 
pipeline is consistent. Do you agree with the GAO that FERC's 
permitting process is consistent for pipelines?
    Mr. Moeller. Yes.
    Mr. McNerney. Well, it takes FERC an average of 9-1/2 
months to decide on an application for pipeline certification, 
but not all projects are clearly the same. The permitting 
process applies to applications for a single compressor station 
and to a short extension of existing pipeline. It also applies 
to, say, a 500-mile pipeline with multiple compressors that 
goes across many rivers.
    As you pointed out in your testimony, the more complex 
projects take longer to permit than the smaller projects. Is it 
realistic to think that the permitting process for every 
project, no matter how complex, can be completed within 12 
months?
    Mr. Moeller. Well, my impression is that we can do that if 
the bill becomes law.
    Mr. McNerney. Well, the bill doesn't start the clock until 
the application is completed. It starts the clock when FERC 
issues a notice that an application has been filed, even if it 
isn't completed; is that right?
    Mr. Moeller. Yes. I mean, referencing my earlier point, 
clarifying that we can deem an application complete would be 
very helpful.
    Mr. McNerney. Do you think there is a risk that 
applications will be denied for insufficient time?
    Mr. Moeller. That is something we have to be vigilant 
about.
    Mr. McNerney. And do you think it is realistic to expect 
other agencies to issue permits within 90 days or even 120 days 
if the application filed with them are not complete?
    Mr. Moeller. If it is not complete, no. If it is complete, 
yes.
    Mr. McNerney. OK, thank you, Mr. Chairman. I yield back.
    Mr. Whitfield. At this time, I recognize the gentleman from 
Texas, Mr. Barton, for 5 minutes.
    Mr. Barton. Thank you, Mr. Chairman.
    It is always good when honesty breaks out here at the 
subcommittee. I appreciate the Commissioner's admittance that, 
if we pass the law, he would enforce it. That is a noble thing 
in the Obama administration, so we are glad to know that.
    You know, back in 2005, Mr. Dingell and Mr. Green, I think 
Mr. Barrow maybe was on the committee, Mr. Whitfield, myself, 
Mr. Pitts, Mr. Terry, we all passed this Energy Policy Act in 
2005. And we gave the FERC additional authority, let the FERC 
kind of coordinate and serve as the quarterback, but we didn't 
give enforcement, we didn't put in penalties for noncompliance. 
Because the assumption was, if we required this coordination, 
that all the various agencies that had to coordinate and 
cooperate in what is considered to be a complex and complicated 
permitting process would comply. Well, that has apparently 
turned out not to be.
    Do you agree that the current law, as written, does not 
give the FERC any meaningful enforcement authority when other 
agencies fail to comply with the various deadlines and 
requirements under the current law?
    Mr. Moeller. I would concur.
    Mr. Barton. OK.
    Now, the solution that Mr. Pompeo has come up with is to 
give a certain amount of time and, if they don't comply, then 
it is just deemed or decided that their failure to act means 
they approve it.
    Would the FERC have a different enforcement mechanism than 
that? Is there something that is not in the bill, that, instead 
of saying, we will give you so much time with a possible 
extension but after that period of time we are going to assume 
that those agencies don't have a problem and move forward? 
Would you prefer some different mechanism, or would FERC prefer 
some different mechanism?
    Mr. Moeller. We haven't discussed any alternative.
    Mr. Barton. Then are you satisfied that the bill as written 
is acceptable?
    Mr. Moeller. I believe that if it became law, it would add 
a level of accountability to the resource agencies. But we 
would all have to be vigilant to make sure that they didn't 
have the incentive to just deny permits or add burdensome 
conditions as a way of essentially covering themselves.
    Mr. Barton. Well, we have a good problem, in that the 
United States is blessed with abundant supplies of natural gas, 
and they are geographically well-situated, close to potential 
markets. It is a clean-burning fuel, it is an environmentally 
benign fuel.
    So if we can come to some understanding of what an 
acceptable permitting process is, give everybody that is a 
stakeholder an opportunity to participate in the process, but 
if projects appear to be mutually beneficial to both the 
supplier and the consumer, that they should go forward, we are 
going to have a great outcome for this country.
    And this bill attempts to, I think, create a balance 
between all the various competing interests so that these 
projects can move forward unless there is really a problem. And 
some on the more liberal side of the agenda just don't want 
these projects to go forward under any circumstance. It is not 
a gas pipeline, but you see it in the Keystone pipeline.
    So I think the Pompeo bill is a good step forward. And I 
hope, Mr. Chairman, that we mark it up expeditiously at the 
subcommittee, full committee, on the floor, and send it on the 
other body. This would serve as a good example to the American 
people that the Congress can solve problems and do things that 
are mutually beneficial for the entire country.
    And, with that, I yield back.
    Mr. Whitfield. Thank you, Mr. Barton.
    At this time, I recognize the gentleman from California, 
Mr. Waxman, for 5 minutes.
    Mr. Waxman. Thank you, Mr. Chairman.
    I just want to clarify for the record, people aren't 
against pipelines per se, and my opposition to the XL pipeline 
is not because it is a pipeline, but because of additional 
greenhouse gases that would be expended just to get that dirty 
tar sands oil ready to be put into a pipeline.
    But that does raise the question of a legislation that was 
adopted by the Congress, where there was an absolute deadline 
for the President to approve it, and he said he couldn't do the 
analysis in time so he disapproved it. And I think that is the 
point that Mr. Moeller was just making, and others, that you 
may get the opposite of what you hoped for.
    Before an interstate natural gas pipeline can be built and 
operated, it has to get a permit from FERC. And the Pompeo bill 
amends the Natural Gas Act to establish a 12-month deadline for 
FERC to act one way or the other.
    Under these same rigid deadlines, we would have the same 
situation apply to every project, whether it is a 
straightforward 30-mile pipeline in the middle of nowhere that 
crosses no rivers or a complex 500-mile pipeline that goes 
through a major population center and crosses a dozen rivers.
    Commissioner Moeller, I appreciate your testimony, but I 
want to ask a question for Mr. Wright.
    Mr. Wright, you are a senior member of FERC's nonpartisan 
career staff, aren't you?
    Mr. Wright. Yes.
    Mr. Waxman. The FERC staff works on pipeline applications 
every day. You work on the easy ones and the more difficult 
ones. Do you believe that it is feasible for FERC to make a 
decision within 1 year of the notice of application for every 
complex pipeline project?
    Mr. Wright. I believe 12 months is adequate when FERC 
determines that it has a complete application before it.
    Mr. Waxman. So sometimes FERC takes longer because you 
don't have a complete application.
    Mr. Wright. Correct.
    Mr. Waxman. Which means the company didn't give you all the 
information you need; is that right?
    Mr. Moeller. Yes.
    Mr. Waxman. Well, maybe they would just as soon run out the 
clock and get an automatic approval.
    The bill doesn't start the clock when the application is 
complete. It starts the clock when FERC issues a notice that an 
application has been filed even if it isn't complete; isn't 
that right?
    Mr. Wright. That is correct, sir.
    Mr. Waxman. Before FERC can make a final decision on an 
application, you not only have to do an environmental analysis 
but engineering and rate reviews; isn't that right?
    Mr. Wright. That is correct.
    Mr. Waxman. These are important reviews to ensure that the 
environment, public health, and safety are protected. They are 
also necessary to make sure that rates are fair and reasonable.
    Mr. Wright, if FERC could not complete the required 
analysis and certificate work for a project within the 12-month 
deadline established by this bill, what would happen? Would 
FERC have to dismiss the application?
    Mr. Wright. That would be a likely outcome if we are not 
satisfied with the environmental review that we have come to at 
that point in time and the review of the other matters that 
would be before us.
    Mr. Waxman. So this bill aimed at speeding up FERC 
permitting could actually end up having the opposite effect. A 
project that could have been approved in 15 months, let's say, 
may just get denied if FERC is required to make a final 
decision in 12 months before it is ready to issue a 
certificate.
    Mr. Wright, the bill also establishes a 90-day deadline for 
all other agencies to approve or deny their permits once the 
environmental review is complete. If they fail to do so, the 
permits are automatically granted. Do you think other agencies 
may end up denying permits that would otherwise have been 
approved because of this deadline and automatic issuance 
provision?
    Mr. Wright. That is a possible outcome.
    Mr. Waxman. If this bill became law, do you think it would 
actually result in interstate natural gas pipelines being 
permitted faster than they are today, or could it backfire and 
create problems and permitting delays?
    Mr. Wright. I don't believe it would effectively cause 
pipelines to be permitted faster than they are now. And, quite 
possibly, if we would have to deny an application, it could 
take longer for certain projects,
    Mr. Waxman. Well, I thank you for your answers to these 
questions.
    The current system is getting pipelines permitted. This is 
what we want. This bill could result in slower permitting while 
also threatening safety, health, and environmental protections. 
That shouldn't be what we want.
    This bill has not been thought through. It certainly is not 
ready to go to the floor this month. The committee should take 
the time to really understand the current permitting process 
before making changes that will have serious consequences.
    Thank you, Mr. Chairman. I yield back my time.
    Mr. Whitfield. I would like to remind the Members that Mr. 
Wright is not here as a witness today. He is here to lend 
technical support to Commissioner Moeller.
    And since Mr. Waxman addressed all of his questions to Mr. 
Wright, Mr. Moeller, do you have any comment to any of his 
questions that you would like to----
    Mr. Waxman. Mr. Chairman, I would like to hear what Mr. 
Moeller has to say, but Mr. Wright is there with the nitty-
gritty----
    Mr. Whitfield. Mr. Wright is not here as a witness. He is 
here to lend technical support.
    Mr. Waxman. He was here at our request.
    Mr. Whitfield. Well, look, you heard him, and now I am 
going to give Mr. Moeller an opportunity to respond since he is 
the witness.
    Mr. Waxman. Well, that is fine. Let's hear from Mr. 
Moeller.
    Mr. Moeller. Let's see. The 12-month deadline, we think, as 
I said earlier, as long as we feel that an application is 
deemed complete, it is a deadline that we have been assured we 
can work around. And to the extent that that adds certainty, 
that is a good thing. The agencies, it seems to me that more 
accountability toward them is a good thing.
    We are trending toward needing more pipelines based on 
domestic supply, and, frankly, we are burning a lot more gas to 
make electricity. So, as trend lines go, I appreciate the 
committee's focus on this.
    Mr. Waxman. Do you think we should start the 12 months 
after the application is complete?
    Mr. Moeller. Yes.
    Mr. Waxman. Thank you.
    Mr. Whitfield. At this time, I would like to recognize the 
gentleman from Ohio, Mr. Latta, for 5 minutes.
    Mr. Latta. Well, thanks very much, Mr. Chairman.
    And thanks very much to our witness for being here, and the 
technical witness.
    You know, the questioning has been very interesting this 
morning. It is also kind of interesting, this morning there was 
an article in the Akron Beacon Journal, which is on the other 
side of the State from me. I am from northwest Ohio. And the 
article was kind of interesting. The headline is ``Shale Boom 
Creating Shortage of Affordable Housing in Eastern Ohio.'' And 
reading through the story, it is talking about the reason for 
that is because of all of the drilling company workers that are 
coming in. And a lot of places around the State of Ohio would 
very much like to be in a situation to say that they have a 
problem out there because there is just not enough housing.
    And so, you know, as we look at what is happening in Ohio 
and especially with our Utica Shale and what is happening 
across our State, I think one of the questions that the 
chairman had started off with a little bit earlier was a 
question, he had mentioned and asked, you know, was there a 
need to speed up the process? And I believe that, if I 
understood it right, you said that you are probably looking at 
there is going to be a need for more pipelines across the 
country.
    And have you done any type of analysis of how much, you 
know, let's just say looking down the road in that crystal ball 
5 years or 10 years, of what we are looking at and what we are 
going to need in more pipeline across the country?
    Mr. Moeller. I don't think FERC has done that specifically, 
but I know you will be hearing from some industry witnesses 
later. And I know there are a number of studies that 
particularly the pipeline association has undertaken looking at 
those projected numbers.
    Mr. Latta. But any kind of an idea off the top of your head 
of what those numbers might be?
    Mr. Moeller. I have seen their numbers, but I wouldn't want 
to misquote them. But, as you noted, with this supply coming in 
places that we didn't expect even a few years ago, there will 
be a great opportunity to expand pipelines for consumers' 
benefit.
    Mr. Latta. OK.
    And just also, the chairman had also asked about on the 
pre-filing process of projects, I am just curious on that. In 
your testimony, you said that all natural gas pipeline 
developers should take advantage of the Commission's pre-filing 
process but not all do so.
    Any idea of how many, you know, percentage-wise, take 
advantage of the pre-filing?
    Mr. Moeller. Mr. Wright tells me 70 percent in the last 
year.
    Mr. Latta. Seventy percent? And could I ask, just following 
up on that, how much more time does that add to the overall 
process? Does it lengthenit? Does it help shorten? What are we 
looking at?
    Mr. Moeller. Oh, it helps shorten the process, because, 
again, a lot of the issues and perhaps some misunderstandings 
between the developer, the Commission staff, and the 
stakeholders have an opportunity to be resolved before the 
formal written-only communication requirements kick in.
    Mr. Latta. OK.
    And just also kind of out of curiosity, are these large 
pipelines or developers? Are they small? Or is there kind of a 
mix of everybody that might be out there?
    Mr. Moeller. Related to pre-filing?
    Mr. Latta. Right.
    Mr. Moeller. Well, I think every project developer should 
take advantage of it, and the larger ones especially. But I 
think most of the larger ones do. It is, I think, to their 
detriment if they don't.
    Mr. Latta. I mean, when you are talking about ``to their 
detriment,'' not to dwell on one area, but I am just kind of 
curious, does it reduce the cost quite a bit? Or what happens 
in that pre-filing? When you look at, you know, trying to get 
the timeline down and make sure the paperwork that would be 
involved is there, is there a cost reduction to the developer 
in the end? Or what would you say on that?
    Mr. Moeller. I think almost universally, because, again, if 
you have a misunderstanding that has to be resolved in writing, 
it is so much less efficient than doing it in another manner 
ahead of the formal application filing. So I think it saves--
and I think the industry would testify to the fact that it 
saves a lot of money and time if they take advantage of it.
    Mr. Latta. Thank you very much, Mr. Chairman. I yield back 
the balance of my time.
    Mr. Whitfield. The gentleman yields back the balance of his 
time.
    At this time, I recognize the gentleman from Michigan, Mr. 
Dingell, for 5 minutes.
    Mr. Dingell. Mr. Chairman, I thank you for your courtesy.
    These questions to Mr. Moeller.
    The new subsection 1 created by this bill would require 
that FERC approve or deny certificates of public convenience 
and necessity within 12 months.
    Can you tell me approximately what percentages of these 
certificate requests currently take longer than 12 months?
    Mr. Moeller. Approximately 10 percent.
    Mr. Dingell. OK. Why?
    Mr. Moeller. Their complexity, usually. Sometimes----
    Mr. Dingell. What does this do about those complex 
questions? Does it give the Commission more authority, more 
money, or anything to help them achieve a quicker solution to 
those difficult and complex requests?
    The answer is ``no,'' isn't it.
    Mr. Moeller. I think with the addition of the certainty of 
an application being deemed complete, that 12-month deadline 
would----
    Mr. Dingell. But if it is not----
    Mr. Moeller. --provide some certainty.
    Mr. Dingell. But if it is not, that is going to cause 
considerable delay, is it not?
    Mr. Moeller. We think that would improve the bill.
    Mr. Dingell. Would improve the bill. Thank you.
    Now, Commissioner, the new subsection (j)(2) allows 
agencies to request that FERC grant a 30-day extension if the 
agency needs more than 90 days to approve permits required by 
such laws as the Clean Water Act and the Endangered Species 
Act.
    Do you believe that FERC has the technical expertise and 
understanding to determine if a Federal or State agency issuing 
permits required by these and other acts do or don't need 
additional time, yes or no?
    Mr. Moeller. Yes.
    Mr. Dingell. Now, you do have a problem here, however, with 
the fact that a lot of authorities are delegated by the Federal 
Government to the States, such as clean air, clean water, and 
others, where the States are permitted to take action under a 
coordinated program of Federal-State cooperation; isn't that 
right?
    Mr. Moeller. Yes.
    Mr. Dingell. What is this bill going to do to those 
matters?
    Mr. Moeller. Well, it would apply the deadlines to those 
agencies, as well.
    Mr. Dingell. Even if the State deadline might be different 
and even if the problem that the State confronts is more 
difficult and complex?
    Mr. Moeller. That is how I read the bill.
    Mr. Dingell. Now, as you know, more utilities are planning 
on building new natural-gas-fired plants. In order to do so, 
they will need more pipeline infrastructure to support these 
plants.
    Do you believe that the FERC has funding, staff, and 
expertise to consider future applications in a timely manner, 
yes or no?
    Mr. Moeller. For now, yes.
    Mr. Dingell. But in the future probably not, right?
    Mr. Moeller. I think the way things are trending--and Mr. 
Wright could elaborate more--I would be happy to have the 
problem of more applications----
    Mr. Dingell. OK.
    Mr. Moeller. --than the need for more----
    Mr. Dingell. So in the future you are looking at a problem. 
Thank you.
    Now, the chair has said that I can't ask questions of Mr. 
Wright, so I am going to ask these questions of you.
    Are all applications submitted to FERC for pipeline 
projects the same, yes or no?
    Mr. Moeller. No.
    Mr. Dingell. That is, they are not, then, all the same 
length? They deal with different links in the pipeline, 
different kinds of terrain, different problems, such as being 
under the ocean or under bodies of water and so forth? And that 
is correct, is it not?
    Mr. Moeller. That is correct.
    Mr. Dingell. Does FERC receive incomplete applications 
requiring additional information from the applicant, yes or no?
    Mr. Moeller. Yes.
    Mr. Dingell. Is there a deadline for which applicants need 
to submit complete application information?
    Mr. Moeller. Yes, in the data requests.
    Mr. Dingell. Is that an absolute complete submission that 
you can require, or does that still leave you holes in the 
information that you need?
    Mr. Moeller. Well, if there are holes, we won't grant the--
we won't make----
    Mr. Dingell. So that means delay. It means you will reject 
the application, because you had no choice under the 
legislation.
    Now, if FERC were not able to complete its due diligence 
review within 12 months, as required under the proposed 
legislation, do you believe that more applications would be 
denied?
    Mr. Moeller. No.
    Mr. Dingell. But there would be denials because of this, 
would there not? You have already indicated that.
    Mr. Moeller. I think it would depend on each application.
    Mr. Dingell. Now, we have some other problems. I am about 
running out of time here. But I thank you for your assistance 
to the committee.
    Mr. Chairman, I thank you for your courtesy.
    Mr. Whitfield. Thank you, Mr. Dingell.
    At this time I recognize the gentleman from Kansas, Mr. 
Pompeo, for 5 minutes.
    Mr. Pompeo. Thank you, Mr. Chairman.
    Thank you, Mr. Moeller, for your testimony today. I take to 
heart your concern about the application being completed, 
deemed full and complete. I just want to make sure that I 
understand the pre-filing process. This is an extensive process 
when it is used, lots of back and forth, including 
environmental concerns. Lots of issues are resolved in that 
pre-filing time period in a way that----
    Mr. Moeller. Correct.
    Mr. Pompeo. And stakeholders are also notified during the 
pre-filing process, so we bring all the relevant folks that are 
concerned about a particular pipeline and have an interest in 
that pipeline, have a chance to engage during that pre-filing 
process when a company chooses to engage in the pre-filing?
    Mr. Moeller. Yes.
    Mr. Pompeo. How long does that take typically?
    Mr. Moeller. Well, it varies widely depending on the 
complexity of the project. I would imagine it has ranged from 
maybe 6 to 12 months generally.
    Mr. Pompeo. So this is not a shotgun deal. This is a long, 
thoughtful, lots of engagement process when done properly----
    Mr. Moeller. Correct.
    Mr. Pompeo. --where all stakeholders get an opportunity----
    Mr. Moeller. Right.
    Mr. Pompeo. --to state their case and make their arguments, 
and improve the process and improve the pipeline pathway and 
make sure we are doing all the things, including protecting the 
environment, complying with all the relevant statutes?
    Mr. Moeller. Precisely.
    Mr. Pompeo. Why do you think some companies choose not do 
that?
    Mr. Moeller. They may not be aware of it.
    Mr. Pompeo. So these are typically smaller, the folks who 
choose not to, is it fair to say they are typically smaller 
pipelines, less sophisticated businesses perhaps? I mean, to 
not be aware of a pre-filing opportunity.
    Mr. Moeller. Yes. I think typically that is right. Some 
have chosen not to, but I think they have missed an 
opportunity.
    Mr. Pompeo. Yes.
    Mr. Moeller. Oh. Those that have--that are perhaps newer to 
the development----
    Mr. Pompeo. Sure. Sure. Yes.
    Mr. Moeller.--don't realize the advantages of it.
    Mr. Pompeo. I mention all this, because I think it is 
important in the context of these deadlines, which to someone 
who didn't--was unaware of this, this extended process might 
think 90 days or 12 months was too short a time period. It has 
been fascinating to listen to some folks here today who 
normally object to things be concerned about denial of permits 
and think this piece of legislation is a bad piece of 
legislation because it might delay a permit. I am thrilled to 
hear now that some folks on the other side are concerned about 
delaying of the permitting process. It may be the first time in 
my 30 months at Congress that I have heard that.
    I wrote this in a way that I thought it would be 
bipartisan. All I was trying to do was get deadlines 
established and, as you talked about, accountability inside the 
other agencies; really not as much about FERC, but about the 
other agencies that require permits.
    I want to come back to something Mr. Barton asked. So in 
the alternative of setting a deadline--and 90 days, I will 
concede we could make it 91 or 89, I will concede that 90 is in 
some sense arbitrary, but I think it is important to have that 
deadline.
    In the alternative, what are the other mechanisms to tell 
these agencies to just do their job?
    Mr. Moeller. Essentially people could bring an action 
against them in some----
    Mr. Pompeo. You mean go to litigation?
    Mr. Moeller. Yes.
    Mr. Pompeo. Yes. That is why I think this is absolutely 
important. And to your point, I think directing these agencies 
to be accountable and prioritize this permitting process needs 
to be done and needs to set these deadlines in a way that is 
meaningful. And I am happy if we need to talk about the 
trigger, the start point, I am happy to consider that.
    The last thing, and this is a bit of a tangent, I just want 
to talk about reporting and data. In 2013, GAO stated that it 
had these public records to get at the actual length of the 
time that permitting process took for projects and to be 
approved by FERC. Do you think that in order to provide a 
better understanding of the time it takes to get the real good 
data that it would be appropriate to begin actual tracking 
inside of FERC of how long these processes take and maybe 
inside of each of the agencies as well?
    Mr. Moeller. We have--I think we have hopefully done a good 
job of adding some transparency by tracking information on our 
Web site.
    Mr. Pompeo. Right. I appreciate that.
    Mr. Moeller. But generally, yes.
    Mr. Pompeo. Thank you. Mr. Chairman, I yield back.
    Mr. Whitfield. The gentleman yields back. At this time I 
would like to recognize the gentleman from Texas, Mr. Green, 
for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman.
    And I know my earlier statement, I appreciate being able to 
have part of the opening statement, but Mr. Moeller, in a 
question from our--from Chairman Dingell, you have a 90 percent 
approval rate of applications once they are deemed within the 
year already?
    Mr. Moeller. A decision on 90 percent within 12 months.
    Mr. Green. Within 12 months. I wish we had other Federal 
agencies that had that kind of record. And I know FERC's 
problems. And like I said earlier, you heard I had problems 
with FERC many years ago, but the problems I had were fixed, I 
mean, early part of 2001, 2002. Of course, in Texas, we had to 
live with Enron and part of the problems that deal with that, 
but I knew you were doing a good job, because I wasn't getting 
complaints from any of my companies, but 90 percent approval 
rate is amazing.
    One of the concerns I have, and I know the Corps of 
Engineers and EPA has provided technical comments on the bill. 
They raised concerns that automatic permitting would lead to 
permits that are inconsistent with requirements with the Clean 
Water and Clean Air Act. This committee doesn't control 
resources to the Army Corps of Engineers and EPA; our 
appropriations process does that. And if either FERC doesn't 
have the appropriations or those agencies don't have it, you 
know, by setting arbitrary time limits means that it could 
possibly just be denied. Is that correct?
    Mr. Moeller. That is a potential, yes.
    Mr. Green. So that is an option. If you don't make the year 
and the information is not available, you end up denying it 
because some agency--and that is not just Federal agencies. For 
example, I know one of my questions I want to get to is that 
some States have one-stop agency designations, and I assume 
those are much quicker in responding, but what if a State 
doesn't respond, and, of course, Congress doesn't control those 
States and we don't want to, so we are--there is a lot of 
moving targets in this issue, but let me ask some particular 
questions.
    You and your staff interact with other agency and State 
permitting every day. And let's say that the agency couldn't 
finish preparing a permit before the 90-day deadline, and that 
would mean the unwritten permit would automatically take effect 
or would it be denied?
    Mr. Moeller. I believe the bill has another 30-day 
potential extension.
    Mr. Green. OK.
    Mr. Moeller. And then under the bill, as I read it, it 
would be deemed approved.
    Mr. Green. Even if there was no control by FERC or on a 
State agency not responding or another Federal agency?
    Mr. Moeller. That is how I read the legislation.
    Mr. Green. My other concern, I said earlier, is increased 
litigation. If something is approved and there is something 
left out, it is deemed approved, you know, we just move it from 
an agency that is a regulatory agency to a courtroom. And if 
you think you have regulatory delay, go to even a State court 
system, but a Federal court system, it will be delayed even 
more.
    One part of the bill that I don't have a huge interest--or 
issue with is it codified the 90-day deadline. And that said, 
there is some of the concern. I would hope that before this 
bill gets out, and we are going to have a markup this 
afternoon, we would at least make sure that that application is 
deemed complete before the time frames run, and simply because, 
again, I look at this that a solution in search of a problem is 
you have a 90 percent approval rating, but----
    Mr. Dingell. That could be a problem.
    Mr. Green. Yes. But if we are going to do something, let's 
don't mess up a system that is working 90 percent of the time.
    And, Mr. Chairman, I will be glad to yield back my time.
    Mr. Whitfield. The gentleman yields back. At this time I 
would like to recognize the gentleman from Virginia, Mr. 
Griffith, for 5 minutes.
    Mr. Griffith. Thank you, Mr. Chairman. So here is the 
question I would have. If we are going to define and if we 
decided we wanted to change that the time starts when the 
application is complete, when is the application complete? And 
let me preface that by saying that I have had some experience 
with a different agency or different agencies where my 
constituents think they have got everything complete, and then 
a new request comes in from the agency and then we get that 
complete, and then another request comes in from the agency. So 
I just want to make sure that if we go down that path we are 
not setting ourselves up for failure. So when would the 
application be complete under your projections or thoughts?
    Mr. Moeller. Well, I think Mr. Wright could probably come 
up with some very specific examples, but I know that we have 
had applications come in and perhaps part of the environmental 
review is somewhat deficient, and in that sense if we enter the 
pre---if we enter the application period, as I referenced 
earlier, it is just a lot more inefficient to get that resolved 
in writing. So it will depend on each different project, but it 
is going to be, I think, largely environmental-related studies 
or--yes. There are potential rate-making issues that could be 
hanging out there. Most of those get resolved, at least 
discussed, ahead of time in terms of making sure there isn't 
subsidization of an expansion by existing customers of 
relatively detailed but important matters.
    Mr. Griffith. Yes. And I guess my one concern with 
deviating from the bill as it is currently written is that I 
wouldn't want to get into a situation where there were just a 
series of new requests, and would maybe want to see some 
limitation----
    Mr. Moeller. Understood.
    Mr. Griffith. --placed on that. That being said, I do 
appreciate that, you know, folks can talk these things out 
before the official process starts. That always is very 
helpful.
    With that, Mr. Chairman, I yield back.
    Mr. Whitfield. The gentleman yields back. At this time I 
recognize the gentleman from New York, Mr. Tonko, for 5 
minutes.
    Mr. Tonko. Thank you, Mr. Chair.
    Mr. Moeller, in your testimony, you indicate there were 
some 548 applications submitted since 2009. How many fell into 
the Prior Notice/No Protests category?
    Mr. Moeller. A total of 75 over those years.
    Mr. Tonko. OK. Thank you. And would the replacement of an 
existing pipeline go through the same project approval as a new 
pipeline?
    Mr. Moeller. Yes.
    Mr. Tonko. What proportion of applications is for the 
replacement of existing pipelines versus entirely new lines, 
would you suggest?
    Mr. Moeller. We can get you those numbers. In terms of an 
actual replacement?
    Mr. Tonko. Yes.
    Mr. Moeller. Relatively few. In terms of additions to 
existing pipes, such as updated compressors or--there are many 
more of those.
    Mr. Tonko. Do replacement pipeline projects in general take 
the same amount of time to approve as new pipelines?
    Mr. Moeller. I think it depends on their environmental 
impacts in terms of where they are going and how much land they 
disturb.
    Mr. Tonko. And in your experience, would you say that 
pipeline projects in areas of higher population density are 
more likely to fall into your second category----
    Mr. Moeller. Oh, yes.
    Mr. Tonko. --that being protests and policy issues and 
major construction?
    Mr. Moeller. Yes. Absolutely.
    Mr. Tonko. OK. It appears the areas that are deficient in 
pipeline infrastructure currently are areas with higher 
density, for example, areas like the Northeast, because of the 
increased gas development in the Marcellus Shale and a strong 
demand for gas in that region. Is that the case?
    Mr. Moeller. Well, that is part of it, but as I referenced 
earlier, part of the challenge in the Northeast is that the new 
growing use of electricity there is--of natural gas is to make 
electricity, and the financing model traditionally for 
pipelines has been that the local distribution company enters 
into long-term contracts to get the pipe built.
    The new demand in New England is generators who may or may 
not be called on a daily basis, so they can't be expected to go 
into long-term contracts. So we have that kind of conundrum of 
needing more pipe in the Northeast, but the traditional 
financing model really doesn't apply to the new demand.
    Mr. Tonko. OK. Well, if we have different categories of 
pipeline projects with differing circumstances, it seems to me 
that this one-size-fits-all policy for project consideration is 
likely to shortchange those projects that are the most complex 
to the highest density areas or are perhaps controversial.
    I am very concerned about pipeline safety. I had 
represented when I was in the State legislature in New York 
areas that were impacted by serious pipeline failures that cost 
people their lives. It seems to me that an average approval 
time of a little over a year for a pipeline that will operate 
for some, what, 4 to 5 decades, perhaps, is simply not 
unreasonable.
    Your comments to that statement.
    Mr. Moeller. I think it will highlight the need for the 
pre-filing process and that to be thorough, extensive and 
aggressive public outreach for any such projects. Those issues 
will be highlighted under a 12-month timeline.
    Mr. Tonko. But even in light of, as was earlier discussed, 
some of the track record, that track record at the agency, are 
we sacrificing at the expense of pipeline failure?
    Mr. Moeller. Well, I don't think so. I think we have had a 
pretty good record in terms of how we deal with applications; 
as I noted, the 90 percent. The trend is that we are getting 
more of them, though, so that is something to keep in mind.
    Mr. Tonko. OK. With that, Mr. Chair, I will yield back.
    Mr. Whitfield. The gentleman yields back. At this time I 
recognize the gentleman from Nebraska, Mr. Terry, for 5 
minutes.
    Mr. Terry. Thank you for being here. I always appreciate 
your efforts to keep us updated. I am just curious, when we 
talk about the protest and no protest, out of an--in let's say 
a year's time, how many of the projects will be protested?
    Mr. Moeller. Well, I have a total here of in fiscal year--
well, for the last 5 years, basically the ones that haven't 
been protested average right about 75.
    Mr. Terry. Yes. I know. Those are the number of days. I am 
asking for the number of--you take the total number of 
applications, how many of the applications are actually 
protested?
    Mr. Moeller. We will get you that number, but I think it is 
more and more, generally.
    Mr. Terry. Yes. I would not be surprised that it is more 
and more, and then that begs the question of who is filing 
these complaints or protests.
    Mr. Moeller. Well, on major projects, they are going to be 
economic and, you know, market issues that are worthy of 
shippers and perhaps other entities being involved. In terms of 
smaller projects, we have seen more sophisticated public 
outreach in terms of social media being concerned about, say, a 
compressor station. So it can range from major corporations to 
individuals.
    Mr. Terry. So is there an effort, do you see, by Sierra 
Club or the NRDC to file protests on each one of these 
projects?
    Mr. Moeller. You know, we can get you that. I think, 
generally speaking, everybody is more interested in 
infrastructure, perhaps, than they used to be.
    Mr. Terry. That is kind. Genteel.
    Then another area, now for something completely different 
than who is protesting and why, but I just received an email as 
I have been sitting here from Sapp Bros, which is a small chain 
of truck stops along Interstate 80 in the Midwest headquartered 
in my district inviting me to one of their high volume CNG 
pumps that they are putting in at their stations.
    You have mentioned the additional need for natural gas 
pipelines to electric generators and with the new rules and 
regulations coming down from the EPA, from the White House, 
there will be even more pressure on natural gas. So my question 
is, has FERC started looking ahead at way--towards ahead to the 
future pipeline, gas pipeline needs in this country as natural 
gas will be used more for transportation and electrical 
generation?
    Mr. Moeller. Well, specifically we haven't done any 
projections, but industry entities have. As I think you know, 
one of my major concerns has been the fact that we are 
transitioning so quickly to using more natural gas. And there 
are reliability issues there, they are not insurmountable, but 
it is a very different paradigm going from, frankly, a pile of 
coal to a just-in-time fuel delivery on a pipeline.
    Mr. Terry. Well, and that is part of my concern, is as the 
economy starts naturally moving to natural gas in 
transportation and then artificially from rules and 
regulations, the demand will be there and the infrastructure 
will be needed, so how do we get your agency to look forward? 
Is that something that we need to do legislatively in addition 
to the Pompeo bill?
    Mr. Moeller. I think that we can look to the industry 
projections for pipeline capacity. Your continued oversight of 
how we do our job is appropriate. I think we have done a good 
job, but as I referenced earlier, the trend is that we are 
getting more of these, and we need to stay on top of that, and 
so I welcome your oversight.
    Mr. Terry. All right. Thank you. Yield back.
    Mr. Whitfield. The gentleman yields back. At this time I 
would like to recognize the gentlelady from Florida, Ms. 
Castor, for 5 minutes.
    Ms. Castor. Thank you, Mr. Chairman.
    Thank you very much for being here. I want to focus on the 
part of the bill that says that permits automatically go into 
effect if agencies do not approve or deny the permits within 90 
days, because this kind of stuck out for me. Especially when 
you consider the complex projects, this provision appears to be 
very problematic, because I understand these permits are not 
simply yes or no, green light or red light. For example, a 
water discharge permit typically involves some limits, a clean 
air permit includes specific requirements such as emission 
limitations based on control technology or methods of 
operation. These permits can be very detailed documents, 
especially with the complex projects that need to be written by 
the agencies.
    And let's say we go to that scenario of complex project, 
the agencies could not complete their review and conditions 
within the 90-day deadline. Would that mean under this bill an 
unwritten permit would automatically go into effect?
    Mr. Moeller. I believe as the legislation is drafted, there 
is another 30-day option, and then, yes, as I read the bill, 
the permits would go into effect.
    Ms. Castor. Well, I think that is a major deficiency in the 
bill. I understand the need to boost efficient agency review in 
the drafting of the conditions, but I think that goes back to 
the point that was made earlier that this could potentially 
cause greater delays, especially for those complex projects.
    The Army Corps of Engineers and EPA provided technical 
comments on the bill. They raise concerns that automatic 
permitting could lead to permits that are inconsistent with the 
requirements of the Clean Water Act and Clean Air Act. This 
could lead to a violation of Federal statutes. Doesn't it 
make--does it make sense for a permit to be granted that could 
be in violation of Federal statutes? Don't you think that could 
be problematic?
    Mr. Moeller. That would be problematic.
    Ms. Castor. I would think so. We empower these agencies to 
assess the impacts of a project, set appropriate terms and 
conditions to protect the public interest and public health. 
And I think what has been established in the hearing today is 
that from 2009 to 2012, FERC has approved 69 major natural gas 
pipeline projects spanning over 3,000 miles and 30 States with 
a capacity of nearly 30 billion cubic feet per day. 90 percent 
of the permits are granted within a 12-month period.
    Commissioner, you testified there are a wide range of 
projects, that you would encourage companies to take greater 
advantage of pre-filing. Maybe we should be focused on how we 
encourage that to happen. We have testimony in the record now 
that this bill could result in greater delays due to the fact 
that denials are mandated, so I think on balance we have work 
to do here.
    There is a very important balance between making sure 
infrastructure is permitted and improved in the most efficient 
way, but it has got to be balanced against the health and 
safety standards, and I think this draft legislation just has 
not risen to the occasion. I think based on the evidence in the 
record, it could create greater problems. And I know that is 
not the intent of the author. I thank----
    Mr. Dingell. Would the gentlelady yield for a question?
    Ms. Castor. I would be happy to yield.
    Mr. Dingell. You just raised a very good point. So let's 
take a situation where my State or the gentlewoman's State has 
not complied with the requirements delegated to them by the 
Clean Air Act or the Clean Water Act, so they can't issue a 
necessary permit. FERC may then step in and issue the permit 
whether the State has acted on this matter or not and whether 
or not the Federal Clean Water or Clean Air Act has been 
implemented and approved in the State? Isn't that right?
    Mr. Moeller. Well, we wouldn't issue the permit in place of 
the State.
    Mr. Dingell. What makes you so sure?
    Mr. Moeller. Well, we have been in that situation before 
where a State has delayed a Clean Water Act permit for a 
pipeline, and we have deemed the application complete subject 
to that being resolved.
    Mr. Dingell. I want to thank you. To the gentlewoman, I say 
thank you for your courtesy.
    Ms. Castor. Thank you. And, Mr. Dingell, I think this also 
highlights a concern that it could lead to much greater 
litigation and this might be a great new employment act for 
environmental litigators out there.
    Thank you. And I yield back.
    Mr. Whitfield. The gentlelady's time has expired. At this 
time I recognize the gentleman from Texas, Mr. Olson, for 5 
minutes.
    Mr. Olson. I thank the chair. And Commissioner Moeller, it 
is good to see you again. Welcome.
    Mr. Moeller. Thank you.
    Mr. Olson. I hope you celebrated the Fourth of July with 
your family.
    Mr. Moeller. I did.
    Mr. Olson. Great. And speaking of celebration, America has 
a lot to celebrate in 2013, because we are at a turning point 
in our country's history. For the first time in my 50 years on 
this planet, we can actually become energy independent. We are 
finding new oil and new gas places all over America that 10 
years ago would have never been called energy States. North 
Dakota, the Bakken Shale play is the best example of that. Back 
home in Texas, shale plays seem to be doubling in size with 
each passing year. It is truly remarkable.
    And the benefits extend beyond the oil patch. I have seen 
it firsthand along the Rio Grande River in the Eagle Ford Shale 
play. Local school districts there do not have revenue to 
compete--did not have revenue to compete for admission to 
America's best universities, but now with the revenue school 
districts are getting with all the oil and gas development from 
the Eagle Ford Shale play, instead of floppy disks, these kids 
have laptops, they have iPads, they have a future, but all that 
development, that progress will stop if we allow those 
resources to stay stranded at the wellhead.
    Bureaucrats dither, and professional plaintiffs in the 
environmental community are looking to crank up lawsuits and 
take care--get involved with reviews of safe, important 
projects and grind them to a halt. That needs to stop, and that 
is why I am so thankful that we have this conversation today.
    Now, I have a handful of questions for you on pipeline 
infrastructure and permitting in the United States. And in the 
tradition of Chairman Dingell, I will ask you to answer a few 
questions with either yes or no answers.
    First question. Do you agree that we are relying on natural 
gas more today than ever before in our modern energy history?
    Mr. Moeller. I agree, yes.
    Mr. Olson. Yes, sir. Do you agree that increasing shale gas 
supply and increased use of natural gas for power generation 
are causing a need for new pipeline infrastructure?
    Mr. Moeller. Yes.
    Mr. Olson. Do you agree that infrastructure bottlenecks can 
contribute to or even cause a reliability crisis?
    Mr. Moeller. Yes.
    Mr. Olson. Does that fact make time and consideration of 
new or expanded pipelines for regulators even more important?
    Mr. Moeller. Yes.
    Mr. Olson. OK. No more yes or no questions, but as yet I 
heard complaints even at church this past Sunday from an 
employee of one of our oil companies, our power generators 
about the timeliness of reviews with regulation--some 
regulators. FERC has heard from groups with names like Stop the 
Pipeline and No Gas Pipelines dedicated to flooding your agency 
with sometimes trivial comments on individual pipelines. 
Knowing that, do you agree that some members of the 
environmental community have made it their mission to slow your 
good work?
    Mr. Moeller. Well, I don't know if it is their mission. 
There is a big debate going on out there, but as I said 
earlier, you need the infrastructure, the pipes and wires to 
get the energy to people for them to enjoy it, contribute to 
their quality of life.
    Mr. Olson. One more question, Commissioner. When FERC is 
considering a pipeline application, I know that you do all the 
lengthy reviews to ensure you meet all of your statutory 
requirements under the Natural Gas Act, however, I would like 
to know how you work with pipeline operators and project 
developers on their needs. Specifically if a project has to be 
completed in a certain time frame to guarantee reliability or 
meet some contractual deadline, does FERC have a way to take 
that into account?
    Mr. Moeller. Everyone would like their project done as soon 
as possible, so we have to balance the complexity of the 
project with the economic issues and try and do the best we can 
to get a thorough analysis of the application.
    Mr. Olson. Is there a way that we could involve the 
contractors, given these considerations, involved in the 
process without impacting the quality of your reviews?
    Mr. Moeller. I think emphasizing the pre-filing process 
that we talked about earlier.
    Mr. Olson. OK. I had some question on that, but I 
understand you hammered that, so I yield back the balance of my 
time. Thank you.
    Mr. Whitfield. The gentleman yields back the balance of his 
time. And I believe that concludes the questions for this first 
panel. I think Mr. Murphy is here to introduce someone on the 
second panel.
    So Chairman Moeller--I mean, Mr. Moeller, thank you for 
being with us today. And, Mr. Wright, we appreciate your being 
with us as well. We do value your comments and answers to our 
questions and we look forward to working with you as we move 
forward. So thank you all for joining us this morning.
    Mr. Moeller. Thank you for letting us.
    Mr. Whitfield. And you are dismissed at this time.
    Now I would like to call up the second panel of witnesses. 
I am going to introduce all of them except the gentleman that 
Mr. Murphy is going to introduce.
    First we have Mr. David Markarian, who is Vice President of 
Government Affairs for NextEra Energy. We have Ms. Maya van 
Rossum, who is the Delaware Riverkeeper, Delaware Riverkeeper 
Network. We have Mr. Rick Kessler, who is the President of 
Pipeline Safety Trust. And we have Mr. Donald Santa, who is 
President and CEO of INGAA.
    And at this time I would like to recognize Mr. Murphy for 
the purposes of an introduction.
    Mr. Murphy of Pennsylvania. Thank you, Mr. Chairman, and 
members of the subcommittee. I want to introduce Mr. Alex 
Paris. He is a good friend and a constituent of mine from 
Avella, Pennsylvania. Mr. Paris is a southwestern Pennsylvania 
success story. His company, founded by his grandfather I think 
in 1928, has its roots in coal mining and road building. Today 
it is a full service heavy construction firm employing hundreds 
of workers and laying thousands of miles of pipelines and 
helping to promote the safe development and secure transmission 
of natural gas from the Marcellus Shale, which is now the 
country's most productive shale play.
    My district is experiencing an economic revival because of 
the Marcellus Shale, which sits almost exclusively on privately 
held lands, but regulatory and permitting pipeline barriers are 
restricting job growth, especially in gas poor regions of the 
country that stand to benefit from access to Pennsylvania's 
natural gas. Those regions need gas to power their factories, 
provide the feed stock for important chemicals, heat their 
homes, and basically keep the lights on. As Mr. Parish will 
explain, the passage of a the Natural Gas Pipeline Permitting 
Reform Act could help to address this challenge and spur 
billions in new economic activity.
    So thank you for the opportunity to speak, Mr. Chairman, 
and I now turn it back to you. Thank you.
    Mr. Whitfield. Well, thank you very much.
    And I want to welcome all of the members of this second 
panel. We do look forward to your testimony, and each one of 
you will be given 5 minutes for an opening statement. And, Mr. 
Markarian, we will begin with you, so you are recognized for 5 
minutes for your opening statement.

  STATEMENTS OF DAVID MARKARIAN, VICE PRESIDENT, GOVERNMENTAL 
 AFFAIRS, NEXTERA ENERGY, INC.; RICK KESSLER, PRESIDENT, BOARD 
  OF DIRECTORS, PIPELINE SAFETY TRUST; DONALD F. SANTA, JR., 
  PRESIDENT AND CEO, INGAA; MAYA K. VAN ROSSUM, THE DELAWARE 
 RIVERKEEPER, DELAWARE RIVERKEEPER NETWORK; AND E. ALEX PARIS 
           III, DISTRIBUTION CONTRACTORS ASSOCIATION

                  STATEMENT OF DAVID MARKARIAN

    Mr. Markarian. Thank you, Mr. Chairman, Ranking Member 
Rush, members of the subcommittee. Dave Markarian, Vice 
President of Governmental Affairs for NextEra Energy, Inc., 
also known as Florida Power & Light for many years here in 
town. And I appreciate the opportunity to appear here today and 
testify in favor of this bill.
    NextEra is one of America's leading energy companies: 
15,000 employees; we operate one of the most diverse fleets in 
the U.S., natural gas, solar, wind, nuclear, coal and other 
fuels to generate electricity every day for millions of 
Americans. We are engaged in hydraulic fracturing in many of 
the shales across the U.S. We build pipeline, we build long-
distance, high voltage transmission lines. We operate the 
fourth largest nuclear fleet in the U.S., with commercial 
nuclear facilities in Florida, New Hampshire, Iowa and 
Wisconsin.
    Now, to the point, in the last 5 years alone, NextEra 
Energy has invested $27 billion in American infrastructure for 
this industry. That puts us in the top 10 of folks that have 
come forward and put their money on--bet on this American 
economy. These projects have created thousands and thousands of 
jobs and improved our ability to take advantage of domestic 
sources of fuels to generate electricity here at home. These 
are key ingredients, not just for supplying electricity, but 
for economic growth. One of the things that we have done the 
most of is to invest in natural gas.
    Now, we are probably better known as the largest wind 
energy company in the U.S., the second largest in the world, or 
the largest in solar, but the fact that we are sitting here 
today--we heard Chairman Upton talk about this bill having 
bipartisan support. This reflects--our presence here reflects 
that the support for this bill goes across fuel sources. So for 
a company like ours that uses everything, we are actually proud 
to sit here today and say that use of natural gas is saving 
customers across America billions of dollars. But just our 
company alone by investing in natural gas over the last so many 
years, we have reduced our import and use of foreign oil by 98 
percent, our customer bills are 25 percent below the national 
average, our Florida utility, which is about half of our 
business, serves about half of our State, about 9 million 
folks, and this is the key thing, delivers lower electricity 
prices, which does a few things: one, it encourages businesses 
to locate, grow or move to our areas where we serve; it gives 
people more money in their pocket so they can do more with it; 
it spurs economic growth, it spurs spending, it spurs saving 
and investment.
    If you have flown in and out of Fort Lauderdale, over the 
airport, we have got that classic smokestack configuration. 
Tuesday morning, 6:45 a.m., we blow those babies up and we 
build a brand-new facility that will burn natural gas. A 
billion dollars of our money will save our customers $400 
million just in the life of the plant. So we believe that it is 
really important to look ahead and get this fuel from where it 
is harnessed to where it is needed.
    And I have heard the comments today. And I think the point, 
NextEra's support of this bill isn't so much for today, it is 
for the future, it is for the next 20 and 30 years. Our 
industry plans to 20, 25, 30 years out. And I wasn't alive 
during the Eisenhower administration, but they built a highway 
system, but I was alive for Gemini and Apollo. And if this 
industry doesn't rise to the level of national priority yet, 
and I think it will, and so we have to get ready for it. We 
have to keep pace with this renaissance that we know is on the 
way.
    And I think what this bill does is it sets expectations. It 
requires that people and agencies think about staffing, that 
folks in Washington think about funding for staffing, and that 
everybody has an expectation of review that is certain.
    Now, I said in my testimony that sometimes a definite no is 
better than an interminable maybe, and I think that that is 
true. If you are going to do what we do for a living, sometimes 
it is good to know that you are not going to get it done and 
you move in a different direction. So there is four reasons 
why, in summary, we support this: one, this is a great 
opportunity for us; two, we think it is going to spur the 
economy; three, it is helping to save customers money; and, 
four, it helps us move things from where they are harnessed to 
where we need it.
    I also want to point out that the EEI, the Edison Electric 
Institute, which we are a member of, also supports this bill 
and there is wide industry support for the bill, and they have 
filed a letter in support.
    Thank you, sir.
    Mr. Whitfield. Thank you, Mr. Markarian.
    [The prepared statement of Mr. Markarian follows:]
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    Mr. Whitfield. And Ms. van Rossum, you are recognized for 5 
minutes.

                STATEMENT OF MAYA K. VAN ROSSUM

    Ms. van Rossum. Thank you. Good morning. My name's Maya 
van--is this on? Yes.
    Mr. Whitfield. Yes. Push the button to make sure it is on.
    Ms. van Rossum. Sorry. Good morning. My name is Maya van 
Rossum. I am the Delaware Riverkeeper, and my organization is 
the Delaware Riverkeeper Network. And I really appreciate the 
time to speak with you this morning about H.R. 1900. And I am 
actually here to ask you to please rethink the proposal, to 
rethink H.R. 1900 and not send it to the floor. H.R. 1900 will 
diminish critical protections for our communities and our 
environment and it will have unintended consequences.
    Ensuring full and fair environmental reviews and permitting 
of pipelines is critical, because of the enormity of the 
potential environmental impact from these projects. For 
example, just one portion of one recent pipeline as it passes 
through the Delaware River watershed will impact 450 acres of 
land, cross 90 water bodies and 136 wetlands and cut through 
two State preserve forests.
    By imposing an inflexible reduction in the time allowed for 
Clean Water Act 401 and 404 permitting or decision-making, H.R. 
1900 could compel the States and the Army Corps to deny more 
applications rather than work with applicants to remedy 
deficiencies and improve their projects, or alternatively, they 
could overlook deficiencies and issue legally dubious 
approvals.
    Our experience is that currently States will work with 
pipeline applicants to cure application deficiencies so as to 
ensure a fully informed 401 review. The time limitations in 
H.R. 1900 would inhibit such cooperation.
    The H.R. 1900 timeline will also diminish the time 
available for States to develop conditions necessary to support 
401 certification, resulting in either further denials or the 
issuance of certifications unsuited to protecting our water 
quality. More 401 denials necessarily results in more denials 
of 404 permits.
    To avoid the administrative stress of H.R. 1900, some 
States may opt to simply waive their 401 authority altogether, 
depriving them of a critical opportunity to prevent degradation 
of their waters. Given that 401 certification may be the only 
way that a State can assure its water quality standards are met 
with regards to pipeline projects, H.R. 1900's interference 
with the exercise of this authority is an interference with the 
rights of States to protect their communities.
    H.R. 1900 may even encourage deficient applications in the 
hopes that its timing restrictions prevent full and careful 
review by the agencies. And if FERC is unable to obtain the 
detailed surveys, expert reports and data analysis necessary to 
comply with NEPA and H.R. 1900's 1-year time frame, FERC could 
be forced to choose between deficient NEPA reviews or denying 
the certificate of public convenience and necessity.
    By truncating the time for allowed for environmental 
reviews, H.R. 1900 incentivizes the illegal practice of project 
segmentation. Segmentation prevents the understanding of the 
full impacts of a pipeline project and the need for specific 
protections. Segmentation is already common practice for 
pipeline projects. H.R. 1900 diminishes the ability of agencies 
to identify and stop the practice.
    And a look at the pipeline map that we have provided for 
you with our testimony, if you look at the top where the arrow 
is, the red and the yellow line towards the top is two approved 
projects. One was authorized in May of 2010, the other was 
authorized in May of 2012. And it is very clear by even casual 
observation and the timing of these reviews that these two 
proposals are, in fact, one project that should have been 
reviewed and decided upon as a single project, not two. So that 
demonstrates, you know, how segmentation plays out.
    H.R. 1900 reduces environmental protection by reducing 
environmental reviews and the time allowed for creating 
appropriate conditions. As such, if this piece of legislation 
is to move forward, it must be balanced by legislation that 
ensures the use of best construction practices and planning in 
order to ensure avoidance of environmental harm. Examples of 
enhanced practices: reduced right-of-way widths to more 
historic proportions that are mandatory; a mandate that public 
lands protected with community resources are avoided; use of 
construction strategies that avoid and reverse soil compaction. 
Compaction at pipeline construction sites can be as high as 98 
percent. Urban dams are generally only compacted to 95 percent. 
The increased runoff, pollution, potential flooding and failed 
restoration that result could be avoided by better construction 
practices, such as using excavated soils and wood chips from 
felled trees to create the construction bed for operating heavy 
equipment.
    And FERC should have a duty to ensure coordinated location 
of pipeline projects as part of its review, similar as its 
obligation with respect to hydroelectric dams.
    Coordinated planning for pipeline projects would better 
serve the public interest and help avoid redundant and 
unnecessary projects.
    So I would like to thank the committee for the opportunity 
to testify here today on behalf of the Delaware Riverkeeper 
Network, and I respectfully ask that you not move forward with 
this proposed piece of legislation, but if you do, I ask that 
you balance its effect with necessary legislative upgrades 
regarding pipeline planning, reviews and construction.
    Mr. Whitfield. Thank you very much.
    [The prepared statement of Ms. van Rossum follows:]
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    Mr. Whitfield. Mr. Kessler, you are recognized for 5 
minutes.
    Mr. Kessler. Thank you, Mr. Chairman.
    Mr. Dingell. Mr. Chairman, could I just be recognized for 
about 30 seconds?
    Mr. Whitfield. Yes, sir.
    Mr. Dingell. I thank you for your courtesy. I want to 
commend Ms. van Rossum for her very fine statement and I would 
like to welcome to the committee Mr. Rick Kessler, who is a 
personal friend, former staff member, wrote much of the energy 
legislation written by this committee during my chairmanship, 
served with distinction in writing pipeline safety legislation 
and other matters. So we welcome an old friend back. Pleasure 
to see you, Mr. Kessler.

                   STATEMENT OF RICK KESSLER

    Mr. Kessler. Thank you, Mr. Dingell. And thank you, Mr. 
Chairman, Mr. McNerney, and also you, Mr. Pompeo. I appreciate 
the opportunity to testify today.
    My name is Rick Kessler and I am here in my voluntary, 
uncompensated role as President of the Pipeline Safety Trust, 
which, as you know, is the only national independent non-profit 
solely focused on pipeline safety.
    I am here to let you know of the trust's concerns and 
opposition to H.R. 1900 in its current form. The bill would add 
two new subsections loosely based on current regulation to 
Section 7 of the Natural Gas Act in an effort to expedite 
FERC's certification process, which, as we have heard from 
FERC, is pretty fast to begin with.
    There are many reasons, though, why a FERC certificate may 
not be complete within a year time frame. These include the 
complexities involved with studying the impact of a pipeline on 
environmentally sensitive areas or on dense urban areas 
requiring substantial public involvement, or the mere lack of 
funds available to an agency to adequately staff FERC's NEPA 
review process. This latter reason will no doubt grow as 
sequestration takes greater hold on our budget.
    Frankly, we see no policy rationale for the bill's one-
size-fits-all, 1-year limit that would treat a 10-mile pipeline 
across the barren desert the same as a 1,400-mile pipeline that 
runs through multiple ecosystems in dense urban areas. In fact, 
this new limitation seems to run counter to the recent GAO 
report that studied the natural gas permitting process and 
found that the average time for those projects that began at 
the application phase was 225 days.
    But to be clear, our opposition to H.R. 1900 relates 
primarily to the new subsection that would deem approve any 
licenses, permits or, quote unquote, approvals related to an 
application for certificate of public convenience and necessity 
if the agency considering the application doesn't act within 
the 90 to 120-day time frame of FERC's issuance of its final 
environmental document. It would do this regardless of when the 
agency receives the permit or the license application.
    We note that the bill contains no requirement that such 
applications be complete and contain the necessary information 
for the reviewing agency. Even the recent INGAA Foundation 
report found that many of the causes for delays are due to 
issues wholly within the control of the applicants, not the 
permitting agencies. In those cases, it would be impossible for 
an agency to complete its review of a complex route dependent 
permit within the allotted time frame, making permit issuance 
under H.R. 1900 a potential fait accompli and effectively 
gutting the important role these agencies play in protecting 
public health, safety and the environment.
    We also note that current regulation, while setting a 90-
day deadline also, includes an exemption for timelines set by 
other Federal law, yet no such exemption exists in H.R. 1900.
    We would additionally point out that almost no company has 
pursued the remedy provided to industry under current law, yet 
now the industry is arguing for the significant change to EPAct 
2005 without even availing itself of the avenues it currently 
has to address the problem. And as others have pointed out, 
ironically it is possible that this could slow progress on 
approval of pipeline projects by leaving agencies no choice but 
to deny permits, particularly at the State level, which are 
often even more strapped for money than the feds.
    Perhaps most significantly, Section 7 of the Natural Gas 
Act is unique in that it provides for the granting of Federal 
eminent domain authority to natural gas pipeline companies. 
Subsection 7(h) of current law allows these companies in 
certain circumstances to take private land to build an 
interstate natural gas pipeline upon the grant of a certificate 
of public convenience and necessity. The trust believes that 
the taking of private land by corporations or any other entity 
is an extremely serious matter and shouldn't be taken lightly 
in law or in practice. In our view, no process or part of the 
process should be curtailed or deemed approved when takings are 
involved. Unfortunately this legislation would do just that.
    Ultimately the trust failed to see any compelling case for 
this legislation. Natural gas pipeline construction has grown 
and will only continue to grow as a result of the increased 
development of unconventional shale gas around the country. Any 
perceived strain on FERC and related agency consideration is 
due to the success, not the failure, of the growth of natural 
gas pipeline transmission.
    Absent new financial resources, in fact, the increase in 
new pipeline plants will likely put a strain on the ability of 
agencies at the Federal and State level to review these 
pipeline plans as quickly as companies and their investors 
want; however, that shouldn't be an excuse to cut corners, 
shortchange landowners and put at risk the public and our 
environment.
    Thank you for your attention to our concerns. As you know, 
the trust does not oppose the construction of new pipelines in 
general; rather, we advocate to ensure that new and existing 
pipelines are as safe as they can be for the sake of property 
owners, the environment and the public welfare.
    You have heard from us before about the inadequacy of the 
Federal pipeline safety program. We believe that this 
legislation, by short-circuiting the review and permitting 
process on numerous levels, would deal a major blow to pre-
construction review of new lines, increasing future risks to 
the public and the environment. We urge the committee to take 
the time necessary to fully review the situation before 
scheduling the bill for a full committee markup.
    Thank you, Mr. Chairman.
    Mr. Whitfield. Mr. Kessler, thanks.
    [The prepared statement of Mr. Kessler follows:]
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    Mr. Whitfield. Mr. Paris, you are recognized for 5 minutes.

                 STATEMENT OF E. ALEX PARIS III

    Mr. Paris. Chairman Whitfield and members of the 
subcommittee, my name is Alex Paris. I am President of Alex 
Paris Contracting. Our offices are located in Atlasburg, 
Pennsylvania, which is about 2 miles from the first Marcellus 
well.
    We provide a variety of construction services throughout 
the mid-atlantic region, including natural gas pipeline 
construction. Last year we installed about 350,000 feet of 
pipe, mainly in the Marcellus and Utica Shale plays in 
Pennsylvania, West Virginia and Iowa. Because of development of 
these shale plays, we have had to increase our employee base 
dramatically as well as purchase a substantial amount of 
equipment. While we perform a significant amount of midstream 
work, we also work on gas distribution pipeline systems.
    I am here today on behalf of the Distribution Contractors 
Association, which represents contractors who work primarily in 
the gas industry. I am pleased to speak to you this morning 
about the natural gas pipeline permitting process, which 
unfortunately often results in considerable delays in getting 
important projects off the ground.
    The Natural Gas Pipeline Permitting Act would effectively 
address this problem by authorizing FERC to enforce approval 
deadlines subject to other Federal agencies involved in the 
permitting process.
    It is evident that we have enough natural gas to meet 
America's growing energy needs for generations to come, which 
is a blessing; however, many parts of the country do not have 
the necessary pipeline infrastructure to meet the rise in 
demand. Many more pipeline projects will be needed to achieve 
that capacity.
    Gas pipeline projects create high paying jobs and generate 
significant economic activity. On top of that, tax revenue 
generated by natural gas production comes at a time when States 
and local communities need it most. In 2011, the Pennsylvania 
Department of Revenue reported that companies engaged in 
natural gas drilling activities paid more than $1.1 billion in 
State taxes since 2006. Last year nationwide production and 
transportation of gas added $62 billion to Federal and State 
government revenues, and it could elevate to $111 billion by 
2020.
    I have seen these economic impacts up close over the past 
few years in my home State of Pennsylvania. In 2008, I employed 
about 250 people. I currently employ about 450, about a 20 
percent increase per year. We are constantly hiring and 
training new employees to meet our project needs. In fact, on a 
recent project, we had to add about 60 more people to the job 
because the schedule compressed due to permitting issues.
    Economic benefits that accompany natural gas pipeline 
projects aren't limited to hiring workers. Last year my company 
purchased an additional $16 million worth of trucks and 
equipment, and I can honestly attribute all of this to the 
recent boom in natural gas production and transportation.
    I have had an opportunity to see firsthand both the 
economic and social impact of natural gas development. We have 
also witnessed many problems that occur when permits are 
delayed. This includes layoffs, equipment being idled and 
negative impacts to property owners.
    I would like to point out that our company is an 
opportunity to work in a vast variety of industries with many 
different--and with many different government entities. I have 
never seen an industry like the gas industry. Its commitment to 
the environment and to doing projects the right way is 
unparalleled. They spend the money and dedicate the resources 
necessary to address environmental concerns and build safe 
pipeline systems that meet the latest and highest standards. I 
have had an opportunity to be part of this, and I am very proud 
of it.
    Unfortunately, important pipeline projects are often 
stalled because of extended reviews while they acquire Federal 
and State permits. Permit delays are a big problem. We live 
this almost every day, often resulting in missed in-service 
dates and increased project costs. My company is currently 
experiencing permit delays on several projects, one of which we 
were not able to obtain a permit for the last 8,000 feet of a 
project. That project ended up being delayed and in all 
likelihood will be rebid.
    A recent study conducted in Pennsylvania determined that 
permit delays are averaging 150 days and most of them are for 
minor wetland and stream crossings. The bottom line is that 
delays in acquiring pipeline permits regularly cause downstream 
delays, which in the end impacts the consumer.
    Understanding the significant job creation and the economic 
activity that result from gas pipeline projects, DCA strongly 
supports legislation to streamline the permitting process.
    I appreciate the opportunity to appear before you this 
morning and look forward to answering any questions you may 
have.
    Mr. Whitfield. Thanks very much, Mr. Paris.
    [The prepared statement of Mr. Paris follows:]
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    Mr. Whitfield. And, Mr. Santa, you are recognized for 5 
minutes.

               STATEMENT OF DONALD F. SANTA, JR.

    Mr. Santa. Thank you. Good morning, Chairman Whitfield, Mr. 
McNerney, and members of the Subcommittee on Energy and Power. 
My name is Donald Santa and I am the President and CEO of the 
Interstate Natural Gas Association of America, or INGAA. INGAA 
represents interstate natural gas transmission pipeline 
operators in the U.S. and Canada.
    Thank you for the opportunity to share INGAA's views on 
H.R. 1900, the Natural Gas Pipeline Permitting Reform Act. 
INGAA supports H.R. 1900. If enacted, this bill would perfect 
the provisions of the Energy Policy Act of 2005 that were 
intended to provide the Federal Energy Regulatory Commission 
with the ability to coordinate the actions of other Federal and 
State agencies that have authority under Federal law to issue 
permits required for the construction of natural gas pipelines.
    As part of this coordination, EPAct 2005 authorized FERC to 
establish deadlines for action by other Federal and State 
agencies that must issue permits in connection with a FERC-
approved pipeline. EPAct 2005, however, did not provide FERC 
with any authority to enforce such deadlines. Further, the 
remedy provided in that law, a lawsuit against the offending 
agency brought in a Federal appellate court by the pipeline 
applicant, has proven to be ineffective.
    H.R. 1900 would remedy this problem by requiring that the 
Federal or State permitting agency must act within 90 days 
after FERC issues its environmental impact statement or 
environmental assessment pursuant to NEPA. 90 days is the 
period prescribed by the regulations adopted by FERC to 
implement EPAct 2005. Should the permitting agency fail to act 
within the 90 days, H.R. 1900 would have the license, permit or 
approval go into effect by operation of law.
    This change in the law is needed because, notwithstanding 
the intent of EPAct 2005, it now takes longer than before for 
an applicant to receive the permits and approvals required to 
commence constructing a FERC-approved pipeline.
    In particular, a report prepared by Holland & Knight and 
sponsored by the INGAA Foundation examined a sample of 51 
pipeline projects from both before and after EPAct 2005. The 
report found more than a threefold increase in the permits that 
were delayed more than 90 days after the issuance of the FERC 
NEPA document and a more than fivefold increase in the permits 
that were delayed for yet another 90 days beyond the initial 
90-day period. The report found that reasons for the delays 
varied and could be addressed partly by process improvements on 
the part of both the permitting agencies and the applicants. 
Still, the top recommendation from the report was schedule 
enforceability.
    INGAA's goal in supporting H.R. 1900 is to encourage 
permitting agencies to make timely decisions by providing a 
real enforcement mechanism. With this enforcement, as contained 
in H.R. 1900, INGAA believes that permitting agencies will be 
strongly motivated to make timely decisions.
    Why should Congress care about the timely permitting for 
natural gas pipelines? Congress should care because pipelines 
are critical to enabling U.S. consumers to take advantage of 
the substantial new domestic natural gas supplies.
    The central role of natural gas in our Nation's energy 
future was noted by President Obama in his June 25th speech at 
Georgetown University. The President said, in part, quote, 
``Sometimes there are disputes about natural gas, but let me 
say this. We should strengthen our position as the top natural 
gas producer, because in the medium term, at least, it not only 
can provide safe, cheap energy but it can also reduce our 
carbon emissions,'' close quote. The President went on to say, 
quote, ``The bottom line is natural gas is producing jobs. It 
is lowering many families' heat and power bills,'' close quote.
    Without pipelines, natural gas supplies remain in the 
ground, and consumers in capacity-constrained markets 
experience greater price volatility and higher-than-average 
natural gas prices.
    Mr. Chairman, members of INGAA thank Representative Pompeo 
and the cosponsors of H.R. 1900 for introducing this 
legislation and the subcommittee for inviting testimony on the 
bill. If enacted, this bill will make an incremental but 
important change that will increase the likelihood that the 
U.S. fully realizes the benefits of abundant domestic natural 
gas.
    Mr. Whitfield. Well, Mr. Santa, thank you.
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    Mr. Whitfield. And thank all of you for your testimony. As 
I said in the beginning, we appreciate your being here to give 
us your views on H.R. 1900.
    I think it goes without saying that this is a particularly 
important piece of legislation, and I know all of us will have 
questions. And I recognize myself for 5 minutes of questions.
    We have all talked about the abundant natural resources 
that we have in America with these recent discoveries. And we 
do know that there is going to be an increase in application 
numbers for gas line pipelines. And it appears that, on this 
panel, two of you are probably opposed to this--are opposed to 
this legislation, and three of you, I am assuming, support this 
legislation.
    And one of the key issues here is this schedule 
enforceability. And, Mr. Santa, in your testimony, you gave an 
example of the Corps of Engineers and the Natural Resources 
Conservation Service on a water permit. You gave a good example 
of a permit that was delayed an unreasonable length of time, in 
my view. And I want you to comment on it, because that is the 
kind of real-life situation that we deal with.
    Now, 90 percent of these permits are either approved or 
disapproved within the time constraints of existing law. But 
there are real consequences, certainly on both sides of the 
issue, when a permit is delayed. And in the example you gave, 
it increased the cost of this project by 6 percent, I believe.
    Would you elaborate just a little bit on that project and 
the delay caused by the Corps of Engineers and the Natural 
Resources Conservation Service?
    Mr. Santa. It was a relatively short project, 20 miles of 
pipeline. I believe it was relatively small-diameter pipe. But 
nonetheless, notwithstanding the FERC process having worked 
very well, dealing with the Corps and the other agency added 
quite a bit of delay. That added cost for the applicant, likely 
cost for those who were the customers of the pipeline. To the 
extent the pipeline was going to provide additional gas 
supplies to that community, it delayed the benefit of that.
    I think it is, as you said, Mr. Chairman, an example of the 
type of a delay that this bill would provide a powerful 
incentive for the agencies to act in a timely manner so that 
these facilities could be built.
    Mr. Whitfield. Now, can any of you think of a better way to 
encourage these agencies that have these 90 days to either 
approve or deny a permit, can you think of a better enforcement 
mechanism than what Mr. Pompeo sets out in his legislation? Is 
there some other way that it could be done to encourage timely 
action?
    Ms. van Rossum. Good morning. This is Maya van Rossum.
    With all due respect, there already is an opportunity. In 
the 2005 Energy Protection Act, there is the opportunity to go 
to the courts and seek a remedy through the courts. The fact 
that even in INGAA's own report they document that the pipeline 
companies have chosen not to avail themselves of this remedy 
does not mean that it is not a fair, adequate, full, complete, 
and available remedy for them.
    And, in fact, going to the courts is also the remedy that 
is available to environmental organizations and community 
organizations and citizens and residents who feel that they 
have been disenfranchised by the process, perhaps for different 
reasons.
    So just with all due respect, I would say that there is a 
remedy available to the pipeline companies. They simply have 
chosen not to avail themselves to take advantage of it.
    And I would say, if they were to pursue these legal actions 
through the decisions that come out of each of these court 
cases, precedent would be set. And it would be the precedent 
that would mandate quicker or shorter, more thoughtful or less 
thoughtful decision-making by the agencies.
    But that is really the path forward, we believe, rather 
than legislation that takes away the rights of the agencies and 
the community to fully participate.
    Mr. Whitfield. Has your agency ever filed a lawsuit to stop 
a project?
    Ms. van Rossum. We have filed--we are engaged in legal 
action, because we are actually concerned about the deficiency 
of the reviews and permitting that have been undertaken by FERC 
and by the State of Pennsylvania for the Northeast Upgrade 
Project pursued by the Tennessee Gas Pipeline Company.
    So it is not a legal action about stopping a project. It is 
a legal action about making sure that the law has been complied 
with and that the project only moves forward in a safe manner 
for the environment and----
    Mr. Whitfield. So you have a lawsuit against FERC today?
    Ms. van Rossum. Yes, we do.
    Mr. Whitfield. OK.
    Ms. van Rossum. We have a legal action in the courts today.
    Mr. Whitfield. My time has----
    Mr. Santa. Could----
    Mr. Whitfield. Oh, yes, Mr. Santa?
    Mr. Santa. Could I respond on the point about the 
effectiveness of the legal remedy provided under the law today?
    As we note in the testimony, it is somewhat self-defeating 
for a pipeline to go and sue the agency from which it is 
seeking to get a favorable permit.
    But probably more importantly, the one instance in which a 
pipeline company availed itself of the appellate rights 
provided under EPAct 2005 I think illustrates that. With the 
Islander East project, it sought review of the denial of a 
clean water permit by the State of Connecticut, so not inaction 
by the State but nonetheless denial of a permit.
    It took Islander East 1 year and 3 months to get review 
from the Second Circuit Court of Appeals, to get a decision 
remanding the case to the Connecticut DEP. It took Islander 
East a total of 2 years and 10 months and two more trips back 
to the U.S. Court of Appeals for the Second Circuit to get the 
final word, which ultimately was upholding the State on denying 
the permit.
    So I think with that as the track record of utilizing the 
appellate process under EPAct 2005, you can see why pipelines 
have not been eager to do this.
    Mr. Whitfield. Thank you, Mr. Santa.
    Mr. McNerney, you are recognized for 5 minutes.
    Mr. McNerney. Well, thank you, Mr. Chairman.
    This has been a pretty beneficial hearing. I think it has 
brought out that there are legitimate concerns on both sides of 
this piece of legislation. So I appreciate the testimony.
    In my mind, the bottom line is this: Are firm deadlines 
going to be beneficial overall, or are firm deadlines going to 
be detrimental, taking into account public safety and the 
possible denial of what would be legitimate projects?
    So I would like to just acknowledge that this is not an 
easy question to answer ``yes'' or ``no.'' I think we should 
take time and look at this in a more deliberate manner than 
just bringing it up for markup this afternoon. That is my 
opinion, Mr. Chairman.
    Mr. Paris, you have mentioned what you referred to as 
permit delays. Has your business participated in the pre-
permitting process at FERC, and has that been beneficial?
    Mr. Paris. No. As a contractor, we typically wouldn't be 
involved in that. The pipeline company would be.
    Mr. McNerney. So----
    Mr. Paris. The permit delays are generally within the 
pipeline company that we are working for the constructing--that 
we are constructing the line for.
    Mr. McNerney. Well, I would just recommend that that 
approach be taken. It might ease that, sort of, burden that you 
are facing.
    But this bill does set a 12-month deadline on FERC to 
decide applications for gas pipeline certificates. There is no 
flexibility, there are no exceptions. FERC has to decide every 
application within 1 year. During that year, the entire 
environmental review required by NEPA would have to be 
completed.
    Ms. Rossum, do you think that 12 months is enough time to 
complete those kinds of permits on complex projects?
    Ms. van Rossum. In terms of NEPA, where the 12 months in 
H.R. 1900 would apply, I absolutely feel that there are 
numerous projects where 12 months would not be appropriate, 
especially if you are not assuring that the clock begins at the 
time when there is an administratively complete application 
before the agency.
    In terms of the State agencies and the Federal agencies, 
the 90-, potentially 120-day time frame, again, the volume of 
information and analysis that has to be undertaken to review a 
project, to put in place the conditions, to collect the data 
and the research of geological resources and water bodies that 
will be impacted and what kind of ENS control, it is a very 
time-intensive process, and I do not believe those time frames 
are enough.
    Mr. McNerney. Thank you.
    Well, I mean, it is clear that we must remember that doing 
a good job reviewing a proposed natural gas pipeline could have 
serious impacts. And we are not only talking about 
environmental impacts, but I don't live too far from the San 
Bruno explosion that happened a few years ago in the San 
Francisco Peninsula. There are very serious consequences with 
engineering review deficiencies, as well.
    And I would like to see if any of you, Mr. Markarian in 
particular, have concerns about possible consequences of bad 
engineering and environmental reviews if there is an imposed 
deadline that doesn't permit the agencies to do sufficient 
work.
    Mr. Markarian. Well, I think it is critically important 
that we do the things we need to do correctly and we not 
squander this great opportunity to advance our Nation forward 
on the back of natural gas.
    However, I do think that a year's time is enough if we--I 
think we all worry about what government does well and 
efficiently. And I think we have to raise the bar and set 
expectations that things need to be done according to a 
schedule. And if they can't, a rejection, a ``no,'' is 
certainly understandable. This will produce certain noes, and I 
think that is favorable to an interminable ``maybe.''
    Mr. McNerney. Well, I guess I don't disagree. But, I mean, 
I think the question is, imposing these strict deadlines, is 
that going to be beneficial or not? It is not clear to me that 
we can answer that question in one hearing. It is not clear to 
me that we should move forward with a markup today until we get 
some better answers on these questions.
    With that, I will yield back.
    Mr. Whitfield. Thank you, Mr. McNerney.
    Mr. Pompeo, you are recognized for 5 minutes.
    Mr. Pompeo. Thank you, Mr. Chairman.
    And I thank all the witnesses for coming out and testifying 
today.
    I want to just keep going in the direction you were headed, 
Mr. Markarian. You talked about the risk of ``no.'' We have 
heard from Members today that there is this risk that the 
agencies will just say ``no'' because they ran the clock out. 
We have heard from Ms. van Rossum and Mr. Kessler of that risk.
    But all the folks who have to go out and raise capital and 
operate in this environment seem to think that that risk is 
worth taking, because it creates certainty for them so they can 
deliver a high-quality product at a low cost and good value to 
their customers.
    So you all got to the place that INGAA, that says, hey, 
that risk, which I think is low but, nonetheless, out there--
how did you get there? How did you get comfortable that that is 
better off for you and for your customer service area than this 
risk of just being hung out for an indefinite period of time?
    Mr. Markarian. Because planning is critical, and meeting 
the expectations of a plan is critical. And let's not forget, 
we have done great things as Americans. And when we work 
together, we--what your bill does is it ups our game. It says, 
everybody, whether we are concerned about the environment or 
safety or getting things done, everybody ups their game and 
commits to a time schedule. And you actually have a little bit 
of wiggle room, too, in the bill, that if it can't be done in a 
year, you have some extra time.
    So I think what we are focused on--we have been through 
some tough times, and we are focused on a gift that we can take 
advantage of, work together, up our game, make a commitment to 
each other that we are going to do it within a time limit, and 
then stick to it.
    And you know what? If we have to work a little harder, we 
have to work weekends, we have to work nights, we have to work 
a 20-hour day, if that is what it takes, that is what we need 
to do. Because I really do believe the promise of this resource 
is that great.
    Mr. Pompeo. And, Mr. Markarian, you have another 
obligation, you have a service area obligation to provide 
reliable--you have agencies that are requiring you to meet a 
certain level of reliability and capacity and are constantly 
chasing you on rate issues, as well.
    I assume you think that H.R. 1900 would improve your 
capability to meet those other various commitments that your 
company has, as well.
    Mr. Markarian. We do.
    Mr. Pompeo. Mr. Santa, does this risk of ``no'' due to 
timeline--Ms. van Rossum was talking about short-circuiting--I 
am not sure what the language was, but her concern was that the 
agencies would just say ``yes'' when they hadn't really 
completed the task. Do you think that is the likely 
administrative response to H.R. 1900?
    Mr. Santa. I think they have the potential, as has been 
noted, to say ``no.'' And I also think that when we are talking 
about the timelines here, while there is a focus on the 90 days 
and the 30-day extension, let's remember there is all that 
period before FERC issues the NEPA document.
    In that GAO report, they noted that for the projects that 
go through the pre-filing--those are the more complex, longer 
projects--typically, it is 558 days between initiation of pre-
filing and the FERC certificate order. That is over a year and 
a half. Even if you back out and assume FERC takes 90 days 
between the EIS and the certificate order, that is still a year 
and 3 months of dialogue and engagement that is going on 
between the applicant, stakeholders, the resource agencies. So, 
number one, I think there is the time to make those decisions.
    And, also, I think, quite frankly, if those agencies are 
true to their statutory mandates and, you know, what Congress 
has asked them to do, if they need to say ``no,'' they will say 
``no.'' And as you noted, as Mr. Markarian noted, that is a 
risk that I think the industry is going to take. It is greater 
accountability on the part of the agencies, but also, quite 
frankly, it requires greater accountability on the part of the 
pipeline industry to file good applications.
    Mr. Pompeo. Right. And my expectation would be that if that 
were to be the case, that we started to get these noes, I think 
industry would respond to that in an appropriate way. They 
would be more complete, they would be more careful, they would 
get these things done in a more timely fashion. They are not 
going to sit there and allow administrative noes to be made 
simply because of a failure on the part of the applicant.
    Mr. Santa. I don't think their shareholders would tolerate 
that.
    Mr. Pompeo. I think that is probably right, as well.
    Thank you very much, Mr. Chairman. I yield back the little 
bit of time left.
    Mr. Whitfield. The gentleman yields back.
    At this time, I recognize the gentleman from New York, Mr. 
Tonko, for 5 minutes.
    Mr. Tonko. Thank you, Mr. Chair.
    Mr. Kessler, you indicate in your testimony that, in spite 
of your organization's work, we continue to experience major 
pipeline failures.
    In response to my question earlier to Mr. Moeller, he 
indicated that projects going through densely populated areas 
are more complex than those through more open areas. In an 
abbreviated process, are we likely to put more people at risk, 
given those situations?
    Mr. Kessler. Absolutely.
    Mr. Tonko. And what role do safety considerations play now 
in pipeline sitings?
    Mr. Kessler. Not enough, from our perspective. But, you 
know, when you are making decisions about routing, whether it 
is through urban areas or high hazard areas like earthquake 
zones, flood zones, things like that, it is clearly a 
consideration.
    I also think it is interesting that the industry which has 
been very reluctant, in fact resistant, to mandatory deadlines 
for safety inspections, who has argued against one-size-fits-
all for safety inspections, suddenly wants a one-size-fits-all 
mandatory deadline for permitting. So it comes across a little 
strange to me.
    Mr. Tonko. Yes.
    To what extent are concerns about safety involved in public 
opposition to pipeline projects? You know, you talk about this 
one-size-fits-all for inspection. Is the public aware of that? 
And what concerns--again, are safety involved with public 
opposition to proposals?
    Mr. Kessler. You know, public opposition occurs for a 
number of reasons, ranging from true safety or environmental 
concerns to just a lack of familiarity with pipeline and energy 
production. As we get more energy production in New York, 
Maryland, where I live, and other nontraditional production 
States, you are going to have a level of resistance to projects 
based upon a lack of familiarity.
    But you also have them based upon safety and environmental 
concerns, depth of coverage for burial of pipelines through 
streams, running through earthquake zones, running through 
densely populated areas, and routing matters when you do these 
things.
    Mr. Tonko. Thank you.
    Ms. van Rossum, we have heard the environmental review 
process response mentioned several times as the source of 
delays in approval of pipeline projects. Are communities' 
drinking water resources, agricultural and fishery resources 
part of the environmental review process? Are we only talking 
about habitats and areas of low public use?
    Ms. van Rossum. Yes, when we are talking about the National 
Environmental Policy Act, we are not looking just at the 
ecological environment, we are looking at the human 
environment. So we are, in fact, looking at drinking water 
supplies, the quality of the air, the level of noise pollution 
that perhaps a compressor creates next to residential 
communities, to a wide variety of issues.
    So we are concerned about the critters in the forests, but 
we are very much looking at the implications of what happens to 
the critters, to the forests, to the water, for what it means 
to the health, the safety, and the tremendous level of jobs 
that benefit people as a result of them.
    Mr. Tonko. OK. Thank you.
    And is an expedited process likely to increase or reduce 
public confidence and/or support for pipeline projects, in your 
opinion?
    Ms. van Rossum. I think it will absolutely decrease it. I 
think there are already concerns about the integrity of the 
process, because there is so much chumminess, frankly, between 
the regulators and the regulated when it comes to pipeline 
projects. And that already has raised a level of concern.
    And I think if we start imposing artificial deadlines and 
reducing the opportunity for the public to participate, which a 
90-day review period absolutely does, we will absolutely be 
diminishing public confidence as well as the process as a 
whole.
    Mr. Tonko. OK. Thank you very much.
    Mr. Chair, I yield back.
    Mr. Whitfield. I think Mr. Kessler wanted to say something.
    Mr. Tonko. Oh, I am sorry. Mr. Kessler?
    Mr. Kessler. I just wanted to add to my answer before, that 
one of the reasons for the protest could involve the potential 
taking of private lands. And those landowners should have a 
right to process and to be able to argue against a particular 
route that would affect them.
    Mr. Tonko. OK. I thank you for that added information.
    And, with that, Mr. Chair, I yield back.
    Mr. Whitfield. At this time, I recognize the gentleman from 
Texas, Mr. Olson, for 5 minutes.
    Mr. Olson. I thank the chair.
    And good afternoon and welcome to the witnesses.
    And before I get started with my questions, I want to share 
with you all a real-world story that happened about 48 hours 
ago about the importance of a thorough and expeditious 
permitting process to build new pipelines.
    As I said, 48 hours ago I was at my church having a glass 
of water. I was approached by one of my fellow church members 
about the need to grow the pipeline infrastructure from the 
Eagle Ford Shale play in south-central Texas to the refineries 
along the Texas Gulf Coast. He works downstream for a power 
generator, natural gas power generator. And his legitimate 
concern was that our current pipeline infrastructure would hurt 
his business. He thought the natural gas price would increase 
because of artificially limited supply because of a lack of 
pipelines. I think that is a very legitimate concern.
    So my first question is for you, Mr. Markarian. As you 
mentioned in your testimony, NextEra has an extremely clean and 
diverse fleet. You have gas, nuclear, coal, and wind. And I am 
very happy to have you operating in Texas. On behalf of the 
people of Texas 22, I encourage you to build new plants in the 
Lone Star State.
    But, of course, one key element of your fleet is your gas-
fired plants, which not only provide reliable power themselves 
but also help back up the highly variable wind. And when I say 
wind and power, I want to remind my colleagues that Texas is 
the number-one producer of wind in America--number one.
    We discussed in this committee how reliability and access 
to fuel is different for coal plants or nuclear plants, and as 
it is for natural gas plants. So can you discuss the 
differences between coal, nuclear, and natural gas plants for 
reliability?
    And is it fair to say that an efficient regulatory process 
for pipeline approvals like H.R. 1900 is key to keeping the 
lights on in many parts of our country?
    Mr. Markarian. It is key.
    We actually have two giant gas plants, Forney and Lamar, in 
Texas, in Mr. Hensarling's district.
    We believe we need all of these fuels. We are the Saudi 
Arabia of coal. We have a gift now of natural gas, by the way, 
made possible by the support of this Congress for policy that 
invested in new technologies that ultimately yielded the 
ability to harness this.
    All forms of power need backup. And so we believe at 
NextEra we need all forms of energy and should encourage the 
development of all of it.
    And, as far as Texas, it is a great place to do business.
    Mr. Olson. Yes, sir. You like that State income tax rate, 
right? Pretty close to zero.
    Mr. Markarian. Right.
    Mr. Olson. You got it. Yes, sir.
    How would you describe the overall current regulation? 
Would you say it is efficient?
    Mr. Markarian. I do. Again, as I said, you know, there are 
rules that apply to every one of us in this room and outside 
this room in this town. And if we follow the rules that are set 
up and work together to try to do things according to the 
timelines set forth, I think we all win. And, on the contrary, 
if we don't work together, we all lose. We don't harness the 
electricity we can from natural gas, we don't sell it, we don't 
pull it up, we don't benefit the economy from it. So I think it 
behooves us to all work together.
    Mr. Olson. Yes, sir. And my State faces a power crisis. 
Supposed to bring new power plants on line sometime next year, 
too. If we have another heat wave like we had August of 2011, 
lights will go out all over the State.
    My final questions are for you, Mr. Santa. I mean, as you 
mentioned in your testimony, pipelines are multibillion-dollar 
investments. And once these projects are undertaken, the timing 
becomes very important, because investors have expectations as 
capital is tied up, like Mr. Pompeo alluded to. The shippers 
who produce gas and the end-users who consume it need certainty 
for when that supply and demand can meet up.
    Can you discuss some of the ways in which delays to 
pipeline projects can hurt everyone up and down the pipe chain, 
from the getting it out of the ground to the refinery, the 
whole supply chain? It is just like my fellow church member, 
worried about downstream, a power generating plant worried 
about a pipeline from the Eagle Ford Shale play.
    Mr. Santa. Yes, Mr. Olson. I think this is illustrated of 
what happens in the market when you have capacity constraints. 
This past winter in Boston, prices at one point got to $34 per 
MMBTU, while they were averaging a little above $4 in the rest 
of the country. That was largely due to pipeline constraints. 
So customers in that market were paying more because of 
pipeline constraints that were not relieved.
    Similarly, upstream, if there are constraints that hinder a 
producer in getting their gas to the market, they will be 
forced to accept a lower price for that gas. That reduces their 
incentive to drill and to produce gas.
    So the capacity constraints on the pipelines, the ability 
to relieve them in an efficient market-responsive manner, it 
not only affects the pipeline companies, it affects gas 
consumers across the board.
    Mr. Olson. Thank you.
    I am out of time. I yield back.
    Mr. Whitfield. The gentleman's time has expired.
    At this time, I recognize the gentleman from California, 
Mr. Waxman, for 5 minutes.
    Mr. Waxman. Thank you, Mr. Chairman.
    The arbitrary deadlines established by this bill raise 
serious concerns, but the worst provision may be the one that 
automatically grants environmental permits for a pipeline. The 
project could be approved if an agency does not make a decision 
on the permit within 90 days of the issuance of FERC's 
environmental analysis.
    The automatic permitting provision broadly applies to the 
Clean Air Act, the Clean Water Act, the Endangered Species Act, 
Coastal Zone Management Act, and the rights of way through 
Federal lands.
    Under this bill, if an agency cannot complete its review of 
a permit application by the arbitrary 90-day deadline, then no 
one checks to make sure that the project won't have an adverse 
impact on the environment or public health; the permit is just 
magically issued.
    These permits are detailed documents. They can include 
emission limits, technology or operating requirements, 
conditions to ensure that the environment is protected. 
Agencies need to figure out all of these details and then 
actually draft the permits.
    Ms. van Rossum, what would it mean for a permit that might 
not even be written to automatically take effect if a deadline 
is missed? How would that work?
    Ms. van Rossum. To be honest with you, I am not sure how it 
would work. I don't know what is the permit or the approval 
that would go into effect. Perhaps it is just the application 
the way the applicant submitted it, no matter how deficient the 
application material. So there is no clarity on that, frankly, 
the way the law is written.
    But one thing I will say is that it is probably assured 
that we won't have the limitations in the document necessary to 
ensure that water protection laws, air protection laws, coastal 
zone management laws are met. And, as a result, those permits 
are eminently challengeable in the court. So it is going to 
draw us all into the courtroom.
    Mr. Waxman. Let me give you a concrete permitting example 
to understand the impacts of this provision. What is involved 
with an Army Corps of Engineers review of a wetlands permit 
under Section 404 of the Clean Water Act, and why is this 
review important?
    Ms. van Rossum. Yes, so the Army Corps is working to 
protect the health and the quality of the wetlands. Wetlands 
are vitally important for protecting water quality, including 
the quality of drinking water supplies, for soaking up waters 
that would prevent flooding and flood damages, for protecting 
ecological systems that are important for supporting wonderful 
ecotourism jobs and recreational opportunities. So the work 
that the Army Corps does is beneficial to the wetlands, but it 
is beneficial to our community as a whole.
    In order to undertake that review, they need to look 
carefully at the materials that have been submitted by the 
applicant to make sure that they are accurate. They need to go 
out in the field and do jurisdictional determinations. They 
need to collect information and data on the construction 
practices that are going to be used----
    Mr. Waxman. What if they are just taking too long? We have 
a 90-day period, and they just haven't figured out to do all 
this in that period of time. What happens under this bill?
    Ms. van Rossum. That is what is not clear to us, frankly. 
We don't know what happens. We don't know what is the document 
that goes into force and effect. Perhaps it is simply the 
application materials that the permittee has put in, whatever 
quality and information that may or may not have. It is really 
not clear what it means----
    Mr. Waxman. Yes.
    Ms. van Rossum. --to approve a nonexistent document.
    Mr. Waxman. Mr. Kessler, what do you think? Is the Pipeline 
Safety Trust concerned about the safety implications of a host 
of permits automatically going into effect without any agency 
analysis or conditions?
    Mr. Kessler. Oh, absolutely, Mr. Waxman.
    Look, we certainly would love to see the certification 
process be more efficient. We have no objection to that. But we 
don't think that a deemed approval or an undue denial of a 
permit is good public policy in any way, shape, or form. This 
is why we have agencies to actually look into these things.
    I would note that this committee after 9/11, you will 
recall and Chairman Whitfield will recall, did extensive work, 
bipartisan, on nuclear safety. And we found that there was a 2-
year backlog in FBI review of security----
    Mr. Waxman. Well, what would be the----
    Mr. Kessler. --permits. And I don't think anyone argued 
that----
    Mr. Waxman. Because you know what this committee is like 
and----
    Mr. Kessler. Yes.
    Mr. Waxman. --the Member only has a limited amount of time, 
what if we have this automatic permit and then it results in 
damage to the environment and public health? What is this going 
to do to the public acceptance of interstate natural gas 
pipelines going through their community?
    Mr. Kessler. Oh, it is going to hurt them greatly, I think.
    And, as I said, no one would have argued for a deemed 
approval of a security permit after 9/11 if it took longer than 
6 months or a year. So, same thing with immigration. Even the 
most ardent supporter of open immigration wouldn't, I think, 
argue for a deemed approval of a green card.
    Mr. Waxman. Thank you. My time has----
    Mr. Whitfield. The gentleman's time----
    Mr. Waxman. Oh, Mr. Chairman, I would like to ask unanimous 
consent that the technical analysis provided to us from the 
U.S. Army Corps of Engineers' perspective be put into the 
record, as well as the technical analysis by the Environmental 
Protection Agency.
    Mr. Whitfield. Without objection.
    [The information appears at the conclusion of the hearing.]
    Mr. Waxman. Thank you.
    Mr. Whitfield. At this time, I would like to recognize the 
gentleman from Virginia, Mr. Griffith, for 5 minutes.
    Mr. Griffith. Thank you, Mr. Chairman. I appreciate that.
    I am intrigued. Ms. van Rossum, in answering one of 
Chairman Emeritus Waxman's questions, you were getting excited, 
as is a good thing to do when you are discussing the public 
events, and you indicated that one of the provisions of this 
bill would just draw us all into the courtroom, as if that were 
a negative thing.
    And yet, earlier in the testimony, you indicated that that 
was the remedy for folks who had a problem with what was going 
on, that they could go into the courtroom and that that was a 
good thing, and they didn't need this bill and this remedy 
because they had the courts available to them.
    And I am wondering if you could rectify the two. Is it good 
or is it bad to be pulled into the courtroom?
    Ms. van Rossum. Well, it is always important to have the 
courts as an opportunity to remedy a real problem that exists. 
And so, if we find ourselves in a situation where the law is 
automatically approving documents that are nonexistent or are 
eminently deficient because the agencies did not have the 
opportunity to complete them, then, absolutely, the remedy is 
to go into courts.
    But that is going to be a much more frequently required 
remedy than what we have in the current situation. We have had 
many, many----
    Mr. Griffith. Yes, ma'am, and I----
    Ms. van Rossum. --testimony about how many applicants are 
approved----
    Mr. Griffith. --appreciate that. I don't think--I think the 
distinction, personally, is that it depends on whose ox is 
being gored. The courts are good when it is somebody else's ox, 
are bad when the courts are goring your ox. But when it is 
somebody else's ox, that is a great place to go.
    Ms. van Rossum. No. It is about----
    Mr. Griffith. Let me----
    Ms. van Rossum. --intentionally creating----
    Mr. Griffith. I don't have but so much time or I would love 
to get into a further discussion with you.
    But I would ask you, Mr. Santa, earlier, in the previous 
panel, there was a lot of discussion about, well, we can make 
this happen if we only start the 12 months when there is a 
completed application. And I raised the concern that, yes, but 
when is an application completed, because can't that be a 
moving target?
    Do you have those same concerns, Mr. Santa?
    Mr. Santa. I think there is some risk of that, Mr. 
Griffith, but I also think that it is something that if, you 
know, the committee is looking at ways to respond to 
Commissioner Moeller's concern, certainly is worth further 
discussion.
    Mr. Griffith. But it shouldn't just be a blanket statement. 
There maybe ought to be some guidelines as to when there is a 
finished application----
    Mr. Santa. Oh, very much so. I think, in the interests of 
all concerned, there needs to be clarity as to what constitutes 
a complete application so that it can't be used as a way to 
game the system.
    Mr. Griffith. And it always work better when Congress 
dictates what that is, as opposed to leaving it to the 
administrative branch of government. Isn't that true, yes or 
no?
    I will tell you it is ``yes.''
    Mr. Santa. OK.
    Mr. Griffith. Mr. Paris, do you want to make some comments 
on that point?
    Mr. Paris. Yes, I am from Pennsylvania, and I see the 
completed application process many times. Because we permits 
ourself, and we work for pipeline transportation companies that 
submit permits for--a lot of times, you will send the permit in 
for a review and ask if it is complete. They will send you a 
letter, ``No, it is not complete. We are going to hold it. Here 
are the three things that aren't complete.'' You send those 
three things, and 2 months later here comes another letter 
saying, ``Well, we also looked at it again, and this isn't 
complete.'' So you can get into basically a rat race on deeming 
what is a completed application.
    So whatever is done here with this bill, that needs to be 
clearly defined, because the regulatory agencies can turn that 
into a nightmare. And I have been through that. I have seen 
that happen before.
    Mr. Griffith. And, Mr. Paris, I have to say that I have 
only been in office in Congress for 30 months, and I have had 
any number of complaints from my constituents about that very 
same problem.
    Mr. Markarian, do you want to weigh in on that subject, as 
well?
    Mr. Markarian. It is important to build safely, 
environmentally sensitively, and get the job done all at the 
same time. But what we take comfort in, in terms of this bill, 
is it doesn't shortcut any reviews that are guaranteed to 
ensure any of those things.
    Now, this process will produce yeses and noes, but it 
doesn't affect the substantive standards of environmental 
protection that are designed to protect Americans. It just 
means we have to get it done by a time certain. And that is why 
we are comfortable with it.
    Mr. Griffith. And I appreciate that. I also appreciate that 
your company is one of those that truly exercises all of the 
above when looking at production of energy in this country. And 
I do appreciate that.
    With that, Mr. Chairman, I will yield back.
    Mr. Whitfield. The gentleman yields back.
    At this time, I recognize the gentleman from Texas, Mr. 
Green, for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman.
    I assume the whole panel was here during the FERC 
testimony?
    Mr. Santa. Yes, sir.
    Mr. Green. Just answer ``yes'' or ``no'': The testimony was 
that there is a 90 percent approval rating within the time 
frame that is the FERC rules right now? Is that correct?
    Mr. Markarian. That is what I heard.
    Mr. Green. OK. Is that your experience, though, in filing 
for applications?
    Mr. Markarian. I wouldn't have any evidence to counter what 
we heard here today. My only point is we have to plan for the 
next 20, 25, and 30 years, when, I think it has been conceded, 
pipeline development is going to be ramped up significantly 
because the ability to harness gas is going to go in that same 
direction.
    Mr. Green. Well, and I agree. But if it is 90 percent now--
and, you know, there may be some unintended consequences of the 
legislation I am concerned of, including saying, well, we don't 
have the time, we just have to deny the permit.
    And believe me, I understand, where I come from, the need 
for expansion of natural gas. Some of you may have heard. I 
have gone through Eagle Ford at night, and there is so much 
flaring there. One, environmentally bad, but also I know 
everyone who is drilling those wells would like to have a 
market for that gas. And so we need to expand it. I am not so 
sure, the way that it is drafted, this legislation will do it.
    But the other experiences--Mr. Santa, do you agree, or 
INGAA, that 90 percent is what FERC is doing now?
    Mr. Santa. I have no reason to dispute it. We think that 
the FERC Office of Energy Projects does a good job.
    However, the one point I would make in addition is that 
FERC's admirable record doesn't address the delays and the need 
to get all of the other permits from Federal and State agencies 
that are required before a pipeline can commence construction. 
And so the FERC record only answers part of the issues raised 
by Mr. Pompeo's bill.
    Mr. Green. And I agree that that--but, you know, with this 
legislation, I don't know if FERC is going to be able to tell 
the Corps of Engineers or even EPA or even a State agency 
that--like I said, if a State has a unified application 
process, instead of having different States--in fact, I will 
probably get that from FERC, on how many States have that. I 
would assume Texas and Louisiana have some type of one-stop 
shopping for pipeline permits, just because we do them a lot. 
And maybe the States that are not--and I know somebody said 
something about, we are going to have pipelines in upper New 
York. You know, most of my drillers say, first, we need to get 
a permit to worry about a pipeline. And so we haven't had a 
permit in upstate New York on some of the success in the 
Marcellus Shale.
    Mr. Santa, I appreciate you being here and worked for INGAA 
for years. And I recognize the need for additional capacity, 
particularly in my State and around the country. Namely, my 
concern, though, is the unintended consequences, namely the 
potential for agencies to deny permits simply on the grounds it 
lacks sufficient times for inadequate and legally defensible 
review or any other scenario if it deemed approved.
    I would like to remind my colleagues and the majority, we 
did this once before and then last year when we required the 
President to approve a pipeline within 60 days, or deemed it 
approved, and he denied it. I would worry that some of our 
pipelines that are so far down the road, because there may be a 
problem with getting a report back from some agency, would just 
say we will deny it and then starting over again. So that is my 
worry.
    Mr. Santa, are you worried about the potential denials? And 
I know earlier in a question you said, if it is a ``no,'' it is 
a ``no.'' But what happens when they deny it? Filing a lawsuit 
virtually guarantees additional delay.
    Mr. Santa. Well, I think that, you know, as Mr. Markarian 
said, sometimes a definite ``no'' is better than an indefinite 
``maybe'' in terms of businesses and their planning.
    I also think that, you know, as I have noted, this bill 
establishes a two-way street. I mean, it will hold the 
permitting agencies more accountable, but, quite frankly, the 
pipeline industry is going to be more accountable for filing 
complete, timely applications so as to not put the agency in 
that bind and produce that undesirable result.
    Mr. Green. And I know that hopefully there will be an 
amendment that would talk about a completed application before 
the time starts running so you have that. And I don't think the 
bill actually says that now.
    And I understand you would rather have a ``yes'' or ``no'' 
than a ``maybe'' if a ``maybe'' would delay, would get you 
further down the road. But that ought to be the completed 
application process. That ought to be decided up front when you 
get that completed application.
    Commissioner Moeller also warned that a 90-day deadline may 
force agencies to add burdensome conditions as a way to protect 
themselves from accusations of insufficient review. Is INGAA or 
any of you on the panel concerned about that?
    I know, obviously, I am interested in building pipelines to 
handle both the natural gas but also, you know, to get it to a 
market, whether it be an export market that I support or 
either, you know, power generation.
    Mr. Santa. I mean, agencies frequently condition permits 
today. So I think the notion of receiving conditions in 
connection with an environmental permit is not something new. 
And if it leads the agencies to do that to ensure that all, you 
know, bases are covered, I think that is one of the 
consequences.
    Mr. Green. OK.
    Mr. Markarian. And I think if an agency acts capriciously 
or in a way that it shouldn't, that brings heat of its own on 
the agency. So I think we can count on the agencies to act in 
good faith to--if it is a denial, a denial in good faith.
    Mr. Green. Yes. Well, and some of you know, I have been 
around long enough that I know that I had problems with FERC, 
and I know Mr. Kessler does. And you may have been on the staff 
when we had some battles at FERC over the years.
    But in the last few years, having dealt with them, and, 
like I said, a lot of your members I have worked with literally 
every day almost in the Houston area haven't had a problem with 
FERC. Because if there was, believe me, I would be there 
saying, what are we doing with it?
    Mr. Santa, I have read where permitting time frames are 
even longer now than they were before we streamlined the 
process in the 2005 energy bill. Why is it longer, the time 
frames longer than we did the--as Joe Barton and I brag about 
all the time.
    Mr. Santa. Mr. Green, I am not sure there is any causal 
connection between the EPAct 2005 provisions and what has 
happened.
    The INGAA Foundation report that we reference in our 
testimony had a survey and then more in-depth interviews with a 
subset of those pipeline companies. There were a variety of 
reasons identified, including inexperience on the part of the 
agencies in dealing with linear projects like this, other 
priorities at the agencies, interagency disputes, and also, in 
some instances, quite frankly, deficiencies on the part of the 
pipeline applicants.
    But, as the report noted, probably the main recommendation 
coming out of there was providing some teeth, some 
enforceability to the EPAct 2005 provisions to prompt the 
incentive to address all of that.
    Mr. Whitfield. The gentleman's time has expired.
    Mr. Green. Thank you, Mr. Chairman, for your courtesy.
    Mr. Whitfield. That concludes today's hearing on H.R. 1900. 
I want to thank those of us you who joined us today. We, as I 
said, appreciate your insights, your suggestions, your 
thoughts. And we have all looked at your opening statements, 
and we look forward to working with you as we move forward to 
address these many complicated energy issues. So thank you.
    And that concludes today's hearing.
    The record will remain open for 10 days.
    Mr. Whitfield. Thank you.
    [Whereupon, at 12:50 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
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