[House Report 113-269]
[From the U.S. Government Publishing Office]


113th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    113-269

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



 
               NATURAL GAS PIPELINE PERMITTING REFORM ACT

                                _______
                                

 November 18, 2013.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

  Mr. Upton, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 1900]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 1900) to provide for the timely consideration of 
all licenses, permits, and approvals required under Federal law 
with respect to the siting, construction, expansion, or 
operation of any natural gas pipeline projects, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     3
Hearings.........................................................     5
Committee Consideration..........................................     5
Committee Votes..................................................     5
Committee Oversight Findings.....................................     8
Statement of General Performance Goals and Objectives............     8
New Budget Authority, Entitlement Authority, and Tax Expenditures     8
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......     8
Committee Cost Estimate..........................................     8
Congressional Budget Office Estimate.............................     8
Federal Mandates Statement.......................................     9
Duplication of Federal Programs..................................     9
Disclosure of Directed Rule Makings..............................     9
Advisory Committee Statement.....................................     9
Applicability to Legislative Branch..............................     9
Section-by-Section Analysis of the Legislation...................    10
Changes in Existing Law Made by the Bill, as Reported............    10
Dissenting Views.................................................    12

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Natural Gas Pipeline Permitting Reform 
Act''.

SEC. 2. REGULATORY APPROVAL OF NATURAL GAS PIPELINE PROJECTS.

  Section 7 of the Natural Gas Act (15 U.S.C. 717f) is amended by 
adding at the end the following new subsection:
  ``(i)(1) The Commission shall approve or deny an application for a 
certificate of public convenience and necessity for a prefiled project 
not later than 12 months after receiving a complete application that is 
ready to be processed, as defined by the Commission by regulation.
  ``(2) The agency responsible for issuing any license, permit, or 
approval required under Federal law in connection with a prefiled 
project for which a certificate of public convenience and necessity is 
sought under this Act shall approve or deny the issuance of the 
license, permit, or approval not later than 90 days after the 
Commission issues its final environmental document relating to the 
project.
  ``(3) The Commission may extend the time period under paragraph (2) 
by 30 days if an agency demonstrates that it cannot otherwise complete 
the process required to approve or deny the license, permit, or 
approval, and therefor will be compelled to deny the license, permit, 
or approval. In granting an extension under this paragraph, the 
Commission may offer technical assistance to the agency as necessary to 
address conditions preventing the completion of the review of the 
application for the license, permit, or approval.
  ``(4) If an agency described in paragraph (2) does not approve or 
deny the issuance of the license, permit, or approval within the time 
period specified under paragraph (2) or (3), as applicable, such 
license, permit, or approval shall take effect upon the expiration of 
30 days after the end of such period. The Commission shall incorporate 
into the terms of such license, permit, or approval any conditions 
proffered by the agency described in paragraph (2) that the Commission 
does not find are inconsistent with the final environmental document.
  ``(5) For purposes of this subsection, the term `prefiled project' 
means a project for the siting, construction, expansion, or operation 
of a natural gas pipeline with respect to which a prefiling docket 
number has been assigned by the Commission pursuant to a prefiling 
process established by the Commission for the purpose of facilitating 
the formal application process for obtaining a certificate of public 
convenience and necessity.''.

                          Purpose and Summary

    H.R. 1900, Natural Gas Pipeline Permitting Reform Act, was 
introduced by Representative Mike Pompeo (together with 
Representatives Matheson, Olson, Gardner, and Johnson of Ohio) 
on May 9, 2013. The legislation will help address the critical 
need to build new natural gas pipelines and improve upon the 
existing pipeline infrastructure by creating greater regulatory 
certainty in the permitting process. The legislation would 
require that the Federal Energy Regulatory Commission (FERC) 
approve or deny a requested pipeline certificate no later than 
12 months after receiving a complete application that is ready 
to be processed and has engaged in the pre-filing process. It 
also would codify FERC's requirements that all relevant 
agencies approve or deny a permit application within 90 days 
after FERC's notice of completion of the final environmental 
document with the possibility of a 30-day extension for certain 
situations. Finally, it would require that a permit shall go 
into effect if an agency fails to issue a response within the 
scheduled timeframes, with an allowance for the agency to 
submit conditions to be incorporated into the permit if they 
are consistent with the final environmental document.

                  Background and Need for Legislation

    Over the course of the 112th Congress and the first session 
of the 113th Congress, the Subcommittee on Energy and Power has 
held over a dozen hearings that have touched on both the growth 
in production and demand of natural gas in the United States 
that has occurred in recent years.\1\ The growth in domestic 
production has made the United States the top producer of 
natural gas and petroleum in the world.\2\ This transformation 
in the domestic energy landscape is a result of new extraction 
techniques developed by the energy industry and the access 
afforded by non-Federal lands that are enriched with an 
abundance of resources. The growth in natural gas production is 
happening in a number of States, including Texas, Pennsylvania, 
Colorado, and North Dakota.
---------------------------------------------------------------------------
    \1\A list of all Subcommittee on Energy and Power hearings can be 
found at http://energycommerce.house.gov/hearings. 
    \2\U.S. Energy Information Administration, U.S. expected to be 
largest producer of petroleum and natural gas hydrocarbons in 2013, 
October 4, 2013.
---------------------------------------------------------------------------
    The growth in domestic production also has led to an 
increase in demand for natural gas across the country. This 
increase has led to a critical need to build new infrastructure 
to move natural gas from areas where it is being produced to 
areas of high demand. The growth in natural gas production has 
helped to create growth in the manufacturing sector and has 
created international demand for LNG exports, especially to our 
allies and trading partners across the globe. The biggest 
growth in demand has been and will continue to be in our 
nation's electric generation sector, where low natural gas 
prices and a suite of new environmental regulations are forcing 
more coal-fired generating units into retirement and preventing 
the construction of new units. According to the Energy 
Information Administration (EIA), the share of natural gas in 
the generation mix has increased from 25 percent in 2011 to 30 
percent in 2012 and will continue as more coal-fired generating 
units are retired.\3\ During a hearing before the Subcommittee 
on Energy and Power on natural gas and electric coordination 
challenges, several witnesses testified that there is an acute 
need for bringing new capacity to markets that need it, such as 
in Northeast States and in the Midwest.\4\ In addition, more 
natural gas pipelines would have the added benefit of providing 
greater regulatory certainty to areas that have a growing need 
for more natural gas resources. It is important that we have a 
regulatory system in place that will meet the growing need to 
allow pipeline infrastructure to transport natural gas from 
where it is produced to where it is needed.
---------------------------------------------------------------------------
    \3\North American Electric Reliability Corporation, ``2012 Long-
Term Reliability Assessment,'' (Nov. 2012) (finding that over 70,000 
megawatts of fossil-fuel fired generating capacity will retire over the 
next 10 years, 90% of which will retire over the next 5 years).
    \4\Subcommittee on Energy and Power hearing on American Energy 
Security and Innovation: The Role of Regulators and Grid Operators in 
Meeting Natural Gas and Electric Coordination Challenges, March 19, 
2013.
---------------------------------------------------------------------------
    The FERC is authorized under section 7 of the Natural Gas 
Act (NGA) to evaluate whether the routes for proposed 
interstate natural gas pipeline projects should be approved. 
FERC conducts the environmental review of each proposed natural 
gas pipeline project as required under the National 
Environmental Policy Act (NEPA). Under the Energy Policy Act of 
2005 (EPAct 2005), FERC is designated as the lead agency for 
coordinating and reviewing natural gas pipeline project 
applications under NEPA and ``all applicable federal 
authorizations.'' As the lead agency, FERC often must 
coordinate with a variety of Federal, State, and local agencies 
where the natural gas pipeline is to be constructed.
    Under Federal law, multiple permits are often required for 
constructing and operating a natural gas pipeline. This 
includes permits under the Clean Water Act, Endangered Species 
Act, and the Federal Land Policy and Management Act. Under 
current FERC regulations, Federal and State agencies 
participate in the development of the NEPA analysis for a 
pipeline project and then are required to complete their 
respective permit application reviews no later than 90 days 
after FERC issues its final environmental document, unless 
another schedule is established by Federal law.
    Despite the increased authority given to FERC under EPAct 
2005, there is growing evidence that FERC lacks the ability to 
enforce agency decisional deadlines related to natural gas 
pipeline applications. A December 2012 study conducted by the 
INGAA Foundation found that delays of more than 90 days have 
risen 28 percent after EPAct 2005's permitting reforms, while 
delays of 180 days or more have risen 20 percent.\5\ A February 
2013 GAO report found the natural gas pipeline permitting 
process to be ``complex.''\6\ A chief cause of these growing 
delays is that there are no enforcement mechanisms or 
consequences if agencies do not complete a permit application 
review within 90 days. Not only does this delay prohibit the 
construction of new natural gas pipelines, it puts the welfare 
and safety of the public at risk by delaying needed 
improvements on existing pipelines. The Subcommittee on Energy 
and Power received testimony about an instance where a pipeline 
operator encountered a delay of over a year to replace a 
deteriorating portion of an existing gas pipeline because of a 
delay from the Army Corps of Engineers that extended 9 months 
beyond the FERC deadline to approve a necessary permit.\7\ This 
delay also increased the cost of the project, which would 
ultimately impact consumers.
---------------------------------------------------------------------------
    \5\INGAA Foundation, Expedited Federal Authorization of Interstate 
Natural Gas Pipelines: Are Agencies Complying with EPAct?, December 21, 
2012.
    \6\Government Accountability Office, Interstate and Intrastate 
Natural Gas Permitting Processes Include Multiple Steps, and Time 
Frames Vary, February, 2013.
    \7\Testimony by Donald F. Santa, President and CEO of INGAA, before 
the Subcommittee on Energy and Power, H.R. 1900, the Natural Gas 
Pipeline Permitting Reform Act, July 9, 2013.
---------------------------------------------------------------------------
    FERC Commissioner Philip Moeller commented on the ability 
of FERC to hold agencies accountable at a hearing before the 
Subcommittee and Energy and Power. He stated, and Commissioner 
Cheryl LaFleur agreed, that ``agencies typically don't have the 
accountability to come back with an answer'' regarding 
necessary permits even with FERC setting deadlines.\8\ 
Commissioner Moeller went on to say that ``if you created some 
timeline of accountability, I think [the agencies] would be a 
lot more responsive.'' This timeline and accountability is what 
H.R. 1900 seeks to accomplish.
---------------------------------------------------------------------------
    \8\Subcommittee on Energy and Power hearing on American Energy 
Security and Innovation: The Role of Regulators and Grid Operators in 
Meeting Natural Gas and Electric Coordination Challenges, March 19, 
2013.
---------------------------------------------------------------------------
    In the event an agency fails to act on a completed permit 
application within the scheduled timeframe, the completed 
application shall go into effect, with the allowance for an 
agency to submit conditions to be incorporated if the 
conditions are consistent with the final environmental 
document. It builds on the precedent set in law in the EPAct 
2005 by creating a reasonable and clear timeline for agencies 
that will not start until after the completion of the NEPA 
environmental review. Therefore, it is important to note that 
the Federal or State agencies subjected to this timeline will 
have been in consultation with FERC and the project developer 
for 12 to 18 months, and sometimes longer.
    To respond to concerns raised about this legislation 
creating timelines for authorizations or approvals from 
potentially unknowing agencies, an amendment was adopted at the 
Committee markup which modified the bill to ensure that the 
triggering mechanism for this timeline is limited to those 
projects that participate in FERC's pre-filing process. The 
FERC pre-filing process is a multi-month process where an 
applicant studies potential site locations, identifies 
stakeholders, and begins the work on NEPA compliance. FERC must 
formally approve the pre-filing process and begin a project 
review in order to resolve many issues before an application is 
formally filed with FERC.
    H.R. 1900 builds upon the bipartisan EPAct 2005 precedent 
that set FERC as lead agency under the NEPA, while creating a 
regulatory process that is responsive to the needs and demands 
of the growing application of natural gas to new and emerging 
sectors within the United States.

                                Hearings

    The Subcommittee on Energy and Power held a hearing on H.R. 
1900, Natural Gas Pipeline Permitting Reform Act, on July 9, 
2013. The Subcommittee received testimony from:
           The Honorable Philip D. Moeller, 
        Commissioner, Federal Energy Regulatory Commission;
           Mr. David Markarian, Vice President, 
        Governmental Affairs, NextEra Energy, Inc.;
           Ms. Maya K. van Rossum, The Delaware 
        Riverkeeper, Delaware Riverkeeper Network;
           Mr. Rick Kessler, President, Board of 
        Directors, Pipeline Safety Trust;
           E. Alex Paris III; and
           Donald F. Santa, Jr., President and CEO, 
        INGA.

                        Committee Consideration

    On July 9 and 10, 2013, the Subcommittee on Energy and 
Power met in open markup session and approved H.R. 1900 for 
full Committee consideration, without amendment, by a roll call 
vote of 17 yeas and 9 nays. On July 16 and 17, 2013, the 
Committee on Energy and Commerce met in open markup session and 
ordered H.R. 1900 favorably reported to the House, as amended, 
by a roll call vote of 28 yeas and 14 nays.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. A 
motion by Mr. Upton to order H.R. 1900 favorably reported to 
the House, as amended, was agreed to by a roll call vote of 28 
ayes and 14 nays. The following reflects the recorded votes 
taken during the Committee consideration:


                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held hearings and made 
findings that are reflected in this report.

         Statement of General Performance Goals and Objectives

    H.R. 1900 would provide greater certainty to and help 
expedite the federal review process for natural gas pipeline 
permit applications.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
1900, would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

       Earmark, Limited Tax Benefits, and Limited Tariff Benefits

    In compliance with clause 9(e), 9(f), and 9(g) of rule XXI 
of the Rules of the House of Representatives, the Committee 
finds that H.R. 1900 contains no earmarks, limited tax 
benefits, or limited tariff benefits.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                                    August 2, 2013.
Hon. Fred Upton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1900, the Natural 
Gas Pipeline Permitting Reform Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Megan 
Carroll.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 1900--Natural Gas Pipeline Permitting Reform Act

    Under section 7 of the Natural Gas Act, the Federal Energy 
Regulatory Commission (FERC) reviews applications to construct 
and operate interstate natural gas pipelines. Decisions 
pertaining to such applications depend on regulatory activities 
carried out by a variety of other federal agencies, as well as 
state and local governments pursuant to various other laws. 
H.R. 1900 would amend the Natural Gas Act to require FERC and 
other affected agencies to complete regulatory activities and 
reviews within timeframes specified in the bill.
    Based on information from FERC and other federal agencies 
that regulate aspects of interstate natural gas pipelines, CBO 
estimates that implementing H.R. 1900 would have no significant 
impact on the federal budget. The bill would not affect the 
scope of federal agencies' responsibilities in overseeing such 
pipelines, and CBO expects that meeting the timeframes 
specified in the bill would not require a significant change in 
the level of discretionary funding provided to affected 
agencies to meet their regulatory functions.
    Enacting H.R. 1900 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply. 
H.R. 1900 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Megan Carroll. 
The estimate was approved by Peter H. Fontaine, Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                    Duplication of Federal Programs

    No provision of H.R. 1900 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that enacting H.R. 1900 
specifically directs to be completed 0 rule makings within the 
meaning of 5 U.S.C. 551.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1--Short Title

    Section 1 provides the short title of the ``Natural Gas 
Pipeline Permitting Reform Act.''

Section 2--Regulatory Approval of Natural Gas Pipeline Projects

    Section 2 of the legislation amends section 7 of the NGA by 
adding two new subsections, (i) and (j).
    New subsection (i) directs the FERC to approve or deny an 
application for a certificate of public convenience and 
necessity for the siting, construction, expansion, or operation 
of any prefiled natural gas pipeline project not later than 12 
months after receiving a complete application that is ready to 
be processed.
    New subsection (j)(1) requires any agency responsible for 
issuing any license, permit, or approval required under Federal 
law in connection with the project for which a certificate of 
public convenience and necessity is sought under the NGA to 
approve or deny the issuance of the license, permit, or 
approval within 90 days after FERC issues its final 
environmental document relating to the project.
    New subsection (j)(2) provides that an agency may request 
FERC to extend the time period under paragraph (j)(1) by 30 
days. FERC is required to grant the extension if the agency 
demonstrates it is necessary because of unforeseen 
circumstances beyond the agency's control.
    New subsection (j)(3) provides that if an agency does not 
approve or deny the issuance of the license, permit, or 
approval within the 90 day time period (or 120 days if a 30 day 
extension is granted), such license, permit, or approval shall 
go into effect.
    New subsection (j)(4) provides that if an agency does not 
approve or deny the issuance of the license, permit, or 
approval within the time period specified under (j)(2) or 
(j)(3), such license, permit, or approval shall take effect 
upon the expiration of 30 days after the end of such period. 
FERC shall incorporate into the license, permit, or approval 
any conditions proffered by the agency that FERC does not find 
are inconsistent with the final environmental document.
    New subsection (j)(5) defines the term ``prefiled project'' 
to mean a project for the siting, construction, expansion, or 
operation of a natural gas pipeline with respect to which a 
prefiling docket number has been assigned by FERC for the 
purpose of facilitating the formal application process for 
obtaining a certificate of public convenience and necessity.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

NATURAL GAS ACT

           *       *       *       *       *       *       *



            extension of facilities; abandonment of service

  Sec. 7. (a) * * *

           *       *       *       *       *       *       *

  (i)(1) The Commission shall approve or deny an application 
for a certificate of public convenience and necessity for a 
prefiled project not later than 12 months after receiving a 
complete application that is ready to be processed, as defined 
by the Commission by regulation.
  (2) The agency responsible for issuing any license, permit, 
or approval required under Federal law in connection with a 
prefiled project for which a certificate of public convenience 
and necessity is sought under this Act shall approve or deny 
the issuance of the license, permit, or approval not later than 
90 days after the Commission issues its final environmental 
document relating to the project.
  (3) The Commission may extend the time period under paragraph 
(2) by 30 days if an agency demonstrates that it cannot 
otherwise complete the process required to approve or deny the 
license, permit, or approval, and therefor will be compelled to 
deny the license, permit, or approval. In granting an extension 
under this paragraph, the Commission may offer technical 
assistance to the agency as necessary to address conditions 
preventing the completion of the review of the application for 
the license, permit, or approval.
  (4) If an agency described in paragraph (2) does not approve 
or deny the issuance of the license, permit, or approval within 
the time period specified under paragraph (2) or (3), as 
applicable, such license, permit, or approval shall take effect 
upon the expiration of 30 days after the end of such period. 
The Commission shall incorporate into the terms of such 
license, permit, or approval any conditions proffered by the 
agency described in paragraph (2) that the Commission does not 
find are inconsistent with the final environmental document.
  (5) For purposes of this subsection, the term ``prefiled 
project'' means a project for the siting, construction, 
expansion, or operation of a natural gas pipeline with respect 
to which a prefiling docket number has been assigned by the 
Commission pursuant to a prefiling process established by the 
Commission for the purpose of facilitating the formal 
application process for obtaining a certificate of public 
convenience and necessity.

           *       *       *       *       *       *       *


                            DISSENTING VIEWS

                               I. SUMMARY

    Although it is the stated goal of H.R. 1900 to provide for 
``the timely consideration'' of applications for natural gas 
pipeline projects, the legislative record clearly demonstrates 
that H.R. 1900 would disrupt the Federal Energy Regulatory 
Commission's (FERC or the Commission) existing permitting 
process, which gets natural gas pipelines permitted in a timely 
manner. This bill would establish arbitrary and rigid deadlines 
for FERC and other agencies to issue permits. When faced with 
these time limits, one of two things will happen. Either 
agencies will rush to approve permits that do not adequately 
protect public health, safety, and the environment, or they 
will deny permits when the time limits prevent them from 
completing legally mandated pipeline reviews. No one benefits 
from rushed permitting and unnecessary project denials, not 
even the pipeline companies.
    Under this bill, important environmental permits 
automatically go into effect if an agency does not approve or 
deny them by the arbitrary deadline established in the bill. 
The bill also attempts to transform FERC into a super-
permitting agency that would issue other agency's permits if 
the deadlines are not met. These unworkable provisions would 
have serious environmental, safety, and public health 
consequences. They could result in permits being issued that 
are inconsistent with the requirements of the nation's 
environmental laws.

                  II. THE EXISTING PERMITTING PROCESS

    Under section 7 of the Natural Gas Act, the Federal Energy 
Regulatory Commission reviews applications for the siting, 
construction, and operation of interstate natural gas 
pipelines. A pipeline company cannot construct or operate an 
interstate natural gas pipeline without a FERC-issued 
``certificate of public convenience and necessity.'' An 
applicant is required to demonstrate that construction of the 
pipeline is needed and in the public interest. The certificate 
establishes the terms and conditions for constructing and 
operating a pipeline, including those related to location, 
engineering, rates, and environmental mitigation. Section 7 
grants the right of eminent domain to a pipeline company that 
is issued a certificate of public convenience and necessity by 
FERC.
    The permitting process typically begins with the pre-filing 
phase. In 2002, FERC established a pre-filing phase to expedite 
the certificate application process by engaging stakeholders in 
the identification and resolution of stakeholder concerns prior 
to the filing of a formal application with FERC. This is a 
voluntary phase that is used by about two-thirds of applicants 
for major interstate pipeline projects. During this phase, FERC 
contacts agencies that will be involved in preparing the 
environmental analysis of the project so that the scope of the 
environmental analysis can be defined and public outreach can 
begin.
    Once pre-filing activities are complete, or if the 
applicant chose to skip the pre-filing phase, the applicant 
submits an application for a certificate. During the 
application phase, the environmental analysis (either an 
Environmental Impact Statement or an Environmental Assessment) 
is prepared by FERC with the assistance of the cooperating 
agencies that have jurisdiction over aspects of the permitting. 
FERC also conducts non-environmental review and analysis to 
address engineering, tariff (rates and terms and conditions), 
policy, and accounting issues. FERC may place conditions on a 
certificate, such as obtaining all necessary federal and state 
permits and authorizations.
    Depending on the details of a project, a number of agencies 
are responsible for evaluating permit applications under 
different statutes and participating in the environmental 
review process. For example, the Army Corps of Engineers has 
authority to issue wetlands permits under section 404 of the 
Clean Water Act and authorizations affecting navigable waters 
under the Rivers and Harbors Act of 1899. The Fish and Wildlife 
Service is generally responsible for administering the 
Endangered Species Act, while the Bureau of Land Management is 
primarily responsible for issuing right-of-way permits for 
natural gas pipelines that cross federal lands. State 
environmental agencies have delegated authorities under the 
Clean Water Act and Clean Air Act for water quality 
certifications, water pollution discharge permits, and air 
emissions permits.
    Section 313 of the Energy Policy Act of 2005 amended the 
Natural Gas Act to designate FERC as the lead agency in 
preparing the environmental analysis and require FERC to 
establish a schedule for all necessary federal permits and 
authorizations. FERC established regulatory deadlines in 2006. 
Under the regulation, federal and state agencies are required 
to make final decisions on requests for federal authorizations 
no later than 90 days after FERC issues its final environmental 
document ``unless a schedule is otherwise established by 
federal law.''\1\ Section 313 provided the remedy of a petition 
to the U.S. Court of Appeals for the DC Circuit for an alleged 
failure of an agency to issue, condition, or deny a permit 
within the established deadlines
---------------------------------------------------------------------------
    \1\18 C.F.R. Sec. 157.22.
---------------------------------------------------------------------------

             III. SECTION-BY-SECTION ANALYSIS OF H.R. 1900

    As amended during markup, H.R. 1900 amends section 7 of the 
Natural Gas Act to add a new subsection. The new subsection 
(i)(1) requires FERC to approve or deny an application for a 
certificate of public convenience and necessity for a pre-filed 
project within 12 months after receiving a complete 
application.
    The new subsection (i)(2) applies to any federal or state 
agency responsible for issuing any license, permit, or approval 
required under federal law in connection with the siting, 
construction, expansion, or operation of any pre-filed 
interstate natural gas pipeline for which a certificate is 
sought. The provision requires any such agency to approve or 
deny the issuance of the license, permit, or approval not later 
than 90 days after FERC issues its final environmental document 
for the pipeline project. FERC may extend the deadline by 30 
days if an agency demonstrates that it cannot otherwise 
complete the process required to approve or deny the license, 
permit, or approval, and therefore will be compelled to deny 
the license, permit, or approval. Under the new subsection 
(i)(4), if an agency does not approve or deny the issuance of 
the license, permit, or approval within the deadline, it 
automatically goes into effect after 30 days. FERC is directed 
to incorporate into the terms of such license, permit, or 
approval any conditions submitted by an agency that missed the 
deadline that FERC does not find are inconsistent with the 
final environmental document.

                   IV. POTENTIAL IMPACTS OF H.R. 1900

    The bill will disrupt the functioning permitting process 
for interstate natural gas pipelines by arbitrarily limiting 
the time that FERC and other agencies have to review pipeline 
applications. The result will be rushed permitting and 
unnecessary project denials. The bill also creates an 
unworkable process in which FERC will act as a super-permitting 
agency, writing and issuing the permits of other agencies.
A. The Bill attempts to solve a problem that does not exist
    H.R. 1900 aims to solve a problem that does not exist. The 
Government Accountability Office (GAO) has concluded that 
FERC's pipeline permitting is predictable and consistent and 
gets pipelines built.\2\
---------------------------------------------------------------------------
    \2\U.S. Government Accountability Office, Pipeline Permitting: 
Interstate and Intrastate Natural Gas Permitting Processes Include 
Multiple Steps, and Time Frames Vary (Feb. 15, 2013) (GAO-13-221).
---------------------------------------------------------------------------
    FERC data shows that, from 2009 to 2012, the Commission 
approved 69 major natural gas pipeline projects, spanning over 
3,000 miles in 30 states and with a total capacity of nearly 30 
billion cubic feet per day.\3\ The average time from filing to 
approval was under nine and a half months. According to 
Commissioner Moeller's testimony, FERC decides 90% of 
certificate applications within 12 months.\4\
---------------------------------------------------------------------------
    \3\Federal Energy Regulatory Commission, Approved Major Pipeline 
Projects (2009-Present) (online at www.ferc.gov/industries/gas/indus-
act/pipelines/approved-projects.asp).
    \4\House Committee on Energy and Commerce, Subcommittee on Energy 
and Power, Testimony of Philip D. Moeller, Commissioner, Federal Energy 
Regulatory Commission, Hearing on H.R. 1900, 113th Cong. (Jul. 9, 
2013).
---------------------------------------------------------------------------
    The pipeline companies agree that the process is working 
well. The Interstate Natural Gas Association of America has 
testified that more than 12,000 miles of new interstate 
pipeline capacity was placed into service between January 2003 
and March 2013.\5\ When the Chief Executive Officer of Dominion 
Energy testified on behalf of the pipeline companies in May 
2013, he told the Subcommittee on Energy and Power that ``the 
industry can add new pipeline capacity in a timely, market-
responsive manner.''\6\ He also testified 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.'' At the July 2013 hearing on H.R. 1900, the 
pipeline trade association testified that the FERC permitting 
process ``is generally very good.''\7\
---------------------------------------------------------------------------
    \5\House Committee on Energy and Commerce, Subcommittee on Energy 
and Power, Testimony of Gary Sypolt, on behalf of the Interstate 
Natural Gas Association of Amercia, Hearing on Grid Reliability 
Challenges in a Shifting Energy Resource Landscape, 113th Cong. (May 9, 
2013).
    \6\Id.
    \7\House Committee on Energy and Commerce, Subcommittee on Energy 
and Power, Testimony of Donald F. Santa, President and Chief Executive 
Officer, Interstate Natural Gas Association of America, Hearing on H.R. 
1900, 113th Cong. (Jul. 9, 2013).
---------------------------------------------------------------------------
    At the Subcommittee on Energy and Power markup, Rep. 
Dingell offered an amendment to replace the bill's problematic 
provisions with a directive to GAO to examine FERC's permitting 
process with a specific focus on delays. Under the amendment, 
GAO would have determined if the process is actually 
experiencing delays and identified potential solutions to any 
such problems. It would have allowed the Committee to get the 
facts and fully understand the permitting process before making 
changes that could have serious unintended consequences. The 
Dingell amendment was defeated by voice vote.
    At the full committee markup of the bill, Rep. Waxman and 
Rep. McNerney offered amendments to address real problems 
related to interstate natural gas pipelines. Under the Waxman 
amendment, the clock would not start running on the 12-month 
permitting deadline unless the pipeline operator demonstrated 
that it would not charge its customers for natural gas that 
leaks from the pipeline. Under the McNerney amendment, the 
clock would not start running unless the application included 
sufficient information to demonstrate that the pipeline project 
would utilize available designs, systems, and practices to 
minimize climate-warming methane emissions to the extent 
practicable. Neither amendment was adopted.

B. The Bill Rushes the Permitting Process, Short-Circuiting 
        Environmental Review and Leading to Unnecessary Permit Denials

    Although 90% of pipeline applications are approved in less 
than 12 months, there are complex pipeline projects for which 
FERC likely will not be able to issue a certificate of public 
convenience and necessity within 12 months. The time required 
to issue a certificate is highly variable and depends on the 
complexity of the project, the length of the proposed pipeline, 
the proposed path of the pipeline, and the degree of public 
concern, among other factors. Completing an environmental 
impact statement for a complex pipeline project in less than 12 
months may not be feasible in every case.
    However, under this bill, the same rigid deadline applies 
to every pipeline project. It applies to a straightforward 30-
mile pipeline far from population centers that crosses no 
rivers--and a complex, 500-mile pipeline that goes through a 
major population center and crosses a dozen rivers.
    A 12-month deadline for all applications could result in a 
truncated or inadequate environmental analysis, which could 
adversely impact FERC decision making and potentially expose a 
FERC-issued certificate to litigation risk. At the July 9, 
2013, Energy and Power Subcommittee hearing on H.R. 1900, the 
President of the Pipeline Safety Trust noted that pipeline 
routing decisions affect public safety and argued that an 
abbreviated review process would ``absolutely'' put more people 
at risk.\8\ Moreover, 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. The 
power of eminent domain should not be conferred without FERC 
taking the time it needs for thorough analysis and thoughtful 
decision-making.
---------------------------------------------------------------------------
    \8\House Committee on Energy and Commerce, Subcommittee on Energy 
and Power, Testimony of Rick Kessler, President, Pipeline Safety Trust, 
Hearing on H.R. 1900, 113th Cong. (Jul. 9, 2013).
---------------------------------------------------------------------------
    If FERC cannot finish the analysis necessary to produce a 
complete certificate by the deadline that adequately addresses 
all of the environmental, engineering, tariff, and accounting 
issues presented by a pipeline application, FERC may be 
required to dismiss the application. In other words, requiring 
FERC to either approve or deny an application in 12 months may 
result in FERC denying applications that would have been 
granted if the Commission had adequate time to consider the 
application. This bill, aimed at speeding up FERC permitting, 
could end up having the opposite effect.
    At the July 9, 2013, subcommittee hearing, the career 
Director of FERC's Office of Energy Projects confirmed that the 
12-month time limit may actually lead to more pipeline delays, 
contrary to the sponsors' stated purpose. The nonpartisan staff 
witness testified, ``I do not believe [H.R. 1900] would 
effectively cause pipelines to be permitted faster than they 
are now'' and that if FERC must deny applications that cannot 
be properly reviewed in 12 months, ``quite possibly . . . it 
could take longer for certain projects'' to be approved because 
applicants will be forced to re-file and start over.\9\
---------------------------------------------------------------------------
    \9\House Committee on Energy and Commerce, Subcommittee on Energy 
and Power, Testimony of Jeff Wright, Director of the Office of Energy 
Projects, Federal Energy Regulatory Commission, Hearing on H.R. 1900, 
113th Cong. (Jul. 9, 2013).
---------------------------------------------------------------------------
    Similarly, the 90- or 120-day deadline for federal and 
state agencies to approve or deny applications for all other 
permits or approvals required by federal law may lead to either 
pipeline permit denials or legally dubious permits that do not 
adequately protect public health, safety, and the environment. 
Agencies are required to comply with their statutory 
responsibilities under the Clean Water Act, Clean Air Act, 
Endangered Species Act, Rivers and Harbors Act, National 
Historic Preservation Act, Coastal Zone Management Act, Mineral 
Leasing Act, and other statutes. Agencies that cannot complete 
the legally-required analysis necessary to issue a permit or 
authorization within 90 or 120 days of the completion of the 
FERC environmental document may have no choice but to deny the 
application in order to comply with federal law and avoid 
adverse impacts to health, safety, and the environment.
    The Army Corps of Engineers, Environmental Protection 
Agency (EPA), Bureau of Land Management (BLM), and Fish and 
Wildlife Service have all raised concerns about the deadline. 
The Army Corps of Engineers stated: ``If the Corps is bound to 
a specific timeframe and doesn't have the information needed, 
the Corps would be forced to deny applications because of the 
lack of information to demonstrate compliance with Corps 
regulations.''\10\ According to EPA, ``an arbitrary 90 (or 
120)-day deadline for completing these complex reviews would 
increase the likelihood that environmentally harmful discharges 
may occur.''\11\ BLM stated: ``Unduly short timeframes could 
cause the BLM to deny pipeline right-of-way applications rather 
than allow approval to automatically take effect as provided in 
H.R. 1900.''\12\
---------------------------------------------------------------------------
    \10\U.S. Army Corps of Engineers, Technical Analysis: HR 1900 (Jul. 
1, 2013).
    \11\U.S. Environmental Protection Agency, Technical Assistance on 
H.R. 1900--``Natural Gas Pipeline Permitting Act'' (Jul. 8, 2013).
    \12\Bureau of Land Management, H.R. 1900 White Paper (Jul. 9, 
2013).
---------------------------------------------------------------------------
    The bill acknowledges that forcing agencies to approve or 
deny permits in 90 days could result in agencies simply denying 
the permits. The bill explicitly provides agencies an 
additional 30 days if they would otherwise be forced to deny a 
permit. However, that potential extension does not solve the 
problem for permits that require longer than 120 days to 
complete. Permits can be detailed documents with terms and 
conditions to protect public health and the environment. It can 
take time to work out these details for complex projects in 
appropriate and legally defensible ways
    Applying the inflexible permitting deadlines only to 
projects that have gone through FERC's pre-filing process will 
not ameliorate the impacts of these arbitrary deadlines. The 
larger, more complex projects are generally the ones that 
already go through the pre-filing process. Thus, the bill's 
rigid deadlines apply to the projects that will have the 
hardest time meeting those deadlines.
    The bill's 90- or 120-day deadline even applies to permits 
for which an application has not even been filed. The deadline 
applies to all permits that will be needed for a project. But 
under the bill, the clock begins to run when FERC's 
environmental document is complete regardless of whether a 
pipeline company has actually submitted a particular permit 
application. The provision is clearly unworkable in such 
circumstances.

C. The Bill Provides for the Automatic Issuance of Permits

    The bill provides for licenses, permits, and approvals to 
automatically go into effect if an agency does not approve or 
deny them by the arbitrary 90- or 120-day deadline established 
in the bill. This permitting provision broadly applies to the 
Clean Air Act, Clean Water Act, Endangered Species Act, Coastal 
Zone Management Act, rights-of-way through federal lands, and 
other statutes. This unworkable provision would have serious 
environmental consequences. It could result in permits being 
issued that are inconsistent with the requirements of the 
nation's environmental laws.
    Automatically granting important licenses and permits 
without any agency determination that statutory requirements 
have been met creates a significant risk that pipelines will 
have unmitigated adverse environmental, health, or cultural 
impacts. The provision also may increase the likelihood that an 
agency that cannot complete the permitting process by the 
deadline will deny the license or permit rather than have it 
automatically go into effect.
    The Committee received technical comments from some of the 
agencies whose permitting processes would be affected by this 
provision. The agencies responsible for implementing these laws 
raised major concerns about the automatic issuance of permits. 
The Army Corps of Engineers stated: ``This legislation could 
allow certain activities to proceed despite potential adverse 
and significant impacts to aquatic resources and without 
appropriate compensatory mitigation.''\13\ According to EPA, 
the bill ``would severely limit states' ability to ensure that 
discharges comply with water quality standards'' and ``could 
potentially result in sources receiving an inadequate permit or 
a permit that does not assure compliance with the Clean Air 
Act.''\14\ The Fish and Wildlife Service stated that the bill 
is in ``direct conflict'' with the National Wildlife Refuge 
statute and that ``automatic approval of an eagle permit 
contravenes the Bald and Golden Eagle Protection Act.''\15\
---------------------------------------------------------------------------
    \13\U.S. Army Corps of Engineers, Technical Analysis: HR 1900 (Jul. 
1, 2013).
    \14\U.S. Environmental Protection Agency, Technical Assistance on 
H.R. 1900--``Natural Gas Pipeline Permitting Act'' (Jul. 8, 2013).
    \15\U.S. Fish and Wildlife Service, H.R. 1900 White Paper (Jul. 9, 
2013).
---------------------------------------------------------------------------
    Automatically issuing permits without an agency confirming 
that the legal requirements are met also increases the risk of 
litigation and undermine the public's acceptance of interstate 
natural gas pipelines going through their communities.
    Moreover, it is unclear how a license or permit that has 
not yet been written could simply go into effect. These permits 
are not yes or no decisions. They often are detailed documents 
that include emissions limits, technology or operating 
requirements, and conditions to ensure the environment is 
protected. At the hearing on the bill, witnesses were asked 
what it would mean for a permit that might not even be written 
to automatically take effect if a deadline is missed. No one 
could explain how this provision could be implemented.
    At the full committee markup, Rep. Rush offered an 
amendment to strike the automatic permitting provision. The 
amendment would have ensured that permits are not issued 
without the responsible agencies confirming that they meet the 
underlying statutory requirements. The Rush amendment was 
defeated by a vote of 17 to 27.

D. The Bill Requires FERC to Issue Other Agencies' Permits

    In an attempt to cobble together a solution to the problem 
of how unwritten permits could automatically take effect, the 
bill requires FERC to act as a ``super-permitting'' agency. The 
bill charges FERC with incorporating conditions offered by the 
other agencies into the automatically-issued permits. 
Apparently, FERC is supposed to write and issue the permits 
itself if a responsible agency misses the arbitrary deadline 
established in the bill. FERC decides whether or not to include 
conditions submitted by the agencies with expertise, the 
agencies Congress empowered to issue the permits in the first 
place.
    Under this bill, FERC would be issuing BLM rights-of-way 
through federal lands. FERC would be figuring out water 
discharge limits and determining which technologies should be 
employed to reduce air pollution emissions. FERC would be 
issuing permits to protect wetlands and even bald eagles. These 
are functions that FERC does not have the expertise or 
resources to carry out. Attempting to transform FERC into a 
super-permitting agency would be a mistake.
    For the reasons stated above, we dissent from the views 
contained in the Committee's report.

                                   Henry A. Waxman,
                                           Ranking Member.
                                   Bobby L. Rush,
                                           Ranking Member,
                                             Subcommittee on Energy and 
                                               Power.

                                  
