Docket No. RM26-2-001
In today’s order, the Commission proposes to revise its regulations to establish a new blanket certificate program to authorize certain activities at liquified natural gas (LNG) facilities without case-specific authorizations. Similar to the structure of the pipeline blanket program,1 the Commission proposes a tiered approach, in which activities may be eligible for automatic or 60- or 90-day prior notice authorization. The three tiers intend to reflect a range of projects with different levels of complexity, design modifications, and environmental and safety impacts. I write separately to draw particular attention to the class and scope of activities proposed under the 90-day prior notice procedures and request input from stakeholders regarding the appropriate eligibility conditions and environmental protection safeguards for that proposal.
Since 1982, the Commission has operated a blanket program for interstate gas pipelines to undertake certain well-understood activities without case-specific authorizations. The Commission has twice declined to extend the program to include LNG facilities, finding that, at the time, LNG plants were not within the class of minor, well-understood, routine activities intended for the program. However, given the expertise that the Commission has developed on this topic over the last decade, I support the proposal to extend this effort to the LNG authorization process via the development of a new blanket program and to create parity with how gas pipelines are evaluated.
As the new blanket program is developed, it is essential that the Commission properly tailor the program to both meet our statutory requirements and provide legal durability and permitting certainty for the natural gas industry. Achieving these objectives requires that the program captures the appropriate types of activities without being overly broad. The program’s success will depend on our ability to clearly define the types of activities that are suitable for ex ante blanket authorization—namely, activities that are generally well-understood and have minimal impacts on their surroundings. In contrast, a program without sufficient bounds will likely invite protests or legal challenges. The program will not succeed in its intended outcome if every project is protested and thus made ineligible under the blanket.
The Notice of Proposed Rulemaking (NOPR) includes a reasonable list of activities proposed to be eligible for automatic and 60-day prior notice authorization, as supported by the record compiled through the Notice of Inquiry. The information about the project site and facility design collected and reviewed during the original authorization should be sufficient to understand the impacts of activities that will not expand the project footprint or make only minor modifications to the facilities. However, the Commission needs more information to understand whether we have set the appropriate limits for projects that fall under the 90-day prior notice category, namely those seeking to expand beyond their original facilities’ footprint.
Under the proposed rule, projects that qualify for the 90-day prior notice category will be subject to three conditions: (1) expansion outside of the original facility’s footprint must occupy less than 25 acres of adjacent land or water that has been previously disturbed or developed; (2) expansion outside of the original footprint must comply with all environmental and engineering conditions in the project’s existing authorization; and (3) the facilities must be of the same type as those previously considered and analyzed in the underlying authorization.2 The NOPR does not include a cost limit as a qualifying condition, finding that, unlike the pipeline blanket program, project cost is not an appropriate proxy for level of impact for LNG projects. Instead, we propose to use size of the expansion as a measure to help ensure that projects will not have a significant impact on public safety or the environment.
I am concerned that we do not yet have enough information in the record to justify the selection of a 25-acre limit as a proxy for minimal impact of a proposed project. I understand that a strict non-expansion policy may create additional safety concerns if applicants are incentivized to propose artificially congested development. However, as acknowledged in the order, an additional 25 acres could allow for the construction of projects as large as an additional liquefaction train or five combined-cycle power generation facilities.3 These kinds of large projects have the potential to create substantial new environmental and safety impacts despite being conceptually well-understood. Thus, qualifying such expansion activities raises questions as to whether using size of adjacent land (or water) as a limit could lead to the inclusion of projects larger than what is legally justifiable for a blanket program.
The proposed rule asks stakeholders to provide comment on whether 25 acres beyond plant footprint is an appropriate acreage limitation, and whether the Commission should consider any additional limits on eligibility beyond the three conditions. When evaluating project applications, the Commission must fulfill certain responsibilities under a number of environmental statutes including the National Environmental Policy Act, the Clean Air Act, the Clean Water Act, and the Endangered Species Act. These statutes require detailed analysis of impacts of the project within a certain proposed footprint, but not necessarily the adjacent land and waterways. Under the proposed 90-day prior notice authorization, projects could expand into areas that have not been previously analyzed, even if they do not provide a new or updated environmental review process. I am not yet convinced that allowing project expansions onto a 25-acre adjacent space with the information collected in the 90-day prior notice blanket program will be sufficient to guarantee our compliance with the Commission’s statutory obligations. Thus, I request further comment on the following:
Q1: Should the project applicant be required to demonstrate affirmatively that facilities constructed in areas outside of the existing footprint that have not been previously studied will not have a significant environmental impact?
Further, the proposed rule does not preclude applicants from seeking multiple—and potentially even an unlimited number of—25-acre expansions beyond their original footprint. Though the proposed regulations include language prohibiting blanket authorization holders from segmenting projects as a means of complying with the acreage limitation,4 they do not limit the number of times expansions could be permitted over the lifetime of the facility, nor do they state a minimum length of time required between actions. A project with enough adjacent land that had previously been disturbed or developed could, in theory, double in size—or more—without requiring additional environmental analysis from the Commission. Without a limit on the total amount of development that could occur outside of the authorized footprint of an existing facility or a facility under development, I am concerned about the Commission’s ability to fulfill its statutory duties. Thus, I request stakeholders to submit further comments on the following:
Q2: Should the Commission establish: (1) an upper limit on the number of expansions beyond the project footprint allowed under a single blanket authorization, either in total size or in number of expansion projects; and/or (2) a minimum time period between successive requests?
Given these concerns, I encourage stakeholders to help the Commission build a robust record on the proposed 90-day prior authorization category and its specific eligibility conditions. Ultimately, I believe the Commission can establish a blanket program that accomplishes its goal of increased efficiency while simultaneously complying with its statutory obligations. I look forward to reviewing the expanded record to assess how best to achieve both objectives.
For these reasons, I respectfully concur.