In a recent article published in Law360, John F. Povilaitis and Alan M. Seltzer, shareholders in Buchanan’s energy practice, describe how the November rejection of the Keystone XL pipeline demonstrates how the process for pipeline project review is too lengthy. They call upon regulatory bodies in the energy industry to consider how to improve the review process for future pipeline projects, especially the Federal Energy Regulatory Commission’s (FERC) interstate pipeline review process.

Unlike intrastate projects that are located within a single state and are subject to review processes established by state authorities, interstate pipeline projects that cross state lines are subject to review by FERC at the federal level. Because interstate projects can affect local communities, and because intrastate projects can impact interstate service, FERC will often require pipeline projects to have federal, state and local approvals in addition to FERC approvals.

To be more efficient, the authors suggest a new approach: a federal-state partnership process. In this approach, state authorities would review the intrastate components of an interstate transmission pipeline project for purposes of line siting issues and state and local permits and approvals.

“Dividing responsibility clearly between FERC and state authorities in this manner would hit the sweet spot of each jurisdiction doing what it does best. It would also provide certainty in timing so that when a FERC approval is received, project developers can move quickly to obtain construction permits and move the transmission pipeline project forward,” explain the authors.

The approach would also require all states to establish a process for review and approval of intrastate pipeline projects (currently, some states, including Pennsylvania, do not have such a process).

Read the full article (subscription required) – “Approving Interstate Pipelines With Intrastate Benefits” (Law360, December 14, 2015)