FERC Acting Chairman Willie Phillips got the memo.
The head of the federal regulatory agency tasked with overseeing energy infrastructure development told a cavernous conference hall filled with industry insiders what they had hoped to hear: Phillips has their back when it comes to speeding up decisions on infrastructure projects.
“Building new things,” Phillips said Thursday at CERAWeek by S&P Global in Houston, “is something we are all in agreement on and focused on.”
He specifically noted the need for new natural gas pipelines – a central theme of the conference – to ensure abundant U.S. supplies are distributed domestically and to Gulf Coast export facilities to meet mounting global demand.
Phillips, a former state regulator who joined the Federal Regulatory Energy Commission in 2021 and has led it since January, said government officials “can’t cut corners.” However, they can develop project review standards that include mandates to address potential problems early in the process.
The Democrat, appointed by President Biden, said FERC can also establish reasonable timeframes to provide decisions – think two years, not the five or more years at times companies face now. This, he said, could give developers, as well as the banks and investors backing them, added clarity and confidence needed to proceed with what are typically multi-billion dollar projects that companies cannot afford to see bogged down in bureaucratic red tape.
“We are looking at each and every project in an accelerated way,” Phillips said.
When former Chairman Richard Glick departed last year after the Senate failed to advance his renomination, it left the FERC panel split with two Democrats and two Republicans. However, Phillips said energy reliability and affordability are key issues upon which members of both political parties can find common ground. Democrats may tout greater concern about potential environmental hazards – a principal reason for regulatory holdups in recent years — but all the current FERC members agree the United State needs more energy infrastructure, Phillips said. This notably includes new natural gas pipelines in the near term, he added.
“We need to make sure they are ultimately successfully built,” Phillips said. “When it comes to big things – things that matter – we are not as far apart as our politics would suggest.”
Executives across the natural gas value chain harped on the need for more infrastructure and a more efficient approval process throughout CERAWeek. They said demand in the Lower 48 is steady and global demand for U.S. LNG is rising as populations grow and economies rapidly develop throughout Asia. The need for elevated levels of liquefied natural gas is expected to endure in Europe as well, as countries on the continent look to LNG to supplant their former dependency on Russian gas in the wake of the Kremlin’s war in Ukraine.
Natural gas companies, though, in the midst of developing several LNG facilities, need more pipelines to get fuel to the Gulf Coast for export. Major domestic population centers, from California in the West to states throughout New England, need more conduits to receive gas from basins in other parts of the countries.
“I truly think it’s the golden age right now for natural gas,” Williams CEO Alan Armstrong said at the conference. However, “we’ve got to get out of our own way,” he added, referring to regulatory delays.
He and multiple colleagues called on Congress to pass permitting reform legislation that would set firm time limits on infrastructure project reviews. They also want lawmakers to require legal challenges to demonstrate they have evidence of potential problems in order to proceed in the courts.
Tellurian Inc. CEO Octávio Simões said the global demand for natural gas is strong and building. Without more pipelines to deliver it, however, “we are just watching a car crash” in the form of stranded fuel unable to reach the markets most in need.