FERC's Wood Questions Energy Bill Language On LNG Authority

FERC Chairman Patrick Wood, who announced Wednesday that he will be departing the agency at the end of June, told reporters this week that he's not sure that current language in pending comprehensive energy legislation dealing with the siting of liquefied natural gas (LNG) facilities is "helpful."

In a press briefing at FERC headquarters related to news of his departure, Wood said that the proposed legislation "has a much broader state role than currently exists today, which I think can be used to effectively veto expansion of LNG infrastructure." Lawmakers in the House of Representatives this week began marking up a comprehensive energy bill.

"The main thing we wanted -- and this is what Rep. [Lee] Terry did in his bill -- was actually say the FERC's job is exclusive. Exclusive jurisdiction over LNG permitting, which was kind of a clean, clear, crisp thing that totally addressed the California PUC litigation, but that's not in this bill. The one thing we wanted is the only thing that's not in there," Wood said.

U.S. Rep. Terry, a Republican from Nebraska, earlier this year re-introduced legislation aimed at fostering meaningful expansion of the nation's capacity to receive LNG (see Daily GPI, Feb. 1). The bill mirrors legislation the House lawmaker introduced last May (see Daily GPI, May 21, 2004).

Terry's measure would place jurisdiction for the siting of LNG import terminals with the Federal Energy Regulatory Commission, ending existing jurisdictional conflicts. It also would do the following: make FERC the lead agency for carrying out environmental reviews of LNG projects; clarify the role of states in the siting, construction, expansion or operation of LNG import terminals; set a deadline of one year for review of LNG terminal applications; allow FERC to set a schedule for completion of all federal and state administrative proceedings related to an LNG project; and codify a FERC ruling exempting LNG terminals from the agency's open-access requirements.

The California PUC has challenged FERC's LNG-related jurisdiction in the courts. "Just in case we don't win that case, we would want to have something that reverses a potential decision," Wood said this week. "It's hard to do. Legislators aren't real keen on trying to guess what a court case is going to do until after it's played its course. I understand that. I've certainly been on the other side of that argument."

In an appearance before NGI's 19th annual GasMart conference in New Orleans last month, FERC Commissioner Joseph Kelliher said that the "biggest threat" to the development of new LNG import terminals in the U.S. is the CPUC's challenge to FERC's jurisdiction in this area (see Daily GPI, March 18). (Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.