H. Rept. 115-225 - PROMOTING CROSS-BORDER ENERGY INFRASTRUCTURE ACT115th Congress (2017-2018)
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115th Congress Rept. 115-225
HOUSE OF REPRESENTATIVES
1st Session Part 1
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PROMOTING CROSS-BORDER ENERGY INFRASTRUCTURE ACT
_______
July 17, 2017.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Walden, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 2883]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 2883) to establish a more uniform, transparent,
and modern process to authorize the construction, connection,
operation, and maintenance of international border-crossing
facilities for the import and export of oil and natural gas and
the transmission of electricity, having considered the same,
report favorably thereon with an amendment and recommend that
the bill as amended do pass.
CONTENTS
Purpose and Summary.............................................. 4
Background and Need for Legislation.............................. 4
Committee Action................................................. 7
Committee Votes.................................................. 7
Oversight Findings and Recommendations........................... 11
New Budget Authority, Entitlement Authority, and Tax Expenditures 11
Congressional Budget Office Estimate............................. 11
Federal Mandates Statement....................................... 12
Statement of General Performance Goals and Objectives............ 12
Duplication of Federal Programs.................................. 12
Committee Cost Estimate.......................................... 12
Earmark, Limited Tax Benefits, and Limited Tariff Benefits....... 12
Disclosure of Directed Rule Makings.............................. 12
Advisory Committee Statement..................................... 12
Applicability to Legislative Branch.............................. 13
Section-by-Section Analysis of the Legislation................... 13
Changes in Existing Law Made by the Bill, as Reported............ 14
Exchange of Letters with Additional Committees of Referral....... 22
Dissenting Views................................................. 27
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 ``Promoting Cross-Border Energy
Infrastructure Act''.
SEC. 2. APPROVAL FOR BORDER-CROSSING FACILITIES.
(a) Authorization of Certain Energy Infrastructure Projects at an
International Boundary of the United States.--
(1) Authorization.--Except as provided in paragraph (3) and
subsection (e), no person may construct, connect, operate, or
maintain a border-crossing facility for the import or export of
oil or natural gas, or the transmission of electricity, across
an international border of the United States without obtaining
a certificate of crossing for the border-crossing facility
under this subsection.
(2) Certificate of crossing.--
(A) Requirement.--Not later than 120 days after final
action is taken, by the relevant official or agency
identified under subparagraph (B), under the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et
seq.) with respect to a border-crossing facility for
which a person requests a certificate of crossing under
this subsection, the relevant official or agency, in
consultation with appropriate Federal agencies, shall
issue a certificate of crossing for the border-crossing
facility unless the relevant official or agency finds
that the construction, connection, operation, or
maintenance of the border-crossing facility is not in
the public interest of the United States.
(B) Relevant official or agency.--The relevant
official or agency referred to in subparagraph (A) is--
(i) the Federal Energy Regulatory Commission
with respect to border-crossing facilities
consisting of oil or natural gas pipelines; and
(ii) the Secretary of Energy with respect to
border-crossing facilities consisting of
electric transmission facilities.
(C) Additional requirement for electric transmission
facilities.--In the case of a request for a certificate
of crossing for a border-crossing facility consisting
of an electric transmission facility, the Secretary of
Energy shall require, as a condition of issuing the
certificate of crossing under subparagraph (A), that
the border-crossing facility be constructed, connected,
operated, or maintained consistent with all applicable
policies and standards of--
(i) the Electric Reliability Organization and
the applicable regional entity; and
(ii) any Regional Transmission Organization
or Independent System Operator with operational
or functional control over the border-crossing
facility.
(3) Exclusions.--This subsection shall not apply to any
construction, connection, operation, or maintenance of a
border-crossing facility for the import or export of oil or
natural gas, or the transmission of electricity--
(A) if the border-crossing facility is operating for
such import, export, or transmission as of the date of
enactment of this Act;
(B) if a permit described in subsection (d) for the
construction, connection, operation, or maintenance has
been issued; or
(C) if an application for a permit described in
subsection (d) for the construction, connection,
operation, or maintenance is pending on the date of
enactment of this Act, until the earlier of--
(i) the date on which such application is
denied; or
(ii) two years after the date of enactment of
this Act, if such a permit has not been issued
by such date.
(4) Effect of other laws.--
(A) Application to projects.--Nothing in this
subsection or subsection (e) shall affect the
application of any other Federal statute to a project
for which a certificate of crossing for a border-
crossing facility is requested under this subsection.
(B) Natural gas act.--Nothing in this subsection or
subsection (e) shall affect the requirement to obtain
approval or authorization under sections 3 and 7 of the
Natural Gas Act for the siting, construction, or
operation of any facility to import or export natural
gas.
(C) Oil pipelines.--Nothing in this subsection or
subsection (e) shall affect the authority of the
Federal Energy Regulatory Commission with respect to
oil pipelines under section 60502 of title 49, United
States Code.
(b) Importation or Exportation of Natural Gas to Canada and Mexico.--
Section 3(c) of the Natural Gas Act (15 U.S.C. 717b(c)) is amended by
adding at the end the following: ``In the case of an application for
the importation of natural gas from, or the exportation of natural gas
to, Canada or Mexico, the Commission shall grant the application not
later than 30 days after the date on which the Commission receives the
complete application.''.
(c) Transmission of Electric Energy to Canada and Mexico.--
(1) Repeal of requirement to secure order.--Section 202(e) of
the Federal Power Act (16 U.S.C. 824a(e)) is repealed.
(2) Conforming amendments.--
(A) State regulations.--Section 202(f) of the Federal
Power Act (16 U.S.C. 824a(f)) is amended by striking
``insofar as such State regulation does not conflict
with the exercise of the Commission's powers under or
relating to subsection 202(e)''.
(B) Seasonal diversity electricity exchange.--Section
602(b) of the Public Utility Regulatory Policies Act of
1978 (16 U.S.C. 824a-4(b)) is amended by striking ``the
Commission has conducted hearings and made the findings
required under section 202(e) of the Federal Power
Act'' and all that follows through the period at the
end and inserting ``the Secretary has conducted
hearings and finds that the proposed transmission
facilities would not impair the sufficiency of electric
supply within the United States or would not impede or
tend to impede the coordination in the public interest
of facilities subject to the jurisdiction of the
Secretary.''.
(d) No Presidential Permit Required.--No Presidential permit (or
similar permit) required under Executive Order No. 13337 (3 U.S.C. 301
note), Executive Order No. 11423 (3 U.S.C. 301 note), section 301 of
title 3, United States Code, Executive Order No. 12038, Executive Order
No. 10485, or any other Executive order shall be necessary for the
construction, connection, operation, or maintenance of an oil or
natural gas pipeline or electric transmission facility, or any border-
crossing facility thereof.
(e) Modifications to Existing Projects.--No certificate of crossing
under subsection (a), or permit described in subsection (d), shall be
required for a modification to--
(1) an oil or natural gas pipeline or electric transmission
facility that is operating for the import or export of oil or
natural gas or the transmission of electricity as of the date
of enactment of this Act;
(2) an oil or natural gas pipeline or electric transmission
facility for which a permit described in subsection (d) has
been issued; or
(3) a border-crossing facility for which a certificate of
crossing has previously been issued under subsection (a).
(f) Effective Date; Rulemaking Deadlines.--
(1) Effective date.--Subsections (a) through (e), and the
amendments made by such subsections, shall take effect on the
date that is 1 year after the date of enactment of this Act.
(2) Rulemaking deadlines.--Each relevant official or agency
described in subsection (a)(2)(B) shall--
(A) not later than 180 days after the date of
enactment of this Act, publish in the Federal Register
notice of a proposed rulemaking to carry out the
applicable requirements of subsection (a); and
(B) not later than 1 year after the date of enactment
of this Act, publish in the Federal Register a final
rule to carry out the applicable requirements of
subsection (a).
(g) Definitions.--In this section--
(1) the term ``border-crossing facility'' means the portion
of an oil or natural gas pipeline or electric transmission
facility that is located at an international boundary of the
United States;
(2) the term ``modification'' includes a reversal of flow
direction, change in ownership, change in flow volume, addition
or removal of an interconnection, or an adjustment to maintain
flow (such as a reduction or increase in the number of pump or
compressor stations);
(3) the term ``natural gas'' has the meaning given that term
in section 2 of the Natural Gas Act (15 U.S.C. 717a);
(4) the term ``oil'' means petroleum or a petroleum product;
(5) the terms ``Electric Reliability Organization'' and
``regional entity'' have the meanings given those terms in
section 215 of the Federal Power Act (16 U.S.C. 824o); and
(6) the terms ``Independent System Operator'' and ``Regional
Transmission Organization'' have the meanings given those terms
in section 3 of the Federal Power Act (16 U.S.C. 796).
Purpose and Summary
H.R. 2883, the ``Promoting Cross-Border Energy
Infrastructure Act,'' was introduced by Rep. Mullin (R-OK) and
Rep. Gene Green (D-TX) on June 12, 2017. H.R. 2883 would
establish coordinated procedures to authorize the construction,
connection, operation, and maintenance of international border-
crossing facilities for the import and export of oil and
natural gas and the transmission of electricity. The
legislation would replace the requirements established under
Executive Order that persons obtain a Presidential Permit
before constructing an oil and gas pipeline or electric
transmission facility that crosses the U.S. border between
Canada or Mexico.
Background and Need for Legislation
Trade of oil, gas, and electricity among the United States,
Canada, and Mexico has resulted in one large, integrated North
American market. According to the Congressional Research
Service (CRS), the value of energy trade between the United
States and its North American neighbors exceeded $140 billion
in 2015, with $100 billion in U.S. energy imports and over $40
billion in exports.\1\ The expansion of cross-border energy
transportation infrastructure--pipelines for oil and natural
gas and transmission lines for electricity--is necessary to
enable increased energy trade. A number of new projects are
currently under construction or proposed to further expand
cross-border capacity, but they face considerable Federal
regulatory uncertainty.
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\1\Congressional Research Service. Cross-Border Energy Trade in
North America: Present and Potential. January 30, 2017.
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Congress has not asserted its authority to establish
procedures for permitting cross-border energy infrastructure.
In the absence of a statutorily directed process, agencies have
made decisions regarding cross-border energy infrastructure
within the context of their interpretation of a series of
Executive Orders dating back to the 1950's. Under these Orders,
the Secretary of State has the authority to issue Presidential
permits for cross-border liquids pipelines, the Federal Energy
Regulatory Commission (FERC) for cross-border natural gas
pipelines, and the Department of Energy (DOE) for cross-border
electric transmission facilities.\2\
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\2\The State Department makes permitting decisions based on
directives in Executive Order 11423 (E.O.), as amended by E.O. 13337.
FERC and DOE make permitting decisions in accordance with E.O. 10485,
as amended by E.O. 12038.
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Cross-border electric transmission facilities
The U.S. currently has over 40 cross-border electric
transmission lines between the U.S. and Canada and the U.S. and
Mexico. These interconnections--the majority of which are
located at the Canadian border--have improved reliability, fuel
diversity, and efficiencies in system operations, particularly
for the New England and Midwest regions. Over the last decade,
the U.S. has experienced a marked trend of growing net
electricity imports from both Canada and Mexico, although
Canada is by far the greater trading partner. Future cross-
border electricity trade will be a function of both the
development of future generation capacity and the availability
of cross-border transmission infrastructure to move electric
power. Under current law, applications for new transmission
projects will be required to obtain a Presidential Permit and
an export authorization from the Secretary of Energy. There are
currently four pending export authorization applications and
eight pending Presidential Permit applications before DOE.\3\
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\3\DOE, Office of Electricity Delivery and Energy Reliability,
``Pending Applications.''
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Cross-border natural gas pipelines
There are over 50 operating cross-border natural gas
pipelines between the U.S. and Canada and the U.S. and
Mexico.\4\ Over the last five years, natural gas pipeline
capacity between the U.S. and Mexico has grown significantly,
and it is projected to double through 2018, based on four new
projects currently under construction and two in the planning
stage.\5\
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\4\CRS Memorandum, ``Presidential Permitting of Border Crossing
Energy Facilities,'' at Table 1 (Aug. 16, 2013).
\5\U.S. Energy Information Administration, ``New U.S. Border-
Crossing Pipelines Bring Shale Gas to More Regions in Mexico,''
December 1, 2016.
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Under the current process to construct and operate a cross-
border natural gas pipeline, any person seeking to construct
and operate such facilities must obtain two separate
authorizations from FERC for the facility and an authorization
from DOE to import or export natural gas. FERC authorization
under section 3 of the NGA is necessary for siting,
construction, or operation of facilities to import or export
natural gas. In addition, pursuant to Executive Order 10485
(September 3, 1954), as amended by Executive Order 12038
(February 3, 1978), a Presidential Permit also must be obtained
for the cross-border portion of the pipeline. Any person
seeking to import or export natural gas must also obtain a
separate authorization from DOE under section 3 of the NGA.\6\
For imports and exports to countries with which the U.S. has a
Free Trade Agreement, such as Canada and Mexico, DOE is
required to grant requests ``without modification or delay.''
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\6\15 USC Sec. 717b.
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Executive Order 12038 provides that, before a Presidential
Permit is issued, there must be a finding that the action is
consistent with the public interest. The criteria used for
determining if an application is consistent with the public
interest is identical to the criteria for approving
applications for the siting, construction, and operation of
import and export facilities under section 3 of the NGA.
For ``border facilities'' subject to Presidential Permit
and NGA section 3 review, discretion is given to FERC on a
project-by-project basis to determine the exact scope of the
project review, and therefore the exact parameters of the
Presidential Permit and section 3 application. FERC looks for a
physical feature on a project, such as a valve or meter on the
interior side of the U.S. border, as an endpoint for what may
be considered to lie within the Commission's jurisdiction and
therefore subject to its review procedures. From the physical
feature, the border crossing facilities would be construed to
extend to either the U.S./Canada or U.S./Mexico border.
Cross-border oil pipelines
The U.S. currently has 20 operating cross-border oil
pipelines between the U.S. and Canada and the U.S. and Mexico.
Pipelines dominate crude movements between Canada and the U.S.,
while no crude oil pipeline capacity currently exists or is
proposed between the U.S. and Mexico. There are currently three
pending applications for Presidential Permits for either new or
existing cross-border oil pipelines between the U.S. and
Canada.\7\
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\7\Department of State, Bureau of Energy Resources ``Pending
Applications.''
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Under the current process to construct and operate an
international cross-border oil pipeline, any person seeking to
construct and operate such facilities must obtain a
Presidential Permit pursuant to Executive Order 13337 from the
Department of State. Under Executive Order 13337, the Secretary
of State is to approve cross-border oil pipelines that have
been determined to ``serve the national interest.'' Although
the Department of State will not necessarily evaluate the same
factors for each application for a Presidential Permit, its
evaluation considers such things as the environmental impacts
of the proposed project (associated closely with compliance
with NEPA), stability of trading partners from whom the U.S.
obtains crude oil, and the security of transport pathways for
crude oil supplies to the U.S., and the economic benefits to
the U.S.
Need for statutory authority for cross-border permitting
The Committee finds that cross-border permitting authority
should be explicitly granted by statute, as opposed to the
current framework created entirely by the Executive Branch. The
Committee is concerned by the inconsistent, ad hoc manner in
which Presidential Permit authority has been exercised among
the agencies to which it has been delegated by Executive Order.
This issue came into particular focus in the context of the
State Department's review of the Keystone XL pipeline proposal,
which originally applied for a Presidential Permit in 2008 and
did not receive approval until 2017.
The Committee finds that the statutorily directed process
for cross-border permitting embodied by H.R. 2883 would lead to
more objective and timely decisions, which in turn would create
jobs, strengthen our nation's energy security, and support
affordable and reliable energy for Americans.
H.R. 2883 would replace the Presidential Permit requirement
with a more transparent, efficient, and effective review
process. The legislation would require persons seeking to
construct, connect, operate, or maintain a border-crossing
facility for the import or export of oil or natural gas, or the
transmission of electricity, to obtain a Certificate of
Crossing. The term ``border-crossing facility,'' and thus what
may be considered jurisdictional for the purposes of the
Certificate of Crossing review, means the portion of the
pipeline or transmission facility that is located at an
international boundary. This description is consistent with
FERC's established procedures for review of Presidential Permit
and NGA section 3 applications. Under the legislation, the
relevant official would issue the certificate of crossing
unless it is found that the construction, connection,
operation, or maintenance of border facilities comprising the
cross-border segment is not in the public interest of the
United States. Consistent with FERC's existing procedures for
review of cross-border gas pipelines, the cross-border segment
of the border crossing facility would be identified as the
segment spanning from the international boundary to a physical
feature within close proximity, such as a valve or meter. The
legislation would have no effect on the requirement to obtain
approval or authorization under sections 3 and 7 of the NGA or
the authorities of FERC with respect to the siting of oil
pipelines upstream or downstream of a border crossing facility.
The legislation would also have no effect on any other Federal
statute that would apply to a project for which a Certificate
of Crossing is required, including any requirements of the
National Environmental Policy Act.
Committee Action
On May 3, 2017, the Subcommittee on Energy held a hearing
on discussion draft entitled ``Promoting Cross-Border Energy
Infrastructure Act.'' The Subcommittee received testimony from:
Terry Turpin, Director, Office of Energy
Projects, Federal Energy Regulatory Commission;
John Katz, Deputy Associate General Counsel,
Office of the General Counsel, Federal Energy
Regulatory Commission;
Jeffrey Leahey, Deputy Executive Director,
National Hydropower Association;
Donald Santa, President and CEO, Interstate
Natural Gas Association of America;
Andy Black, President and CEO, Association
of Oil Pipe Lines;
Jeffrey Soth, Legislative and Political
Director, International Union of Operating Engineers;
Bob Irvin, President and CEO, American
Rivers; and,
Jennifer Danis, Senior Staff Attorney,
Eastern Environmental Law Center.
On June 22, 2017, the Subcommittee on Energy met in open
markup session and forwarded H.R. 2883, without amendment, to
the full Committee by a record vote of 18 yeas and 12 nays. On
June 28, 2017, the full Committee on Energy and Commerce met in
open markup session and ordered H.R. 2883, as amended,
favorably reported to the House by a record vote of 31 yeas and
20 nays.
Committee Votes
Clause 3(b) of rule XIII requires the Committee to list the
record votes on the motion to report legislation and amendments
thereto. The following reflects the record votes taken during
the Committee consideration:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Oversight Findings and Recommendations
Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII, the Committee held a hearing and made findings that
are reflected in this report.
New Budget Authority, Entitlement Authority, and Tax Expenditures
Pursuant to clause 3(c)(2) of rule XIII, the Committee
finds that H.R. 2883 would result in no new or increased budget
authority, entitlement authority, or tax expenditures or
revenues.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII, the following is
the cost estimate provided by the Congressional Budget Office
pursuant to section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 14, 2017.
Hon. Greg Walden,
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. 2883, the
Promoting Cross-Border Energy Infrastructure Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Megan
Carroll.
Sincerely,
Mark P. Hadley
(For Keith Hall, Director).
Enclosure.
H.R. 2883--Promoting Cross-Border Energy Infrastructure Act
H.R. 2883 would make changes to permitting requirements for
oil and natural gas pipelines and electric transmission
facilities that cross international borders. In particular, the
bill would eliminate the existing requirement that sponsors of
such infrastructure obtain a Presidential permit. Instead, H.R.
2883 would require those sponsors to obtain a certificate of
crossing. Under the bill, the Federal Energy Regulatory
Commission (FERC) would issue those certificates for oil and
natural gas pipelines; the Secretary of Energy would issue them
for electric transmission facilities. The change in permitting
requirements would apply to new projects and modifications of
certain existing projects as specified by the bill.
CBO estimates that implementing H.R. 2883 would have no
significant net effect on the federal budget. Relative to
current law, we expect that any changes to administrative costs
incurred by the Department of Energy would not exceed $500,000
in any year; such spending would be subject to the availability
of appropriated funds. Further, because FERC recovers 100
percent of its costs through user fees, any change in that
agency's costs (which are controlled through annual
appropriation acts) would be offset by an equal change in fees
that the commission charges, resulting in no net change in
federal spending.
Enacting H.R. 2883 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply. CBO
estimates that enacting H.R. 2883 would not increase net direct
spending or on-budget deficits in any of the four consecutive
10-year periods beginning in 2028.
H.R. 2883 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandate Reform Act and
would impose no costs on state, local, or tribal governments.
The CBO staff contact for this estimate is Megan Carroll.
The estimate was approved by H. Samuel Papenfuss, Deputy
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.
Statement of General Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII, the general
performance goal or objective of this legislation is to
establish coordinated procedures to authorize the construction,
connection, operation, and maintenance of international border-
crossing facilities for the import and export of oil and
natural gas and the transmission of electricity.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII, no provision of
H.R. 2883 is known to be duplicative of another Federal
program, including any program that was included in a report to
Congress pursuant to section 21 of Public Law 111-139 or the
most recent Catalog of Federal Domestic Assistance.
Committee Cost Estimate
Pursuant to clause 3(d)(1) of rule XIII, 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.
Earmark, Limited Tax Benefits, and Limited Tariff Benefits
Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the
Committee finds that H.R. 2883 contains no earmarks, limited
tax benefits, or limited tariff benefits.
Disclosure of Directed Rule Makings
Pursuant to section 3(i) of H. Res. 5, the Committee finds
that H.R. 2883 contains no directed rule makings.
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
This section provides the short title of ``Promoting Cross-
Border Energy Infrastructure Act.''
Section 2. Approval for border-crossing facilities
Section 2(a)(1) provides that no person may construct,
connect, operate, or maintain a border-crossing facility for
the import or export of oil or natural gas, or the transmission
of electricity, across an international border of the United
States without obtaining a certificate of crossing.
Section 2(a)(2) instructs relevant officials or agencies,
in consultation with appropriate Federal agencies, to issue a
certificate of crossing for a border-crossing facility within
120 days after final action is taken, unless the relevant
official or agency finds that the construction, connection,
operation, or maintenance of the border-crossing facility is
not in the public interest of the United States. The relevant
official or agency with respect to border-crossing facilities
consisting of oil or natural gas pipelines is the Federal
Energy Regulatory Commission. The relevant official or agency
with respect to electric transmission facilities is the
Secretary of Energy. This section also provides additional
requirements for electric transmission facilities.
Section 2(a)(3) instructs that subsection (a) shall not
apply to border-crossing facilities that are in operation on
the date of enactment of this Act if a permit as described in
subsection (d) has been issued, or if a permit as described in
subsection (d) is pending and meets certain requirements.
Section 2(a)(4) specifies that nothing in subsection (a) or
subsection (e) shall affect the application of any other
Federal statute to a project for which a certificate of
crossing for a border-crossing facility is requested; the
requirement to obtain approval or authorization under sections
3 and 7 of the NGA or the authority of the FERC with respect to
oil pipelines under section 60502 of title 49, United States
Code.
Section 2(b) amends section 3(c) of the NGA directing FERC
to grant an application for the importation of natural gas
from, or exportation of natural gas to, Canada and Mexico not
later than 30 days after the date on which the Commission
receives the complete application.
Section 2(c) repeals section 202(e) of the Federal Power
Act, eliminating the requirement to secure an order from FERC
to transmit electric energy from the United States to a foreign
country. This section also contains conforming amendments
related to State regulations and seasonal diversity electricity
exchange.
Section 2(d) specifies that no Presidential Permit or any
other Executive Order shall be necessary for the construction,
connection, operation, or maintenance of an oil or natural gas
pipeline or electric transmission facility, or any border-
crossing facility.
Section 2(e) directs that no certificate of crossing under
subsection (a) or permit described in subsection (d) shall be
required for a modification to an oil or natural gas pipeline
or electric transmission facility that is operating for the
import or export of energy as of the date of enactment of this
Act. Additionally, a certificate of crossing or a permit shall
not be required for a modification to an oil or natural gas
pipeline or electric transmission facility for which a permit
described in subsection (d) has been issued, or for which a
certificate of crossing has previously been issued under
subsection (a).
Section 2(f) specifies that subsections (a) through (c)
shall take effect on the date that is one year after the date
of enactment of this Act. Each relevant official or agency
shall publish in the Federal Register a notice of a proposed
rulemaking to carry out the requirements of subsection (a)
within 180 days after the date of enactment of this Act. Not
later than one year after the date of enactment, the relevant
officials or agencies shall publish a final rule in the Federal
Register.
Section 2(g) provides definitions for terms used throughout
this section.
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 (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
NATURAL GAS ACT
* * * * * * *
exportation or importation of natural gas; lng terminals
Sec. 3. (a) After six months from the date on which this act
takes effect no person shall export any natural gas from the
United States to a foreign country or import any natural gas
from a foreign country without first having secured an order of
the Commission authorizing it to do so. The Commission shall
issue such order upon application, unless, after opportunity
for hearing, it finds that the proposed exportation or
importation will not be consistent with the public interest.
The Commission may by its order grant such application, in
whole or in part, with such modification and upon such terms
and conditions as the Commission may find necessary or
appropriate, and may from time to time, after opportunity for
hearing, and for good cause shown, make such supplemental order
in the premises as it may find necessary or appropriate.
(b) With respect to natural gas which is imported into the
United States from a nation with which there is in effect a
free trade agreement requiring national treatment for trade in
natural gas, and with respect to liquefied natural gas--
(1) the importation of such natural gas shall be
treated as a ``first sale'' within the meaning of
section 2(21) of the Natural Gas Policy Act of 1978;
and
(2) the Commission shall not, on the basis of
national origin, treat any such imported natural gas on
an unjust, unreasonable, unduly discriminatory, or
preferential basis.
(c) For purposes of subsection (a), the importation of the
natural gas referred to in subsection (b), or the exportation
of natural gas to a nation with which there is in effect a free
trade agreement requiring national treatment for trade in
natural gas, shall be deemed to be consistent with the public
interest, and applications for such importation or exportation
shall be granted without modification or delay. In the case of
an application for the importation of natural gas from, or the
exportation of natural gas to, Canada or Mexico, the Commission
shall grant the application not later than 30 days after the
date on which the Commission receives the complete application.
(d) Except as specifically provided in this Act, nothing in
this Act affects the rights of States under--
(1) the Coastal Zone Management Act of 1972 (16
U.S.C. 1451 et seq.);
(2) the Clean Air Act (42 U.S.C. 7401 et seq.); or
(3) the Federal Water Pollution Control Act (33
U.S.C. 1251 et seq.).
(e)(1) The Commission shall have the exclusive authority to
approve or deny an application for the siting, construction,
expansion, or operation of an LNG terminal. Except as
specifically provided in this Act, nothing in this Act is
intended to affect otherwise applicable law related to any
Federal agency's authorities or responsibilities related to LNG
terminals.
(2) Upon the filing of any application to site, construct,
expand, or operate an LNG terminal, the Commission shall--
(A) set the matter for hearing;
(B) give reasonable notice of the hearing to all
interested persons, including the State commission of
the State in which the LNG terminal is located and, if
not the same, the Governor-appointed State agency
described in section 3A;
(C) decide the matter in accordance with this
subsection; and
(D) issue or deny the appropriate order accordingly.
(3)(A) Except as provided in subparagraph (B), the Commission
may approve an application described in paragraph (2), in whole
or part, with such modifications and upon such terms and
conditions as the Commission find necessary or appropriate.
(B) Before January 1, 2015, the Commission shall not--
(i) deny an application solely on the basis that the
applicant proposes to use the LNG terminal exclusively
or partially for gas that the applicant or an affiliate
of the applicant will supply to the facility; or
(ii) condition an order on--
(I) a requirement that the LNG terminal offer
service to customers other than the applicant,
or any affiliate of the applicant, securing the
order;
(II) any regulation of the rates, charges,
terms, or conditions of service of the LNG
terminal; or
(III) a requirement to file with the
Commission schedules or contracts related to
the rates, charges, terms, or conditions of
service of the LNG terminal.
(C) Subparagraph (B) shall cease to have effect on January 1,
2030.
(4) An order issued for an LNG terminal that also offers
service to customers on an open access basis shall not result
in subsidization of expansion capacity by existing customers,
degradation of service to existing customers, or undue
discrimination against existing customers as to their terms or
conditions of service at the facility, as all of those terms
are defined by the Commission.
(f)(1) In this subsection, the term ``military
installation''--
(A) means a base, camp, post, range, station, yard,
center, or homeport facility for any ship or other
activity under the jurisdiction of the Department of
Defense, including any leased facility, that is located
within a State, the District of Columbia, or any
territory of the United States; and
(B) does not include any facility used primarily for
civil works, rivers and harbors projects, or flood
control projects, as determined by the Secretary of
Defense.
(2) The Commission shall enter into a memorandum of
understanding with the Secretary of Defense for the purpose of
ensuring that the Commission coordinate and consult with the
Secretary of Defense on the siting, construction, expansion, or
operation of liquefied natural gas facilities that may affect
an active military installation.
(3) The Commission shall obtain the concurrence of the
Secretary of Defense before authorizing the siting,
construction, expansion, or operation of liquefied natural gas
facilities affecting the training or activities of an active
military installation.
* * * * * * *
----------
FEDERAL POWER ACT
* * * * * * *
PART II--REGULATION OF ELECTRIC UTILITY COMPANIES ENGAGED IN INTERSTATE
COMMERCE
* * * * * * *
interconnection and coordination of facilities; emergencies;
transmission to foreign countries
Sec. 202. (a) For the purpose of assuring an abundant supply
of electric energy throughout the United States with the
greatest possible economy and with regard to the proper
utilization and conservation of natural resources, the
Commission is empowered and directed to divide the country into
regional districts for the voluntary interconnection and
coordination of facilities for the generation, transmission,
and sale of electric energy, and it may at any time thereafter,
upon its own motion or upon application, make such
modifications thereof as in its judgment will promote the
public interest. Each such district shall embrace an area
which, in the judgment of the Commission, can economically be
served by such interconnected and coordinated electric
facilities. It shall be the duty of the Commission to promote
and encourage such interconnection and coordination within each
such district and between such districts. Before establishing
any such district and fixing or modifying the boundaries
thereof the Commission shall give notice to the State
commission of each State situated wholly or in part within such
district, and shall afford each such State commission
reasonable opportunity to present its views and
recommendations, and shall receive and consider such views and
recommendations.
(b) Whenever the Commission, upon application of any State
commission or of any person engaged in the transmission or sale
of electric energy, and after notice to each State commission
and public utility affected and after opportunity for hearing,
finds such action necessary or appropriate in the public
interest it may by order direct a public utility (if the
Commission finds that no undue burden will be placed upon such
public utility thereby) to establish physical connection of its
transmission facilities with the facilities of one or more
other persons engaged in the transmission or sale of electric
energy, to sell energy to or exchange energy with such persons:
Provided, That the Commission shall have no authority to compel
the enlargement of generating facilities for such purposes, nor
to compel such public utility to sell or exchange energy when
to do so would impair its ability to render adequate service to
its customers. The Commission may prescribe the terms and
conditions of the arrangement to be made between the persons
affected by any such order, including the apportionment of cost
between them and the compensation or reimbursement reasonably
due to any of them.
(c)(1) During the continuance of any war in which the United
States is engaged, or whenever the Commission determines that
an emergency exists by reason of a sudden increase in the
demand for electric energy, or a shortage of electric energy or
of facilities for the generation or transmission of electric
energy, or of fuel or water for generating facilities, or other
causes, the Commission shall have authority, either upon its
own motion or upon complaint, with or without notice, hearing,
or report, to require by order such temporary connections of
facilities and such generation, delivery, interchange, or
transmission of electric energy as in its judgment will best
meet the emergency and serve the public interest. If the
parties affected by such order fail to agree upon the terms of
any arrangement between them in carrying out such order, the
Commission, after hearing held either before or after such
order takes effect, may prescribe by supplemental order such
terms as it finds to be just and reasonable, including the
compensation or reimbursement which should be paid to or by any
such party.
(2) With respect to an order issued under this subsection
that may result in a conflict with a requirement of any
Federal, State, or local environmental law or regulation, the
Commission shall ensure that such order requires generation,
delivery, interchange, or transmission of electric energy only
during hours necessary to meet the emergency and serve the
public interest, and, to the maximum extent practicable, is
consistent with any applicable Federal, State, or local
environmental law or regulation and minimizes any adverse
environmental impacts.
(3) To the extent any omission or action taken by a party,
that is necessary to comply with an order issued under this
subsection, including any omission or action taken to
voluntarily comply with such order, results in noncompliance
with, or causes such party to not comply with, any Federal,
State, or local environmental law or regulation, such omission
or action shall not be considered a violation of such
environmental law or regulation, or subject such party to any
requirement, civil or criminal liability, or a citizen suit
under such environmental law or regulation.
(4)(A) An order issued under this subsection that may result
in a conflict with a requirement of any Federal, State, or
local environmental law or regulation shall expire not later
than 90 days after it is issued. The Commission may renew or
reissue such order pursuant to paragraphs (1) and (2) for
subsequent periods, not to exceed 90 days for each period, as
the Commission determines necessary to meet the emergency and
serve the public interest.
(B) In renewing or reissuing an order under subparagraph (A),
the Commission shall consult with the primary Federal agency
with expertise in the environmental interest protected by such
law or regulation, and shall include in any such renewed or
reissued order such conditions as such Federal agency
determines necessary to minimize any adverse environmental
impacts to the extent practicable. The conditions, if any,
submitted by such Federal agency shall be made available to the
public. The Commission may exclude such a condition from the
renewed or reissued order if it determines that such condition
would prevent the order from adequately addressing the
emergency necessitating such order and provides in the order,
or otherwise makes publicly available, an explanation of such
determination.
(5) If an order issued under this subsection is subsequently
stayed, modified, or set aside by a court pursuant to section
313 or any other provision of law, any omission or action
previously taken by a party that was necessary to comply with
the order while the order was in effect, including any omission
or action taken to voluntarily comply with the order, shall
remain subject to paragraph (3).
(d) During the continuance of any emergency requiring
immediate action, any person or municipality engaged in the
transmission or sale of electric energy and not otherwise
subject to the jurisdiction of the Commission may make such
temporary connections with any public utility subject to the
jurisdiction of the Commission or may construct such temporary
facilities for the transmission of electric energy in
interstate commerce as may be necessary or appropriate to meet
such emergency, and shall not become subject to the
jurisdiction of the Commission by reason of such temporary
connection or temporary construction: Provided, That such
temporary connection shall be discontinued or such temporary
construction removed or otherwise disposed of upon the
termination of such emergency: Provided further, That upon
approval of the Commission permanent connections for emergency
use only may be made hereunder.
[(e) After six months from the date on which this Part takes
effect, no person shall transmit any electric energy from the
United States to a foreign country without first having secured
an order of the Commission authorizing it to do so. The
Commission shall issue such order upon application unless,
after opportunity for hearing, it finds that the proposed
transmission would impair the sufficiency of electric supply
within the United States or would impede or tend to impede the
coordination in the public interest of facilities subject to
the jurisdiction of the Commission. The Commission may by its
order grant such application in whole or in part, with such
modifications and upon such terms and conditions as the
Commission may find necessary or appropriate, and may from time
to time, after opportunity for hearing and for good cause
shown, make such supplemental orders in the premises as it may
find necessary or appropriate.]
(f) The ownership or operation of facilities for the
transmission or sale at wholesale of electric energy which is
(a) generated within a State and transmitted from that State
across an international boundary and not thereafter transmitted
into any other State, or (b) generated in a foreign country and
transmitted across an international boundary into a State and
not thereafter transmitted into any other State, shall not make
a person a public utility subject to regulation as such under
other provisions of this part. The State within which any such
facilities are located may regulate any such transaction
[insofar as such State regulation does not conflict with the
exercise of the Commission's powers under or relating to
subsection 202(e)].
(g) In order to insure continuity of service to customers of
public utilities, the Commission shall require by rule, each
public utility to--
(1) report promptly to the Commission and any
appropriate State regulatory authorities any
anticipated shortage of electric energy or capacity
which would affect such utility's capability of serving
its wholesale customers,
(2) submit to the Commission, and to any appropriate
State regulatory authority, and periodically revise,
contingency plans respecting--
(A) shortages of electric energy or capacity,
and
(B) circumstances which may result in such
shortages, and
(3) accommodate any such shortages or circumstances
in a manner which shall--
(A) give due consideration to the public
health, safety, and welfare, and
(B) provide that all persons served directly
or indirectly by such public utility will be
treated, without undue prejudice or
disadvantage.
* * * * * * *
----------
PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978
* * * * * * *
TITLE VI--MISCELLANEOUS PROVISIONS
* * * * * * *
SEC. 602. SEASONAL DIVERSITY ELECTRICITY EXCHANGE.
(a) Authority.--The Secretary may acquire rights-of-way by
purchase, including eminent domain, through North Dakota, South
Dakota, and Nebraska for transmission facilities for the
seasonal diversity exchange of electric power to and from
Canada if he determines--
(1) after opportunity for public hearing--
(A) that the exchange is in the public
interest and would further the purposes
referred to in section 101 (1) and (2) of this
Act and that the acquisition of such rights-of-
way and the construction and operation of such
transmission facilities for such purposes is
otherwise in the public interest,
(B) that a permit has been issued in
accordance with subsection (b) for such
construction, operation, maintenance, and
connection of the facilities at the border for
the transmission of electric energy between the
United States and Canada as is necessary for
such exchange of electric power, and
(C) that each affected State has approved the
portion of the transmission route located in
each State in accordance with applicable State
law, or if there is no such applicable State
law in such State, the Governor has approved
such portion; and
(2) after consultation with the Secretary of the
Interior and the heads of other affected Federal
agencies, that the Secretary of the Interior and the
heads of such, other agencies concur in writing in the
location of such portion of the transmission facilities
as crosses Federal land under the jurisdiction of such
Secretary or such other Federal agency, as the case may
be.
The Secretary shall provide to any State such cooperation and
technical assistance as the State may request and as he
determines appropriate in the selection of a transmission
route. If the transmission route approved by any State does not
appear to be feasible and in the public interest, the Secretary
shall encourage such State to review such route and to develop
a route that is feasible and in the public interest. Any
exercise by the Secretary of the power of eminent domain under
this section shall be in accordance with other applicable
provisions of Federal law. The Secretary shall provide public
notice of his intention to acquire any right-of-way before
exercising such power of eminent domain with respect to such
right-of-way.
(b) Permit.--Notwithstanding any transfer of functions under
the first sentence of section 301(b) of the Department of
Energy Organization Act, no permit referred to in subsection
(a)(1)(B) may be issued unless [the Commission has conducted
hearings and made the findings required under section 202(e) of
the Federal Power Act and under the applicable execution order
respecting the construction, operation, maintenance, or
connection at the borders of the United States of facilities
for the transmission of electric energy between the United
States and a foreign country. Any finding of the Commission
under an applicable executive order referred to in this
subsection shall be treated for purposes of judicial review as
an order issued under section 202(e) of the Federal Power Act.]
the Secretary has conducted hearings and finds that the
proposed transmission facilities would not impair the
sufficiency of electric supply within the United States or
would not impede or tend to impede the coordination in the
public interest of facilities subject to the jurisdiction of
the Secretary.
(c) Timely Acquisition by Other Means.--The Secretary may not
acquire any rights-of-day under this section unless he
determines that the holder or holders of a permit referred to
in subsection (a)(1)(B) are unable to acquire such rights-of-
way under State condemnation authority, or after reasonable
opportunity for negotiation, without unreasonably delaying
construction, taking into consideration the impact of such
delay on completion of the facilities in a timely fashion.
(d) Payments by Permittees.--(1) The property interest
acquired by the Secretary under this section (whether by
eminent domain or other purchase) shall be transferred by the
Secretary to the holder of a permit referred to in subsection
(b) if such holder has made payment to the Secretary of the
entire costs of the acquisition of such property interest,
including administrative costs. The Secretary may accept, and
expend, for purposes of such acquisition, amounts from any such
person before acquiring a property interest to be transferred
to such person under this section.
(2) If no payment is made by a permit holder under paragraph
(1), within a reasonable time, the Secretary shall offer such
rights-of-way to the original owner for reacquisition at the
original price paid by the Secretary. If such original owner
refuses to reacquire such property after a reasonable period,
the Secretary shall dispose of such property in accordance with
applicable provisions of law governing disposal of property of
the United States.
(e) Federal Law Governing Federal Lands.--This section shall
not affect any Federal law governing Federal lands.
(f) Reports.--The Secretary shall report annually to the
Congress on the actions, if any, taken pursuant to this
section.
* * * * * * *
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
DISSENTING VIEWS
H.R. 2883 would substantially weaken the process for
federal approval of oil and natural gas pipelines and electric
transmission lines that cross the U.S. border with Canada or
Mexico. The new process established by the bill effectively
exempts such projects from environmental and safety review
under the National Environmental Policy Act (NEPA) by narrowing
NEPA applicability to just the sliver of the project actually
crossing the border. The process created by the bill also tips
the scales too far in favor of promoters of controversial
projects by establishing a rebuttable presumption that said
projects are to be approved. H.R. 2883 would allow a project
that is found not to be in the public interest under the
current permitting process to reapply under the new weaker
process. The bill would exempt all modifications to existing
cross-border pipelines, including major expansions of
pipelines, from any requirement for federal review or approval.
The effect of these changes will allow large and long-lived
cross-border energy projects to be approved with no
understanding or consideration of their environmental impacts.
In fact, such projects could even be exempted from any
permitting requirement at all. The public, including
communities and landowners directly affected by the projects,
would have scarce to absolutely no information and be left
without any opportunity to object or request mitigating action,
except to the extent some limited recourse can be located and
pursued through state law.
CURRENT PERMITTING PROCESS FOR TRANSBOUNDARY ENERGY PROJECTS
Proposed oil pipelines, natural gas pipelines, and electric
transmission lines that cross the U.S. boundary with Mexico or
Canada must obtain presidential permits pursuant to executive
orders.\1\ Additional statutory requirements apply to trans-
boundary, natural gas pipelines and electric transmission
lines, as well as to exports of natural gas and electricity.
---------------------------------------------------------------------------
\1\The executive branch authority to issue presidential permits for
cross-border energy project derives from the President's constitutional
authority to conduct foreign affairs. See Congressional Research
Service, Presidential Permits for Border Crossing Energy Facilities
(Mar. 15, 2017) (R43261).
---------------------------------------------------------------------------
Oil Pipelines
The President has delegated authority to permit cross-
border oil pipeline projects to the State Department, which is
required to make an affirmative finding that a project is in
the national interest.\2\ Prior to making the national interest
determination, NEPA requires the State Department to prepare,
with notice and public comment, an environmental impact
statement on a project and evaluate alternatives that would
avoid or minimize adverse environmental effects.\3\
---------------------------------------------------------------------------
\2\Exec. Order No. 11423, 33 Fed. Reg. 11741 (Aug. 16, 1968); Exec.
Order No. 13337, 69 Fed. Reg. 25299 (Apr. 30, 2004).
\3\National Environmental Policy Act of 1969, Pub. L. No. 94-83.
---------------------------------------------------------------------------
Natural Gas Pipelines and Exports
The Federal Energy Regulatory Commission (FERC) is
authorized to issue a presidential permit if it finds a natural
gas pipeline project ``to be consistent with the public
interest'' and receives favorable recommendations from the
Secretary of State and Secretary of Defense.\4\ FERC may set
conditions on a permit to protect the public interest. A cross-
border natural gas pipeline must also obtain FERC approval
under section 3 of the Natural Gas Act (NGA), as well as
favorable recommendations by the State and Defense Departments.
FERC must grant an application unless it finds that the
proposed export will not be consistent with the public
interest. Under FERC's regulations, an applicant applies for
the Natural Gas Act approval and the presidential permit
simultaneously in a single application package. One
environmental review is performed for the entire submission.
---------------------------------------------------------------------------
\4\Exec. Order No. 10485, 18 Fed. Reg. 5397 (Sept. 3, 1953).
---------------------------------------------------------------------------
An entity seeking to export natural gas as a commodity
through a pipeline or as liquefied natural gas (LNG) must
obtain approval from the Department of Energy (DOE). For export
to Canada, Mexico and other countries with a free trade
agreement, the NGA requires DOE to deem such applications
consistent with the public interest and grant them without
modification or delay.
Electric Transmission Lines and Electricity Exports
DOE is authorized to issue a presidential permit if it
finds the electric transmission line project ``to be consistent
with the public interest'' and receives favorable
recommendations from the Secretary of State and Secretary of
Defense.\5\ DOE makes the public interest determination ``by
evaluating the electric reliability impacts, the potential
environmental impacts, and any other factors that DOE may also
consider relevant to the public interest.''\6\ An environmental
analysis is required to comply with NEPA. DOE may set
conditions on a permit to protect the public interest.
Additionally, under section 202(e) of the Federal Power Act
(FPA), the transmission of electricity from the U.S. to another
country requires approval from DOE. DOE is required to approve
an application unless it finds that the proposed transmission
of electricity would ``impair the sufficiency of electric
supply within the United States or would impede or tend to
impede the coordination in the public interest of [electric]
facilities.''\7\ DOE may set conditions on the approval.
---------------------------------------------------------------------------
\5\Exec. Order No. 10485, 18 Fed. Reg. 5397 (Sept. 3, 1953).
\6\U.S. Department of Energy, Interpretative Guidance on the
Requirements of 10 C.F.R. Sec. 205.322 (Jun. 2, 2011).
\7\Federal Power Act Sec. 202(e); 16 U.S.C. 824 a(e).
---------------------------------------------------------------------------
ANALYSIS
The new approval process established in section 2(a)(2)of
the legislation requires the relevant official to issue a
``certificate of crossing'' for a border-crossing facility
within 120 days of final action under NEPA, unless the official
finds that the project ``is not in the public interest of the
United States.'' This language replaces the existing federal
approval process that requires a presidential permit for the
entire trans-boundary project, not just a segment. The relevant
officials are FERC for oil and natural gas pipelines, and the
Secretary of Energy for electric transmission lines. Moving the
responsibility for approval of oil pipelines to FERC could lead
to delays since FERC currently has no authority or experience
with the siting of oil pipelines.
Unlike the existing process, this provision establishes a
rebuttable presumption of approval, tipping the scale in favor
of the project. Instead of requiring an agency to affirmatively
find that a project is in the public interest, it shifts the
burden of proof to opponents of the project to show that it is
not in the public interest. Further a ``border-crossing
facility'' is defined as the portion of the project ``that is
located at an international boundary of the United States.''
These trans-boundary projects are multi-billion dollar
infrastructure investments that can stretch hundreds of miles
and last for decades. Before making decisions about whether to
approve such projects, federal agencies should be required to
carefully consider their potential impacts on the environment
and on communities along their routes. However, this language
limits the scope of review for federal approval to just a
sliver of a much larger project and makes it extremely
difficult--if not impossible--for an agency to prove an
application as contrary to the public interest.
Section 2(a)(3) temporarily excludes from the new
permitting process any cross-border project with permit
approval pending on the date of enactment. This exclusion ends
when the application is denied, or two years later for any
application still pending. This provision would give
controversial projects incentive to simply wait until the
exclusion expires, and would give any project denied a
presidential permit a second bite at the apple under the new,
rubber-stamp process.
Subsection (b) amends section 3 of the Natural Gas Act to
require DOE to grant authorization for the export or import of
LNG to or from Canada or Mexico, within 30 days. Currently,
companies wishing to export LNG to Canada or Mexico must obtain
federal approval before doing so. These applications are
relatively simple filings, and approvals can include
conditions, such as prohibitions against simply using Canada or
Mexico as a pass-through before shipping the gas to another
country. This provision sets a deadline for DOE to grant
authorization, but provides no mechanism for a deadline
extension. If DOE is faced with rigid deadlines it cannot meet,
the result will likely be unnecessary application denials
rather than expedited approvals.
Subsection (c) of the bill repeals FPA section 202(e),
which requires approval from DOE for the transmission of
electricity from the U.S. to another country. This could
significantly disrupt electricity and transmission markets by
undermining FERC's ability to ensure non-discriminatory open
access to the transmission grid. Owners of trans-boundary
transmission lines could demand discriminatory charges when
providing service across the U.S. border with Canada or Mexico,
or deny access altogether.
Subsection (e) says that no certificate of crossing or
presidential permit is required for modifications to existing
projects. Under this subsection, modifications include a change
in ownership, volume expansion, downstream or upstream
interconnection, or adjustments to maintain flow (such as an
increase or decrease in the number of pump or compressor
stations). Many modifications, as defined by this bill, could
have impacts just as significant as those resulting from an
entirely new project. But, as a result of this language,
controversial modifications to existing cross-border pipelines
or transmission lines would not require federal approval and
would not be subject to any environmental review.
The provisions of H.R. 2883 raise significant concerns, so
during Full Committee markup, Full Committee Ranking Member
Pallone and Energy Subcommittee Ranking Member Rush offered
amendments to address two of the major issues with the bill.
The Pallone amendment removed the limitation on NEPA review to
only the border-crossing facility, and the Rush amendment
removed the presumption of approval language. Neither of these
amendments were adopted.
For the reasons stated above, we dissent from the views
contained in the Committee's report.
Frank Pallone, Jr.,
Ranking Member.
Bobby L. Rush,
Ranking Member, Subcommittee
on Energy.
[all]