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Providing coverage of Alaska and northern Canada's oil and gas industry
April 2019

Vol. 24, No.16 Week of April 21, 2019

Trump signs energy infrastructure orders

Aims to speed up and ease the government approval of construction of pipelines and other oil and gas transportation facilities

Alan Bailey

Petroleum News

As part of his agenda to promote U.S. energy development and production, on April 10 President Trump signed two presidential orders aimed at speeding up and easing the government approval of facilities such as pipelines used for energy transportation.

“Under this administration we have ended the war on energy,” Trump told members of the Union of Operating Engineers in Texas prior to signing the orders. “Nobody believed this was going to happen. And we put thousands and thousands of patriotic union members like you to work building our energy future.”

International facilities

The first order changes the procedure for dealing with an application for a new cross international border transportation facility such as a pipeline. Under the new procedure the secretary of state must advise the president within 60 days on whether to approve an application of this type, with the president making the final approval decision. The order would in effect transfer approval authority from the secretary of state to the president while also setting a time limit for the review process. And, as part of the 60-day review, the president may require the secretary of state to seek opinions about the application from specified government agencies, and from state, tribal and local governments, and from foreign governments.

According to an Associated Press report, legal experts have suggested that, because an approval would then be a presidential order rather than a final action by a government agency, the decision would not be reviewable and could circumvent the requirements of the National Environmental Policy Act. However, there are questions over whether this new approval procedure would, in fact, be legal, the AP report says.

The order applies to various forms of transportation infrastructure, including some bridges, and border crossings for motor vehicles and railways. However, the expeditious construction of cross-border oil and gas pipelines is an obvious target.

Energy development impediments

The second order seeks to deal with a number of issues that the president sees as impediments to energy development in the United States.

Part of the order deals with Section 401 of the Clean Water Act, the section that gives states the authority to ensure that federal agencies will not issue permits such as pipeline construction permits that violate state or tribal water quality standards. The presidential order says that outdated regulations under Section 401 are hindering the development of energy infrastructure. And the order requires the Environmental Protection Agency to consult with states, tribes and relevant agencies, to determine whether any regulations and guidance under the section should be clarified to be consistent with a federal administration policy of promoting private investment in U.S. energy infrastructure.

Within 60 days of the order being issued, the EPA must issue new guidance to address the administration’s Section 401 policies. And within 120 days the EPA must publish rules with appropriate revisions to regulations, with these rules to be finalized within 13 months of the issue of the presidential order.

LNG facilities

Another section of the order requires the Department of Transportation to review the safety regulations for liquefied natural gas facilities. The existing 40-year-old regulations were designed for small scale LNG facilities that bear little resemblance to modern, large-scale facilities, the presidential order says. DOT must finalize a rulemaking for revised regulations no later than 13 months after the issue of the order.

In addition, within 100 days DOT must propose a rule allowing LNG to be carried in the U.S. in rail tank cars - current regulations prohibit this form of LNG transportation, with LNG shipped by rail having to be carried in portable tanks.

The order also requires the Department of Labor to investigate whether retirement plans under the Employee Retirement Security Act of 1974 have policy trends relating to energy investment. The DOL must then review guidance for proxy voting relating to investment policies, to determine whether the guidance needs to be changed to ensure consistency with policies for long-term growth and the maximization of returns on the assets held under ESRA retirement plans, the order says.

The order also addresses issues relating to the expiration of rights of way for energy infrastructure assets such as pipelines. The order requires the Department of the Interior and the Department of Commerce to develop a master agreement for the renewal and reauthorization of rights of way under federal jurisdiction and, within a year, initiate a renewal or reauthorization process for rights of way, as appropriate.

Shipment bottlenecks

In response to current bottlenecks in the shipment of natural gas and other domestic energy resources to various states, the Department of Transportation and the Department of Energy must within 180 days submit a report to the president on the effects of these transportation problems, and on an assessment of the extent to which state, local, tribal or territorial actions have contributed to these effects, the presidential order says.

The order also requires federal agencies to review and report on the intergovernmental assistance that the federal government provides to state and local governments with respect to the transportation and development of domestic energy resources.

The order specifically addresses what the president sees as a need for economic growth in the Appalachian region. The Department of Energy, in consultation with other agencies, must report to the president on opportunities, through the federal government or otherwise, for growth in the region, including the growth of petrochemical and other industries, for diversifying the economy, and for promoting workforce development.

Reactions to the orders

According to a report in the Washington Post, Washington Gov. Jay Inslee, a Democrat, has particularly criticized the proposal to challenge states’ authority under the Clean Water Act.

“No amount of politicking will change the facts - states have full authority under the Clean Water Act to protect our waters and ensure the health and safety of our people,” Inslee said. “Washington will not allow this or any presidential administration to block us from discharging that authority lawfully and effectively.”

Various regions of the American Petroleum Institute have expressed their support for the president’s actions.

“We applaud the administration for their commitment to America’s energy infrastructure, which will help ensure that Pennsylvania’s consumers have continued access to reliable and affordable energy” said API Pennsylvania’s executive director, Stephanie Catarino Wissma, referencing the Clean Water Act section of the second order. “As pipelines are one of the most environmentally friendly ways to transport energy, this executive order will help the rest of the country enjoy the abundant, clean natural gas that has provided countless benefits, like more affordable electricity, to Pennsylvanians.”






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