After waiting several months for the Federal Energy Regulatory Commission to gain a quorum, a handful of Louisiana pipeline projects, including three related to proposed natural gas export facilities, are expected to easily win approval.
FERC regained enough members for a voting quorum in mid-August. But the commission has a backlog of hundreds of applications. The energy-related projects alone carry an estimated cost of $50 billion.
David Dismukes, executive director of the LSU Center for Energy Studies, said the FERC quorum means the LNG pipelines will continue to move forward.
"I think right now FERC has a slate of commissioners that have marching orders to move infrastructure development. That's where the bias is," Dismukes said.
Dismukes doesn't see any problems with getting the pipelines permitted, adding that he doesn't know of many that FERC rejected. The only question is how hard the commissioners will push the staff to work through the backlog, he added.
Colette Breshears, product manager, Infrastructure Intelligence for energy analyst Genscape, said not many Louisiana pipelines were affected by FERC's quorum issue.
The majority of the planned pipes that still need FERC attention are slated for construction in late 2018 or early 2019, Breshears said. Those projects are just entering a period where they need their certificates authorized.
The pipelines that lie further out, which include many of those intended to serve planned LNG facilities, were not affected by FERC's inability to act, Breshears said. Those pipelines hadn't reached the stage in permitting where the lack of a quorum stalled things.
Anne Rolfes, founding director of the Louisiana Bucket Brigade, a local environmental group, said the lack of a quorum is about the only thing that could slow down the FERC approval process.
"By any measure, the regulatory system is broken and not working for people," Rolfes said.
The regulatory agencies grease the wheels for industry, she said. The lack of a quorum provided more protection to Louisiana and its residents than regulators.
Project applications awaiting FERC action include:
• The Gator Express Pipeline, two 42-inch lines that would connect Venture Global’s proposed Plaquemines Parish LNG project to existing intrastate and interstate lines.
• Driftwood Pipeline, a 96-mile line that would provide natural gas to the proposed facility in Calcasieu Parish.
• Kinder Morgan's expansion of service to Sabine Pass LNG in Cameron Parish. The added compressors and pipelines would allow Kinder Morgan to deliver 600 million cubic feet of natural gas each day to the facility.
Dismukes said the lack of permits hasn't been an impediment to developing the related LNG projects.
The most important thing a project needs is a contract with an LNG buyer, he said. Without that contract, the planned facility isn't at a place where it needs a federal permit for a pipeline.
Right now, locking a buyer into a long-term contract is difficult, Dismukes said.
Few if any final investment decisions have been made for the proposed LNG projects — at least $88 billion worth in Louisiana alone — in the past 18 months or so, according to market analysts S&P Global. Industry members say the soft LNG market the past couple of years has made buyers reluctant to sign 20-year contracts that construction lenders want to see in place.
Federally approved facilities under construction in Louisiana are Cheniere Energy's Sabine Pass, which already has some units operating and exporting LNG, and Sempra-Cameron LNG. Approved but not under construction are Southern Union-Lake Charles LNG and Magnolia LNG. Proposed projects with pending applications are Venture Global Calcasieu Pass, Venture Gobal LNG in Plaquemines Parish and Driftwood LNG in Calcasieu Parish. In prefiling are Fourchon LNG LLC and G2 LNG.