FERC’s premise of pipeline necessity

The report posits that FERC falls short of its mandatory obligation to evaluate the need for interstate gas pipelines. FERC assesses the necessity of pipelines upon contracts for gas –– this evaluation is flawed. The mere existence of business contracts for gas does not indicate necessity. Rather, the research shows that the entire oil and gas industry, as well as pipeline developers, have failed to adapt to changes in the energy market. Gas oversupply coupled with a drop in demand because of energy efficiency and growing competition from renewables is the driving issue, making FERC’s premise of pipeline necessity not justified.

FERC’s over-reliance on precedent contracts

FERC exacerbates over-reliance on pipeline necessity by including reliance on precedent contracts, yet it fails to analyse export precedent contracts. The research shows that assertions about current demand and long-term demand gas exports require scrutiny. FERC’s over-reliance on gas pipeline projects can place utility ratepayers in long-term dependence on gas, even as the demand for gas is dipping along with cheaper and cleaner energy alternatives.

FERC’s Failure to curb overbuilding of pipeline capacity

FERC’s approval of a pipeline project means private developers obtain eminent domain power to take land or easement rights from anyone whose property is on a proposed pipeline’s path, even when FERC struggles to recognise if such projects are needed. FERC’s failure to analyse energy market forces and curb substantial overbuilding of pipeline infrastructure poses adverse impacts on the economy. For instance, overdependence on gas infrastructure creates a significant concern for captive customers of domestically available gas or gas-fed electricity.

Adverse economic impacts

FERC’s approval of unnecessary pipeline projects imposes unjustified costs on captive utility customers by locking them in long-term dependence on expensive contracts while the rate of demand for gas is diminishing. Utility ratemaking is an increasingly significant ESG concern, a matter of great attention to investors.

Conclusion

The report demonstrates the necessity of FERC revising its Certificate Policy Statement to include energy market trends in their evaluation of proposed pipeline infrastructure. Overdependence on gas infrastructure puts utility ratepayers in a position of long-term dependence on expensive contracts while the rate of demand for gas is diminishing. The report calls on FERC to recognise the urgency of embracing clean energy alternatives and assessing pipeline necessity more critically. As a result of FERC’s inability to make prompt, well-informed decisions, it is costing Americans needlessly while failing to fulfil its duty. The US should focus on building a sustainable, clean energy future by re-directing the resources spent on permit authorisation of unnecessary pipeline projects.