FERC Adopts Rule to Preclude Natural Gas Project Construction Until Completion of Rehearing Process

The Federal Energy Regulatory Commission on June 9 adopted a rule that forbids natural gas projects from commencing construction until the agency acts on rehearing requests. The move intends to protect stakeholders, including landowners affected by pipeline projects. The rule attempts to address some of the concerns raised in a lawsuit before the U.S. Court of Appeals for the D.C. Circuit, in which several groups objected to the agency’s practice of tolling rehearing requests for months, or even years, preventing landowners from seeking judicial review.

FERC said that in recent years, these proceedings have seen increased participation by landowners, communities, non-governmental organizations, property rights advocates, and governmental entities, which have raised concerns about projects. Until now, if the commission does not act on rehearing applications within 30 days of filing, the request is deemed to have been denied. However, the commission has been issuing tolling orders to allow additional time to consider rehearing given the complex nature of issues raised in such requests. The new rule specifies that even if a project has the necessary certifications to begin construction, it must wait until the commission issues an order on the merits of a request.

Democratic Commissioner Richard Glick concurred with the decision to stop allowing developers to begin construction before the rehearing process, calling it a “step in the right direction.”

However, Glick dissented in part because the rule does not address a concern that a pipeline developer should not be able to start the process of condemning private land before the landowners can challenge the certificate in court. “Eminent domain is among the most significant actions that a government may take with regard to an individual’s private property,” Glick noted. Failure to address the exercise of eminent domain is in contrast to the supposed concern for landowners and the commission should do everything in its power to ensure that certificate holders are not permitted to go to court before landowners, according to the dissent.