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FERC resignation could set back several pipeline projects

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World Pipelines,

According to news sources, on Friday 27 January, three natural gas pipeline companies sought after permission to move forward on their projects by the US Federal Energy Regulatory Commission (FERC). The companies have asked for permission to be granted before 3 February, which is when FERC Chairman, Norman Bay, will step down.

The three companies are TransCanada Corp. that is seeking a notice to proceed with construction of its Leach XPress project, Williams that is seeking a certificate to build its Transco Atlantic Sunrise project and Nexus Gas Transmission. Nexus seeks to move up to 1.5 billion ft3/d from the Marcellus and Utica shale basins to the US midwest and Ontario.

Of the three, Nexus Gas Transmission was the only one to specify that the reason for its request for a certificate to build its pipeline was because of Bay’s announcement that he would step down from his role at the end of next week.

On 26 January, Bay reportedly stated that he would leave his post after Commissioner Cheryl LaFleur was appointed as acting Chairman by President Donald Trump.

With Bay’s departure, only two of FERC's five commissioner slots will be filled. However, according to Jay Ryan, a partner at Baker Botts law firm, FERC requires a minimum of three members to issue substantive orders, regulations and policy initiatives.

Thus, the lack of quorum means that FERC cannot take action on some major gas pipeline requests that were nearing a decision.

Nexus Gas Transmission claimed that its request for commission attention now reflects its "concern that the absence of a quorum after 3 February will stifle FERC’s ability to act, delaying commencement of construction to the point that it will jeopardise the project's ability to meet demand."

While Williams would not comment, it would need FERC to rule on its Atlantic Sunrise project no later than 17 February. Lancaster Online reported that Williams’ deadline is important, as the company reportedly outlined in its request to FERC, because construction of the US$3 billion, 198 mile pipeline has to align with strict building windows set by Pennsylvania and federal agencies.

Bay’s resignation not only threatens to put the abovementioned pipelines on hold, it could also bring costly delays to other key projects, including the Dakota Access and Keystone XL pipelines, though its impact on these projects in uncertain.

According to npr: “Some projects that have been through years of regulatory review and were nearing the finish line could now be in limbo for months.”

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