June 19, 2018
FERC Chairman Kevin McIntyre is trying to beef up staffing at the Commission to address a backlog of LNG export project applications and reaching out to the Department of Energy to see if DOE labs have engineering expertise that might help FERC, he said June 19 at the Natural Gas Roundtable in Washington D.C.
“We’re looking at reallocating existing resources within the FERC,” which could involve moving staff from one office to another to help the Office of Energy Projects (OEP) in reviewing LNG project applications, McIntyre said. A challenge has been that the engineering skills needed for project reviews are not as common as they used to be, and DOE lab personnel may be able to help in that regard.
“They’ve got some expertise within one of their national labs,” McIntyre said, adding that he hopes FERC and DOE are close to reaching an agreement on FERC using DOE lab personnel “on a loaner basis,” to address LNG export projects.
The LNG industry has been concerned with the time taken on a number of LNG project applications pending at FERC. “It is quite understandable that the sponsors are eager to gain approvals,” and FERC understands the importance of project reviews in the context of the global LNG industry, McIntyre said.
However, compared with nine years ago when there were about four LNG terminal applications pending at FERC, there are now 14 pending before the Commission, and the workload on the OEP staff is significant, he told the Roundtable audience.
Besides the processing of applications, which includes a mammoth application on an Alaskan LNG and related pipeline project, there is additional work on inspections of existing facilities and construction work. Just in the past month or so, FERC has begun to use outside contractors for some of that work. “We’re very careful in what we turn over to those parties” to ensure it involves nonproprietary aspects, such as construction inspections that involve known standards and can be applied to any project.
“We are doing our level best to work through this workload,” he said, joking that he could have brought a sign that reads: FERC: Now Hiring.
At a U.S. House of Representatives hearing in May, McIntyre told House lawmakers who inquired about LNG project reviews that the Commission is aiming to increase its manpower in OEP.
The list of U.S. LNG export projects currently operating is limited to Cheniere Energy’s Sabine Pass facility along the Texas and Louisiana border in Cameron Parish, Louisiana, and Dominion Energy’s Cove Point project in eastern Maryland. Projects under construction include the Cameron LNG project, Cheniere’s Corpus Christi project, Kinder Morgan’s Elba Island facility and the Freeport LNG facility. All six would amount to an LNG export capacity of about 10 Bcf/d at the end of 2019.
A number of projects are being reviewed at FERC or are in the pre-filing process and are competing to reach deals with global buyers to nail down final investment decisions. Among those are Golden Pass LNG, Tellurian Inc.’s Driftwood LNG, NextDecade’s Rio Grande LNG project, Eagle LNG, Commonwealth LNG, Delfin LNG, LNG Limited’s Magnolia LNG, Plaquemines LNG, Texas LNG the Jordan Cove project in Oregon and the Alaska LNG project.
In a broader context, the LNG export project applications reflect “an American success story,” that the increased production of natural gas has benefited the U.S. economy, McIntyre said.
By Tom Tiernan TTiernan@fosterreport.com