Presidential candidate Joseph Biden’s official climate change plan proclaims “that every federal infrastructure investment should reduce climate pollution” and would require “any federal permitting decision to consider the effects of greenhouse gas emissions and climate change.” That is an indication Biden would make it difficult for developers to obtain federal permits to build fossil fuel infrastructure such as pipelines and liquefied natural gas export facilities. To slow the permitting process, Biden could require onerous and lengthy reviews to evaluate whether a project’s economic impact is outweighed by its potential emissions impact, i.e., he could make the process so burdensome and expensive for pipeline developers that they cancel the project.
Because of lawsuits from environmentalists, there are pipeline shortages in parts of the country such as in the Northeast where trucks and rail are moving natural gas in a chilled, liquefied form instead of the cheaper, more efficient, and less polluting shipment by pipeline.
The Supreme Court is currently weighing whether to grant or deny review of an appeals court’s decision blocking developers of the PennEast Pipeline from seizing state-owned land. The PennEast Pipeline is a proposed project to move natural gas from the Marcellus shale region in Pennsylvania to New Jersey. Pipeline companies routinely use eminent domain authority to acquire land after they get approval from the Federal Energy Regulatory Commission. The Supreme Court’s decision could give states effective veto power over natural gas pipeline projects should the Supreme Court rule in favor of the appeals court.
Had the PennEast Pipeline been in service, customers in New Jersey and eastern Pennsylvania would have saved more than $1.32 billion over the 2013-14 and 2017-18 winters. The New Jersey phase of the pipeline is now postponed until 2023.
Due mainly to the coronavirus pandemic, other than a small handful of pipelines already well underway this year, most other projects have been postponed to 2021 or beyond as the industry cuts capital spending to preserve cash flow. Energy Information Administration data shows only about 25 percent of pipeline capacity miles planned to start in 2020 have been completed, consisting primarily of the 600,000 barrel per day EPIC oil pipeline from the Permian Basin to Corpus Christi, Texas, that was finished in February, as well as a few smaller projects in the Rockies.
Because of the demand for affordable and abundant natural gas, interstate natural gas pipeline developers have proposed $30 billion in new investment through 2025, according to the Rocky Mountain Institute. If Biden were elected, he could put a damper on these projects, resulting in higher heating and electricity bills for Americans.
Keystone XL Oil Pipeline
Biden has already committed to rescinding a permit granted by President Trump for the Keystone XL oil pipeline to cross the border from Canada into the United States. Keystone XL is caught up in a court battle due to a May 15 ruling from a federal judge in Montana, which canceled a national permit from the U.S. Army Corps of Engineers that is needed to build across streams, wetlands, and other water bodies, using a technology that has been successfully used for decades. Paperwork for the Keystone XL pipeline was originally filed in 2008. Approval was stalled during most of the Obama Administration and then rejected by President Obama in 2015, when he decided the pipeline was “not in the national interest.” President Trump overturned that decision in 2017, granting the permit.
Permits for Interstate Infrastructure
Keystone XL is unique in that it required a presidential permit for crossing international borders, giving the executive branch direct authority over it. Interstate natural gas pipelines and LNG terminals, by contrast, are reviewed by the Federal Energy Regulatory Commission (FERC)—an independent body whose members are appointed by the president and subject to Senate confirmation. Currently, the commission’s approach is to examine the environmental effects of the construction and operation of a pipeline itself, not its impact on climate change.
However, a Biden White House could influence the FERC’s decision-making process by issuing guidance requiring agencies to account for greenhouse gas emissions when completing environmental reviews for infrastructure projects under the National Environmental Policy Act (NEPA). History is replete with examples of litigation tied to environmental reviews, and adding additional reviews is likely to attract even more litigation. It is one of the reasons President Obama admitted that the “shovel-ready jobs” he promised from his stimulus package were ultimately not shovel-ready.
The energy industry is already faced with lengthy permitting and development processes. To make the process more efficient, the Trump White House recently finalized an update of regulations governing NEPA to speed environmental reviews by not requiring agencies to consider the effect of a project on climate change. Recently, New York denied a Clean Water Act certificate for a pipeline project because it did not meet the state’s “rigorous water quality standards” and because the project was incompatible with New York’s new climate law, the Climate Leadership and Community Protection Act. Under the law, the state must cut greenhouse gas emissions by 40 percent below 1990 levels by 2030 and 85 percent by 2050.
Americans need affordable and abundant natural gas to heat their homes and to generate electricity, as well as frequently to back up intermittent solar and wind plants that cannot generate electricity when the sun isn’t shining and the wind isn’t blowing. Biden’s stance on climate change could threaten infrastructure projects that are needed to get natural gas to homes, factories, and generating plants efficiently and economically. The result of a Biden presidency would be higher energy prices for Americans.