ENERGY COORDINATION

The Federal Energy Regulatory Commission has begun preliminary review of two proposed liquefied natural gas facilities in Washington County. There are also more than a dozen other proposals for LNG terminals on the East Coast. Rather than considering each proposal individually, it would make more sense to consider a regional approach to broadly decide where best to locate LNG terminals.

Although such an approach is too late for projects that have already begun the FERC review process, 13 New England congressmen and senators have asked for help from the Department of Energy in coordinating a regional approach to LNG siting. Reps. Tom Allen and Mike Michaud have both signed on to this request, which makes sense for future energy projects.

There are currently more than a dozen proposals for LNG terminals between New Jersey and Nova Scotia in some phase of development. Less than a handful of these projects will ultimately be built. Still, FERC, and other federal and state agencies, currently must evaluate each proposal separately, causing much duplication and wasted effort.

LNG developers argue that they currently carry most of the financial burden for siting terminals because they pay for the initial studies to determine what locations are feasible and then cover the cost for much of the FERC review. However, even before a permit application is filed with FERC or state and local agencies, communities and state departments expend resources analyzing and responding to proposals for facilities that will never be built. This isn’t a wise use of their limited funds – let alone the emotional toll that the controversial issue of LNG takes on communities.

Rather than having hundreds of local communities, as well as several states and provinces, react to individual plans – whether it be for an LNG terminal, a wind farm or conventional power plant – many of which will never come to fruition, it makes sense to focus more attention on areas and projects with higher chances of success.

The Department of Energy could help do this by working with governors to identify areas where it makes the most sense to build energy facilities. If private developers pick from among these areas, they could be assured that their project will move along more quickly because the preliminary assessments, in terms of community support, environmental impacts and safety, had already been done. If they chose to look outside these areas, they would have to do much of this work on their own.

The Oregon Siting Council, which is part of the state’s Department of Energy, provides a model to build on. The council offers a “one-stop” process in which it determines compliance with its standards as well as those of other state and local permitting agencies. If a project meets the standards, it must be issued a permit. State agencies must issue necessary permits and licenses, subject only to the conditions adopted by the council.

This streamlines the process for applicants as well as the public wishing to comment on proposed projects.

State and federal regulators will be dealing with LNG and other energy-related proposals for a long time to come. Making the process as coordinated and straightforward as possible is in everyone’s interest.