Natural Gas:

Factors Affecting Approval Times for Construction of Natural Gas Pipelines

RCED-92-100: Published: Feb 26, 1992. Publicly Released: Apr 15, 1992.

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Pursuant to a congressional request, GAO reviewed the Federal Energy Regulatory Commission's (FERC): (1) process for approving applications for constructing natural gas pipelines; and (2) efforts to streamline the approval process.

GAO found that: (1) between October 1, 1987, and February 28, 1991, FERC approved 171 applications to construct new natural gas pipelines and related facilities, with a median processing time of 344 days; (2) major factors lengthening application processing time include unresolved policy issues, multiple-applicant pipeline projects, time-consuming environmental reviews, incomplete applications, and interventions or protests against the proposed projects; (3) FERC takes an average of 166 days to approve applications that do not include any of those significant factors; (4) to expedite pipeline construction approval, FERC places time limits for filing potentially competitive applications, uses a two-phase decision approach limiting consideration of competitive issues, requires less market and supply data if applicants accept more risk for cost recovery, and conducts early conferences to resolve technical issues; and (5) FERC and Congress are considering new regulations and legislation that would limit the level of review for some applicants and streamline the approval process.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: FERC: (1) prepared a manual on improving writing skills; (2) attached a memorandum to its order explaining policy changes; (3) developed detailed manuals and a memorandum explaining policy changes; and (4) provided staff with classroom-style training on the policy changes.

    Recommendation: The Chairman, FERC, should develop better methods of communicating FERC policy decisions, including: (1) clear, written explanations of the Commission's policy changes for FERC staff and the public; and (2) regular and systematic classroom training for FERC staff.

    Agency Affected: Federal Energy Regulatory Commission

  2. Status: Closed - Implemented

    Comments: FERC tried to develop MOUs for policy coordination with the Department of Transportation, the Forest Service, the Advisory Council on Historic Preservation, the Fish and Wildlife Service, the Bureau of Land Management, the Army Corps of Engineers, and the Council on Environmental Quality (CEQ). FERC signed a MOU with Transportation in December 1992. FERC later decided not to pursue an agreement with CEQ after determining there was no overlap in jurisdiction. FERC has not finalized MOUs with the other agencies. According to FERC, resource constraints limit both FERC and the other agencies' ability to complete the MOUs. Neither FERC nor the other agencies believe completing the MOUs is a high priority at this time. As a result, FERC has shelved its draft MOUs with these agencies indefinitely. However, FERC also notes that it has good working relationships with the other agencies and can effectively coordinate environmental issues.

    Recommendation: The Chairman, FERC, should enter into interagency agreements with federal agencies that: (1) resolve potential generic issues; (2) spell out the duties and responsibilities of each party with respect to environmental reviews for natural gas pipelines; and (3) establish time frames for completing those duties and responsibilities.

    Agency Affected: Federal Energy Regulatory Commission

  3. Status: Closed - Implemented

    Comments: FERC made several changes to its management information system in accordance with the GAO recommendations and informal suggestions.

    Recommendation: The Chairman, FERC, should amend the Key Indicator Case Tracking System to: (1) retain original and subsequent target milestone and completion dates; and (2) capture the timing of industry responses to FERC data requests and the performance of federal agencies in meeting dates established for completing pipeline environmental reviews.

    Agency Affected: Federal Energy Regulatory Commission


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