Natural Gas

Factors Affecting Approval Times for Construction of Natural Gas Pipelines Gao ID: RCED-92-100 February 26, 1992

During the period of GAO's review, the median processing time for the Federal Energy Regulation Commission (FERC) to approve applications to build natural gas pipelines was about 1 year, but some approvals took much longer. FERC has tried to shorten the time it takes pipeline companies to receive approval to start construction, and Congress is considering several bills aimed at speeding or eliminating the need for FERC approval. Nevertheless, FERC could further improve its timeliness and performance in processing applications by better informing and training its staff and others on policy changes, negotiating generic agreements with other federal agencies on their environmental reviews of pipeline applications, and strengthening its management information system.

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

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