Regulatory Bottlenecks Threaten LNG Exports and Help Putin

A merica’s bountiful natural-gas resources have helped to spread prosperity across the country, lower the nation’s greenhouse-gas emissions, and power our European allies through Russia’s attempted energy blackmail. However, federal interstate pipeline approvals are lagging behind the nation’s growing liquefied natural gas (LNG) export capacity. Without strict deadlines and efficiency targets to break the government’s permitting bottleneck, bureaucratic delays risk eroding the economic and national-security benefits of our strong natural-gas industry.

The Federal Energy Regulatory Commission (FERC) is the primary gatekeeper for approving interstate natural-gas pipelines. In addition to shuttling gas from Pennsylvania and Texas to consumers in neighboring states, the nation’s expansive network of pipelines has facilitated a boom in liquefied natural gas exports. As this surge continues, the United States is widely predicted to overtake Australia to become the world’s largest LNG exporter this year — in part driven by Europe’s desperate search to replace Russian gas.

But America’s freedom fleet of LNG exports is sailing toward a regulatory iceberg. Despite the nation’s growing LNG export capacity, an analysis of FERC’s data reveals that major interstate-pipeline approvals have not kept pace. For example, since President Biden took office, FERC has approved 17 major projects to add 368 miles of pipeline and 4,390 million cubic feet of daily capacity. These numbers pale in comparison to the 73 projects that had been approved by this point in the Trump administration, which added 3,384 miles of pipe and 46,620 million cubic feet of capacity.

To put these numbers into perspective, almost ten times the length of pipelines and their capacity were approved in the same amount of time under the Trump administration. During that period, it took an average of 452 days from filing for FERC’s approval to receiving the green light. Under the current administration the average wait time has reached 517 days. According to the Department of Energy, 2022 was the worst year for pipeline-capacity additions since records began.

Some critics have attributed permitting delays to FERC’s decades-old review processes that leave its decisions vulnerable to legal challenges. To preempt these challenges, President Biden’s first nominee for the commission’s chair, Richard Glick, formally sought to “integrate climate considerations into [FERC’s] public interest determinations.” Though Glick ultimately abandoned this move, his attempt to institute this delay-inducing so-called diligence reflects the misguided idea that FERC’s delays are due to a lack of regulatory rigor. This simply isn’t true. After all, most of the pipeline approvals under the previous administration have not been scuttled in the courts. Rather, the stark difference in pipeline approvals across the Biden and Trump administrations points to a deeper politicization of the otherwise independent agency.

This politicization will not come as a surprise to close watchers of FERC. In April last year, the commission released an Equity Action Plan, which “complies with President Biden’s Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, Executive Order 13985.” In that same plan, however, the commission itself noted that it was not legally obligated to comply with the executive order due to its independence. This sent a clear message: The commission was under intense political pressure. Why else would the bureaucracy taken on additional work?

One step toward inhibiting bureaucratic “slow-walking” in the permitting process would be through the strict streamlining of environmental reviews. FERC desperately needs this sort of reform: A 2020 report by the Council on Environmental Quality found that the commission took an average of 2.67 years to complete environmental-impact statements between 2010 and 2018. With that in mind, legislation that mandates page limits and deadlines for all of FERC’s environmental-impact statements and assessments would be a good place to start. And at least in this respect, the so-called Bipartisan Infrastructure Law provides a helpful blueprint. It established both page limits and a two-year agency-wide target average for environmental reviews of major transportation projects. Coupled with a review and update of safety regulations, these reforms can gradually adjust the nation’s natural-gas regulatory system to be forward-looking.

To this point, however, the breadth of challenges confronting American resource development has simply flown under the radar. For example, while a whirlwind of media coverage has engulfed the Biden administration’s recent decision to approve an LNG facility in Alaska, few mention that FERC approved the project and its pipelines in 2020. Though this focus on the most high-profile actions of the Biden administration is understandable, it risks overlooking the equally important decisions of the bureaucratic machine. Until Congress addresses the politicized slow-walking at FERC, transporting natural gas at home and to our allies abroad is increasingly a pipe dream.