Pipeline Permitting: Interstate and Intrastate Natural Gas Permitting Processes Include Multiple Steps, and Time Frames Vary
Released: 2013-02-15T00:00:00


Highlights: section_title: Why GAO Did This Study
paragraphs: Recent growth in domestic natural gas production, particularly due to increased production from shale, is resulting in an increase in the pipelines needed to transport that gas. Constructing natural gas pipelines requires clearing and maintaining rights-of-way, which may disturb habitat and historical and cultural resources. These resources are protected under a variety of federal, state, and local regulations implemented by multiple agencies. The laws, regulations and stakeholders involved in the permitting process depend on where the pipeline is constructed. FERC is the lead federal agency in approving interstate pipelines, coordinating with federal, state, and local agencies, but FERC is not involved in the approval of intrastate pipelines.

In response to the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, GAO determined (1) the processes necessary to acquire permits to construct interstate and intrastate natural gas pipelines, (2) information available on the time frames associated with the natural gas pipeline permitting process, and (3) stakeholder-identified management practices that may improve the permitting process. GAO reviewed relevant laws and regulations and interviewed federal officials, state officials from a nonprobability sample of 11 states, and representatives from natural gas industry associations and public interest groups.

GAO makes no recommendations in this report. The Departments of Agriculture and Defense generally agreed with the findings, and the other agencies had no comments

section_title: What GAO Found
paragraphs: Both the interstate and intrastate natural gas pipeline permitting processes are complex and can involve multiple federal, state, and local agencies, as well as public interest groups and citizens, and include multiple steps. The interstate process involves a voluntary pre-filing phase, an application phase, and a post-authorization phase with multiple steps that stakeholders reported to be consistent among projects because the process is led by the Federal Energy Regulatory Commission (FERC). FERC coordinates with federal, state, and local agencies that have statutory and regulatory authority over various environmental laws and regulations. For example, if a proposed pipeline may affect endangered species, FERC coordinates with the U.S. Fish and Wildlife Service, which reviews the impacts on such species. The intrastate process can also involve multiple stakeholders and steps, but, unlike in the interstate process, GAO found that the stakeholders and steps vary by state. For example, of the 11 states GAO reviewed, 5 have agencies charged with approving the route of natural gas pipelines and require advance approval of the location and route, and the remaining 6 do not. Pipeline companies must also comply with various federal and state environmental laws and regulations; however, in most of the 11 states, no one agency is charged with coordinating the implementation of these laws and regulations as FERC is for the interstate process.

Time frames associated with the interstate and intrastate permitting processes vary because of multiple factors, according to stakeholders. For the interstate process, FERC does not track time frames, citing the limited usefulness of such data. GAO analyzed public records and found that, for those projects that were approved from January 2010 to October 2012, the average time from pre-filing to certification was 558 days; the average time for those projects that began at the application phase was 225 days. For the intrastate process, because processes vary by state, the time frames of those processes may also vary. GAO found little comprehensive data on the intrastate process. According to GAO's discussions with stakeholders, several factors can affect the time frame for the permitting process of a given project, including different types of federal permits or authorizations, delays in the reviews needed by governmental stakeholders, and incomplete applications. For example, state and local permitting and review processes can affect federal decision-making time frames because some federal agencies will not issue their permits until state and local governments have completed their own permitting processes, according to some stakeholders.

Officials from federal and state agencies and representatives from industry and public interest groups told GAO that several management practices could help overcome challenges they associated with an efficient permitting process and obtaining public input: (1) ensure a lead agency is coordinating the efforts of federal, state, and local permitting processes for intrastate pipelines, (2) ensure effective collaboration of the numerous stakeholders involved in the permitting process, (3) provide planning tools to assist companies in routing pipelines and avoiding sensitive environmental resources, (4) offer industry the option to fund contractors or agency staff to expedite the permitting process, and (5) increase the opportunities for public comments.

section_title: Letter
paragraphs: In recent years, U.S. natural gas production from unconventional sources,  including shale, has increased because of technological advances.  According to the Department of Energy’s Energy Information  Administration, gas production from unconventional sources is projected  to rise by 35 percent through 2030. This increase in production has  required, and will continue to require, steady additions to the pipeline  system for moving natural gas from the production fields to gas  consumers. According to a 2011 Department of Energy report, the recent  substantial growth in domestic natural gas production from shale has  already brought lower natural gas prices, more domestic jobs, and the  prospect of enhanced national energy security.

However, natural gas production and pipelines also raise concerns about  potential environmental and public health effects. Pipelines are typically  buried underground. Their construction requires clearing and maintaining  rights-of-way, which may result in the loss of habitat for plants and  wildlife, disturb nesting birds, and endanger cultural and historic  resources. The disturbance may occur on federal, state, tribal, or private  lands. Soil disturbance during construction can also increase the risks of  erosion and sedimentation if the pipelines are not carefully designed and  installed. Further, accidental or routine releases of natural gas may result  in contamination of surface water and ground water, including  contamination of drinking water supplies. In addition to the pipelines  themselves, compressor stations pressurize the natural gas at various  points to ensure a continuous and regulated flow to help transport natural  gas from one location to another. Compressor stations may emit  methane, ethane, benzene, and other gases, which may pollute the air,  and the stations may also cause noise pollution.

Under Section 7 of the Natural Gas Act, the Federal Energy Regulatory  Commission (FERC) is the federal agency that is charged with evaluating  whether the route, as proposed by a company for an interstate natural  gas pipeline project (i.e., typically pipelines that cross state boundaries),  should be approved. FERC also coordinates with a variety of federal,  state, and local agencies—those that are responsible for protecting  natural, historic, or cultural resources—in order to complete an  environmental review of proposed interstate natural gas pipelines. The  number of federal, state, and local stakeholders and regulations that may  be involved in the interstate permitting process depends on where the  pipeline is being constructed. FERC is not involved in authorizing the  construction and operation of intrastate pipelines (i.e., pipelines that  operate entirely within one state).

Section 27 of the Pipeline Safety, Regulatory Certainty, and Job Creation  Act of 2011 directs GAO to conduct a comprehensive study on the  process for obtaining federal and state permits for projects to construct  pipeline facilities and report on the results of the study 1 year after the  enactment of the act. In response to the mandate, we determined (1) the  processes necessary for pipeline companies to acquire permits to  construct interstate and intrastate natural gas pipelines; (2) information  available on the time frames associated with the natural gas pipeline  permitting process; and (3) stakeholder-identified management practices,  if any, that may improve the permitting process. For purposes of this  report, we consider the permitting process to involve steps companies  need to take to obtain a permit, authorization, certificate, or approval from  a federal, state, or local entity in order to construct a natural gas pipeline.

To describe the processes pipeline companies need to follow to obtain  permits for interstate and intrastate natural gas pipeline construction, we  obtained and analyzed relevant laws, regulations, guidance, and other  federal and state documents. To collect additional information available  on the permitting process as well as factors affecting time frames and  stakeholder-identified management practices, we interviewed  stakeholders, including federal officials from FERC and federal resource  agencies, including the Army Corps of Engineers (Corps), the  Departments of Agriculture and of the Interior, and the Environmental  Protection Agency (EPA); representatives of industry associations,  companies, and public interest organizations; and officials from state  agencies from a nonprobability sample of 11 states. These 11 states are  California, Colorado, Delaware, Florida, New York, North Dakota,  Oklahoma, Pennsylvania, Rhode Island, Texas, and Vermont. We  selected these states using several criteria, including the size of a  pipeline network and population density. Because it is a nonprobability  sample, the information we obtained from these states is not  generalizable to all states but provides illustrative information. To identify  the information available on the time frames associated with the natural  gas pipeline permitting process, we interviewed federal officials and  representatives from industry associations and public interest groups, and  reviewed public records. A more detailed description of our objectives,  scope, and methodology is presented in appendix I.

We conducted this performance audit from May 2012 to February 2013 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: This background discusses (1) the distribution network for natural gas  pipelines, (2) the key federal environmental laws that may be involved in  the permitting process for these pipelines, and (3) the key stakeholders  that may be involved in the permitting process.
subsections: section_title: Distribution Network for Natural Gas Pipelines
paragraphs: A compressor station is a facility that helps the transportation process of natural gas from  one location to another. Natural gas, while being transported through a gas pipeline,  needs to be constantly pressurized in certain distance intervals. The compressor station  compresses the natural gas, thereby providing energy to move the gas through the  pipeline. The gas in compressor stations is normally pressurized by special turbines,  motors, and engines. Pipeline companies install compressor stations along a pipeline  route, typically every 40 to 100 miles. transmission pipelines. PHMSA estimates that there are roughly 2  million miles of distribution pipelines, most of which are intrastate  pipelines, in the United States. These pipelines are considered  outside of FERC’s jurisdictional responsibilities.

section_title: Federal Environmental Laws That May Be Involved in the Pipeline Permitting Process
paragraphs: Several federal environmental laws and agencies may come into play in  the permitting process for natural gas pipelines, depending on the  proposed route for the pipeline. The principal laws involved include the  National Environmental Policy Act, the Clean Water Act, the Endangered  Species Act, and the National Historic Preservation Act.

Pub. L. No. 91-190, 83 Stat. 852 (1970), codified as amended at 42 U.S.C. §§ 4321-4347  (2011).

Intent in the Federal Register. The Notice of Intent acts as the formal  announcement of the project to the public and interested federal,  state, tribal, and local agencies. The lead agency is then required to  determine the scope of the project. During this scoping process, the  lead agency consults with resource agencies—such as the Corps or  the Department of the Interior’s Fish and Wildlife Service (FWS)—to  identify issues and alternatives to be analyzed in the EIS and allocate  assignments for assistance in preparing the EIS. The lead agency will  also identify other environmental review and consultation  requirements under state, tribal, or local laws. Next, the lead agency  prepares a draft EIS and solicits comments from the public;  incorporates these comments into a final EIS; and issues a Record of  Decision. Among other things, the Record of Decision—which is the  final step for agencies in the EIS process—identifies (1) the decision  made; (2) the alternatives considered during the development of the  EIS, including the environmentally preferred alternative; and (3) plans  to mitigate environmental impacts.

Environmental assessment (EA). The lead agency prepares an EA  when it is not clear whether a proposed project will have significant  environmental impacts. An EA is intended to be a concise analysis  that, among other things, briefly provides sufficient evidence and  analysis for determining whether to prepare an EIS. If during the  development of an EA, the lead agency determines that the proposed  project will cause significant environmental impacts, the lead agency  will stop producing the EA and, instead, produce an EIS. However, an  EA typically results in a finding of no significant impact, and this  finding is reported in a document that presents the reasons for the  agency’s conclusion that no significant environmental impacts will  occur when the proposed project is implemented. This finding is  typically based on the use of mitigation measures.

Categorical exclusion. The proposed pipeline project is classified as a  categorical exclusion if a federal agency determines that the project  falls within a category of activities that has already been determined to  have no significant environmental impact. Under a categorical  exclusion, the agency generally does not need to prepare an EIS or  EA.

NEPA regulations require federal agencies to make diligent efforts to  involve the public in the preparation and implementation of NEPA  documents. Under these regulations, agencies must provide a public  comment period for a draft EIS; there is no corresponding requirement for  an EA, but agencies may provide a public comment period.

Clean Water Act.requirements of the Clean Water Act, one goal of which is to eliminate the  addition of pollutants to waters of the United States. Section 404 of the  Clean Water Act requires, among other things, that projects involving the  discharge of dredged or fill material into waters of the United States must  obtain a permit; this permit is typically issued by the Corps. Gas pipelines  may involve such discharges when, for example, they are constructed  within a riverbed, stream, or wetland. Additionally, pipeline construction  may be subject to Section 402 of the Clean Water Act, which prohibits the  discharge of pollutants into waters of the United States without a National  Pollutant Discharge Elimination System (NPDES) permit. Pipeline  construction is also subject to Section 401 of the Clean Water Act, which  requires anyone seeking a permit for a project that may affect water  quality to seek approval from the relevant state water quality agency.

Pipeline projects may also be subject to many  Endangered Species Act. agencies to ensure that any action they authorize, fund, or carry out is not  likely to jeopardize the continued existence of a species listed as  threatened or endangered under the act, or destroy or adversely modify  its critical habitat. To fulfill this responsibility, the agencies must, under  some circumstances, formally consult with FWS or the Department of  Commerce’s National Marine Fisheries Service (NMFS) when the actions  they authorize may affect listed species or designated critical habitat.  Formal consultations generally result in the issuance of biological  opinions by FWS or NMFS. The biological opinions contain a detailed  discussion of the effects of the action on listed species or critical habitat  and FWS’s and NMFS’s opinions on whether the pipeline company has  ensured that its action is not likely to jeopardize the continued existence  of the species or adversely modify critical habitat. In cases where a  pipeline project as proposed is likely to either jeopardize the species or  cause the destruction or adverse modification of its critical habitat, the  opinions are to provide a “reasonable and prudent alternative” to avoid  jeopardy or adverse modification that FWS or NMFS believes the pipeline  company could take in implementing the action.

Pub. L. 93-205, 87 Stat. 884 (1973), codified at 16 U.S.C. §§ 1531-1544 (2011).

National Historic Preservation Act.Preservation Act (NHPA) requires federal agencies to take into account  the project’s effect on any historic site, building, structure, or other object  that is listed on the National Register of Historic Places. The Advisory  Council on Historic Preservation oversees implementation of the Section  106 NHPA authority. In general, the advisory council delegates much of  its authority under NHPA to state historic preservation offices. These  offices identify historic properties and assess and resolve adverse effects  on them under NHPA.

Section 106 of the National Historic  Rivers and Harbors Act of 1899. Harbors Act of 1899, projects such as pipelines that could affect  navigable waters of the United States must receive authorization from the  Corps. Specifically, the Corps regulates any work or structures in, over, or  under navigable waters or any work that may affect the course, location,  or condition of those waters.

section_title: Stakeholders That May Be Involved in the Pipeline Permitting Process
paragraphs: Pub. L. No. 69-560, 44 Stat. 1010; Pub. L. No. 71-520, 46 Stat. 918.

FERC  facilitate the timely development of pipeline projects.approves the construction of interstate pipelines by issuing a  certificate of public convenience and necessity, which includes  conditions that the pipeline company receive all required federal  authorizations before beginning construction, if it has not already done  so. FERC does not become involved in the permitting process for  intrastate pipelines.

Federal resource agencies. Federal resource agencies are  responsible for managing and protecting natural and cultural  resources such as wetlands, forests, wildlife, and historic properties.  Virtually all applications for pipeline projects require some level of  coordination with one or more of the following federal agencies, as  well as others, to satisfy requirements for environmental review:

The Advisory Council on Historic Preservation seeks to promote  the preservation, enhancement, and sustainable use of the  nation’s historic resources. For proposed natural gas pipeline  projects, the Advisory Council on Historic Preservation reviews  and provides comments on those pipeline projects that may affect  properties listed or eligible to be listed on the National Register of  Historic Places pursuant to the NHPA.

The Bureau of Indian Affairs is responsible for, among other  things, approving rights of way across lands held in trust for an  Indian or Indian tribe. In addition, the Bureau of Indian Affairs must  consult and coordinate with any affected tribe.

The Bureau of Land Management (BLM) is principally responsible  for issuing right-of-way permits authorizing natural gas pipelines to  cross federal lands.federal agency, such as National Forest System lands, as well as  BLM lands, BLM is responsible for issuing an authorization.

When pipelines cross the lands of another

The Corps has the authority to issue permits for the discharge of  dredged or fill material into waters of the United States under  Section 404 of the Clean Water Act. The Corps also has  jurisdiction over structures or work in navigable waters of the  United States under Section 10 of the Rivers and Harbors Act. If  any activity could affect a federal project, such as a levee, dam, or  navigation channel, permission from the Corps is required in  accordance with Section 14 of the Rivers and Harbors Act of  1899.

EPA is responsible for administering a wide variety of  environmental laws. EPA’s responsibilities for the pipeline  permitting process include commenting on EISs under the Clean  Air Act; it also has the authority to participate in the Section 404  permit process.

FWS is generally responsible for implementing the Endangered  Species Act, among other laws, for freshwater and terrestrial  species that may be affected by a pipeline construction project.

The Forest Service is responsible for managing 193 million acres  of National Forest System lands, through which many thousands  of miles of natural gas pipelines cross. If a proposed pipeline  crosses more than one federal agency’s lands, BLM issues a  right-of-way permit. In cases where the pipeline only crosses   National Forest System lands, the Forest Service issues a special- use authorization.

NMFS implements, among other things, the Marine Mammal  Protection Act and the Endangered Species Act for most marine  species and anadromous fish (i.e., fish that spend portions of their  life cycle in both fresh and salt water).

State resource agencies. State-level agencies are generally  responsible for managing and protecting a state’s natural and cultural  resources. State resource agencies, such as state environmental or  water quality agencies, as is the case with their federal counterparts,  participate in and review assessments of environmental impacts in  accordance with their responsibilities under federal or state laws. In  some cases, federal agencies have delegated authority to state  resource agencies for carrying out federal laws. Additionally, state  historic preservation offices advise and consult with federal and other  state agencies to identify historic properties and assess and resolve  adverse effects to those properties under the NHPA.

Tribal governments. As part of the planning and review process for  pipeline projects, federal agencies engage in government-to- government consultation between American Indian Tribes and Alaska  Native Corporations. Consultation is a deliberative process that aims  to create effective collaboration and informed federal decision making.  Tribal consultations can be a factor in the overall pipeline project  schedule.

Local governments. Local governments involved in natural gas  pipeline projects may include counties or municipalities that are  empowered by state law or constitution to carry out provisions to  protect the environment or safety of local citizens. This may include  requiring soil and erosion plans or zoning laws.

Public interest groups. Public interest groups, such as Earthjustice,  Delaware Riverkeeper, and the Pipeline Safety Trust, advocate for a  number of issues, including the environment and public safety. They  may comment on a proposed pipeline project during, for example, the  NEPA process or any state processes that include public comment  periods.

Private citizens. Private citizens can provide comments and opinions  in venues like public hearings. Like public interest groups, private  citizens may comment on a proposed pipeline project during, for  example, the NEPA process or any state processes that include  public comment periods.

section_title: The Interstate and Intrastate Pipeline Permitting Processes Can be Complex, with Multiple Stakeholders and Steps
paragraphs: Both the interstate and intrastate pipeline permitting processes are  complex in that they can involve multiple federal, state, and local  agencies, as well as public interest groups and citizens, and include  multiple steps. The interstate permitting process involves three key  phases: a voluntary pre-filing phase, an application phase, and a post- authorization phase with multiple steps. According to stakeholders we  spoke with, the interstate process is consistent because FERC acts as a  lead agency in coordinating multiple stakeholders. The intrastate process  can also include multiple stakeholders and steps. However, those  stakeholders and steps vary from state to state, and most states do not  have a lead agency coordinating the process.
subsections: section_title: The Interstate Permitting Process Involves Three Phases, and Stakeholders Report It Is Consistent because It Has a Lead Agency
paragraphs: We identified three key phases in the interstate permitting process for  natural gas pipelines: pre-filing, application, and post-authorization.  During these phases, federal, state, and local agencies, as well as public  interest groups and citizens, may play a role in approving or commenting  on the application for a permit to construct interstate pipelines. According  to some industry representatives we spoke with, the interstate permitting  process can be time-consuming, depending on the size and complexity of  a proposed project, but it is consistent because FERC, as the lead  agency, assists in coordinating with other stakeholders on the NEPA  environmental analysis.

In 2002, FERC established a pre-filing phase to facilitate and expedite the  review of natural gas pipeline projects through early coordination with  FERC and cooperating agencies (see fig. 1). The intent of this phase is to  involve stakeholders sooner so that potential issues can be identified and  resolved earlier, thereby taking less time overall. Use of this phase is  voluntary, and FERC must approve a company’s request for pre-filing.  For those projects that are less complex, such as those that do not  involve federal lands, endangered species, or crossings of waters of the  United States, applicants may choose not to use the pre-filing phase.  According to FERC officials, in 2012, 67 percent of applicants for major  interstate pipeline construction projects chose to use this phase. In the  pre-filing phase, FERC and the applicant focus on gathering the  necessary information for the environmental analysis, which may involve  numerous federal, state, and local agencies and is typically the most  complex and time-consuming step of the permitting process.

Once FERC approves a company’s request to use the pre-filing phase for  a project, agency staff notify other potential cooperating agencies that  FERC has approved the use of the pre-filing phase and hold a planning or  information meeting with the applicant and the agencies to discuss land  and resource issues and concerns. FERC and the agencies also discuss  the agencies’ ability to commit to an environmental review schedule.  FERC will then work with the applicant and those agencies that are to  have a role in the permitting process to initiate the NEPA scoping  process—that is, the process of defining and refining the scope of an EIS  or EA and the alternatives to be investigated—and begin the  environmental analysis.

Applicants are to hold “open house” meetings in the vicinity of the  proposed project to share information about the project with the public.  FERC staff often attends these meetings to answer any questions about  the FERC permitting process and to invite the public to participate in the  process at future dates. According to FERC’s website, applicants may  incorporate proposed mitigation measures into the project design from  comments received during these meetings. After these meetings, FERC  will issue a Notice of Intent in the Federal Register for the preparation of  an EA or EIS and seek additional public comments. FERC staff may also  hold public scoping meetings for major projects that require an EIS or EA.  Information given by the public during scoping meetings can help the  company prepare environmental mitigation measures.

According to industry representatives we spoke with, FERC’s pre-filing  process was helpful at resolving potential problems earlier in the process,  but other stakeholders said the pre-filing process is confusing and may  limit public input. For example, one natural gas industry representative  noted that the pre-filing phase has made the overall process less  complicated. Another stated that it has resolved potential project  “derailers,” such as issues with routing the pipeline through areas with  endangered species, and has saved time for obtaining a permit. In  addition, another industry representative said that early identification of  stakeholders also increases coverage of potential resource impact issues  so that appropriate surveys, mitigation practices, coordination with local  and state requirements, and planning for habitat management or  conservation can be coordinated with proposed project construction  timelines. On the other hand, some state officials and representatives of  public interest groups were more skeptical of the pre-filing phase. One  representative of an environmental group said the public is unaware of  the pre-filing phase and suggested that FERC and other stakeholders  specifically reach out to environmental groups during the pre-filing phase  if they want to resolve potential issues early in the process. However,  another representative from an environmental group commended FERC  for establishing an e-mail notification system that enables the public to  sign up for e-mails on the progress of a specific project.

Once pre-filing activities are completed or, if the applicant chooses to  forgo the pre-filing phase, the applicant submits an application for a  certificate of public convenience and necessity to FERC (see fig. 2 for  steps in the application phase). FERC issues a Notice of Application,  which includes the following: the unique number assigned to the project;  the ways in which stakeholders, including the public, can become  involved in the proceedings; and the methods for filing comments with  FERC. There are several factors taken into account when FERC  establishes a schedule for the environmental review, including the scope  and complexity of the project, the requirements of any cooperating  agencies, and the requested time frame of the applicant. Schedules may  be adjusted if new concerns are identified, new information is introduced,  or the number of comments received is greater than anticipated.  However, FERC has no authority to enforce that schedule with  cooperating agencies.

FERC then analyzes the information in the application and begins the  scoping process for those proposed projects that did not use the pre-filing  phase or continues the scoping process for those proposed projects that  did use the pre-filing phase. If a company did not use the pre-filing phase,  FERC will begin the scoping process and consult with cooperating  agencies to gather information. Next, FERC will issue a Notice of Intent to  prepare either an EA or EIS. FERC, along with any cooperating agencies,  will prepare either an EA or a draft EIS, depending on the potential  environmental effects of the project. Cooperating agencies are  responsible for assisting FERC in the preparation of the EA or EIS for  those issues that fall within their jurisdiction. For example, if a project  impacts waters of the United States, the Corps is likely to participate in  the development of the EA or EIS because it is responsible for the  regulation of activities in jurisdictional waters of the United States and  would need to evaluate proposed impacts to those waters to inform a  permit decision pursuant to its authorities under Section 404 of the Clean  Water Act and/or Section 10 of the Rivers and Harbors Act of 1899. The  environmental analysis incorporates the necessary information from all  federal agencies in one document.

While FERC may issue the certificate of public convenience and  necessity before all federal permits, certificates, or authorizations are  complete, it will not grant the authority to construct a pipeline without  these federal authorizations. Pipeline companies must coordinate with the  relevant agencies to ensure that these permits, certifications, and  authorizations are completed. This may happen during the application  phase or after FERC issues its certificate.

Some states have developed written agreements with federal agencies  that establish a process for carrying out their roles in consultation, review,  and compliance with one or more federal laws. In some cases, state  agencies have received the authority from federal agencies to implement  federal laws and regulations. For example, the Clean Air Act gives EPA  the authority to limit emissions of air pollutants, such as nitrogen oxides  and methane, that result from constructing and operating natural gas  compressor stations and pipelines. Such emission limits are established  through a preconstruction permit issued by EPA, or, in some cases, by a  state or local agency that has received authority from EPA to issue Clean  Air Act permits in its jurisdiction. According to EPA, at least 75 percent of  preconstruction permits are issued by state and local agencies, and  EPA’s regional offices issue the remaining preconstruction permits. In  areas where the state agency issues the clean air permits under the rules  of their state implementation plan, EPA provides minimal oversight  because the state is the permitting authority and therefore has primacy  over decision making. In addition, state agencies may have delegated  authority to process and issue federal Water Quality Certifications,  required under Section 401 of the Clean Water Act, and Consistency  Concurrences, under the Coastal Zone Management Act.

Environmental permits issued by federal agencies can also vary by state  or by region. For example, the Corps issues two types of permits to  authorize activities under Section 404 of the Clean Water Act and Section  10 of the Rivers and Harbors Act of 1899: (1) individual permits, and (2)  general permits. The type of permit used depends on the type and extent  of proposed impacts on aquatic resources and whether a general permit  is available to authorize such impacts. The Corps issues individual  permits for specific projects that may have more than minimal impacts on  aquatic resources, either individually or cumulatively, or are not otherwise  authorized by general permits. The Corps issues general permits for  activities resulting in no more than minimal adverse effects on the aquatic  environment. The following three types of general permits are used for  natural gas pipeline construction projects that require the discharge of  dredged or fill material into waters of the United States and/or work or  structures affecting the course, location, or condition of navigable waters:

Nationwide permit. This type of general permit is intended to  streamline and expedite the evaluation and approval process  throughout the nation for certain types of activities that have only  minimal impacts, both individually and cumulatively, on the aquatic  environment. Activities that meet the terms and conditions of this type  of permit, such as natural gas pipeline construction projects, are  already authorized by the Corps. The Corps district verifies that the  project meets the conditions outlined in the applicable nationwide  permit. Corps headquarters, rather than one of the 38 district offices,  issues these permits. However, one of the Corps’ eight division offices  may add regional conditions to these permits in order to protect local  aquatic ecosystems or to minimize adverse effects on ecologically  critical areas or other valuable resources.

Regional general permits. This type of permit authorizes activities that  commonly occur in a particular region and that are expected to have a  minimal impact on waters of the United States, but that do not warrant  national authorization. Corps district offices issue this type of permit.

Programmatic general permits. This type of general permit is  established in those states or localities where there is a similar  existing state, local, or other federal agency regulatory program. It is  designed to avoid regulatory duplication. These types of permits may  allow activities, including work in waters of the United States  associated with pipeline projects, to have greater impact on waters  than the nationwide general permits, provided there is still no more  than minimal adverse effect on the environment. The programmatic  general permit will identify those impacts that may be verified by the  state or other entity with no review by the Corps, as well as any  activities that may require notification to the Corps before verification  is provided. Once the programmatic general permit is issued, the state  or local agencies review proposed projects to verify that the proposed  activities meet the terms and conditions of the permit, coordinating  with the Corps’ district offices as necessary.  Corps district offices  receive annual reports from state and local agencies regarding the  use of the programmatic general permits.  Districts also retain the  right to review any proposed project they determine may not meet the  terms and conditions of the programmatic general permit.

Most Corps districts primarily use nationwide permits to authorize work in  waters of the United States in association with pipeline construction  activities. Eight districts have developed regional general permits for  certain activities, that may include pipeline construction, and six districts  have developed state programmatic general permits.  According to a  Corps headquarters official, Corps districts may use different permitting  mechanisms in different states to evaluate work in waters of the United  States in association with pipeline projects. The regulations allow for this  flexibility to account for regional differences in the aquatic environment,  endangered species, historic sites, state regulations, or other factors. For  example:  In Pennsylvania, Corps district offices will generally rely on the  Pennsylvania State Programmatic General Permit-4, under which the  Pennsylvania Department of Environmental Protection verifies certain  impacts that may occur in waters of the United States from the  construction of some pipelines if the project meets certain criteria.According to Corps district officials, the Corps does not use a  nationwide permit for these types of impacts because doing so would  duplicate a similar state permit.

Officials in the Corps’ Fort Worth district office said they typically use  a nationwide permit to authorize work in waters of the United States in  association with pipeline construction. Officials said they have not  considered the use of a programmatic general permit because there  are no similar permitting programs or authorizations required by the  state of Texas.

In Florida, Corps district officials issue both nationwide permits and  regional general permits for work in waters of the United States in  association with pipeline construction. Headquarters officials said the  use of a programmatic general permit has not been considered  because state regulatory processes are not similar enough to develop  such a permit.

In addition to coordinating with federal agencies on the environmental  analysis, FERC may work with state resource agencies and local  governments during the permitting of a natural gas pipeline. For example,  an interstate natural gas pipeline project that runs through Pennsylvania  would require several federal, state, and local permits, licenses,  approvals, and certifications, as shown in table 1. However, some state  and local actions are preempted—that is, they are superseded or  overridden by federal law—because the actions conflict with federal law.  For example, state certificates of necessity and convenience, which  otherwise may be issued by state public utility commissions or other state  agencies, are preempted because FERC’s certificate of public  convenience and necessity supersedes the state’s.

The process differs slightly depending on whether an EA or EIS is  prepared, but in either case, FERC, acting as the lead agency, issues  either a draft EIS or EA, and obtains public comments on the  environmental analysis that was completed. FERC will respond to those  comments, and issue its order either approving or denying the certificate  of public convenience and necessity. According to representatives of  one environmental group we spoke with, the public is not given sufficient  time to intervene in the pipeline permitting process and often must hire  attorneys to help them raise a motion with the agency because the  process is complicated. According to representatives from several interest  groups we spoke with, citizens are often unable to take these additional  steps. However, FERC officials said that, while the agency establishes a  deadline for timely motions to intervene, a motion to intervene can still be  considered once the deadline has passed. Officials also said that an  entity would be well-advised to file a motion to intervene as soon as  possible. State officials we spoke with said that citizens are not well  informed of the complicated interstate pipeline permitting process.

Once FERC has issued a certificate of public convenience and necessity  or denied an application, the applicant or the party to the proceeding can  request that FERC rehear the case or take FERC to court over the  outcome of the case. Otherwise, in order to proceed, the pipeline  company must file an implementation plan with FERC including, but not  limited to, how the company will implement any environmental mitigation  actions identified in the environmental analysis, the number of  environmental inspectors the company will assign to the project to ensure  that mitigation measures are implemented, and procedures the company  will follow if noncompliance occurs. FERC must give written authorization  before construction can begin.  Following that authorization, the pipeline  company must file weekly status reports with FERC documenting  inspection and compliance until all construction activities are completed.  In addition, FERC is to regularly inspect the construction. Section 7 of the  Natural Gas Act grants the right of eminent domain when FERC issues a  certificate of public convenience and necessity; the pipeline company  therefore has the right to acquire the property for that project by eminent  domain if it cannot acquire the necessary land by agreement or if it  cannot agree with the landowner on the compensation to be paid for the  land.

section_title: The Intrastate Permitting Process Varies by State, and Most States We Reviewed Do Not Use a Lead Agency
paragraphs: If a new intrastate natural gas pipeline construction project does not cross  a state border, then the responsibility for approval of pipeline routes falls  to the individual states, and FERC does not play a role in siting the  pipeline. The permitting process for these pipelines varies from state to  state and may involve many federal, state, and local stakeholders. Unlike  the interstate process, the intrastate process in most of the states we  reviewed does not use a lead agency to authorize and coordinate siting  and environmental reviews.

As is the case with the interstate permitting process, pipeline companies  must consider two issues when planning an intrastate natural gas  pipeline: land acquisition and the need to identify the siting authority that  oversees the location and route for that pipeline. To acquire rights to the  land necessary to build the pipeline, pipeline companies will generally  attempt to negotiate right-of-way agreements with individual landowners  along the intended route. If negotiations fail, the companies may seek to  acquire the land through eminent domain proceedings. There is no  uniform standard for right-of-way agreements and eminent domain  authority, and procedures vary by state. However, BLM will process  permits for intrastate natural gas pipelines located on federal lands  administered by the Bureau.

Of the 11 states we reviewed, 5 have agencies charged with siting  intrastate natural gas pipelines. These 5 states require advance approval  of the location and the route of the pipeline. The remaining 6 do not have  siting agencies that require advance approval of location and route. Table  2 shows these differences among the states we examined.

As the table shows, the requirements of the application process differ  from Florida—which generally requires state certification before  constructing certain intrastate natural gas pipelines—to Texas, which  does not require pipeline companies to obtain a permit to construct an  intrastate pipeline and which gives natural gas utility pipeline companies  statutory right of eminent domain without any prior state approval.

According to public interest and industry group representatives we spoke  with, the intrastate process for permitting and siting pipelines needs to be  more transparent. In many states, it is difficult to determine the process  for pipeline siting and whether the state has an agency with siting  authority. They also told us that the intrastate process is challenging to  navigate without an agency that takes the lead on siting and coordinating  the environmental review, as FERC does at the interstate level.  Additionally, representatives from two public interest groups we spoke  with explained that it is more difficult for the public to comment on  proposals for intrastate pipelines because the state processes are not  transparent, and the public may not learn about pipelines until after they  have been approved. The availability of eminent domain authority can  also change how companies deal with land owners and, as a result, can  change land owners’ perspective on the process as a whole, according to  the public interest group representatives.

Federal agencies become involved in the intrastate natural gas pipeline  permitting process if federally protected resources have the potential to  be affected by a project. For example, the Corps becomes involved when  a proposed pipeline will be constructed in aquatic resources over which it  has jurisdiction and FWS becomes involved if the route crosses an area  with a plant or habitat on the federal list of threatened or endangered  species.

State environmental laws and regulations are applicable to intrastate  pipelines. However, in 10 of the 11 states we reviewed, no single entity is  responsible for coordinating all of the environmental reviews, including  federal and state authorizations, during the intrastate permitting process.  For example, in Rhode Island, the Energy Facility Siting Board is the  authority for approving the siting and construction of natural gas pipelines;  the pipeline company is responsible for obtaining all necessary permits,  including all permitting and licensing under the jurisdiction of the state’s  Department of Environmental Management. Conversely, the New York  State Public Service Commission is the lead agency for the siting of  intrastate natural gas pipelines. This department coordinates with other  affected state agencies and local governments on the permitting  process—one stop licensing.

section_title: Time Frames for Interstate and Intrastate Pipeline Permitting Processes Vary Because of Multiple Factors
paragraphs: For interstate pipelines, FERC’s public record information system  contains documents that provide dates associated with the phases of the  permitting process; however, FERC does not track the time it takes to  complete the process. FERC officials said data on processing time  frames is of limited use when planning a project because the variability  among projects can make them incomparable. Using the information  available on interstate natural gas pipeline projects certified from January  1, 2010, to October 24, 2012, we determined that the average processing  time from pre-filing to certification for interstate natural gas pipeline  projects was 558 days, and the processing times ranged from 370 to 886  days. These projects varied in size and function and included pipelines,  pipeline expansions, compressor stations, and other pipeline facilities. For  projects that begin in the application phase, the average processing time  from formal filing to certification was 225 days for this period. The  processing times for these projects, which tended to be for compressor  stations and smaller pipeline expansions, ranged from 63 to 455 days.

For intrastate pipelines, because the permitting process varies by state,  the time frames for those processes may also vary. As is the case with  interstate pipelines, time frames associated with permitting of intrastate  pipelines may also vary because of differences in stakeholders, siting,  and environmental factors and range in the amount of time to complete  the permitting process. Some state agencies gave us estimates of time  frames for specific parts of the process, but we found little comprehensive  data on the intrastate permitting process in the states we reviewed.  Comprehensive data are probably not available because most states do  not have a lead agency that coordinates all the reviews necessary to  complete the permitting process. For example, North Dakota state  officials estimated that the siting part of the permitting process for  intrastate pipelines takes just over 3 months; however, these 3 months do  not include the time associated with any federal or state environmental  reviews that may be necessary for pipeline projects. A New York state  official estimated that the entire intrastate permitting process, including  siting and all environmental reviews, takes 60 to 90 days for small  pipelines, 3 to 6 months for medium pipelines, and 12 to 18 months for  large pipelines. However, according to the official, these time frames vary  depending on the complexity of the project and public opposition.

The following factors can further affect the time frame for an interstate or  intrastate pipeline project’s permitting process, as our stakeholders  explained:

Corps Section 404 Clean Water Act and Section 10 Rivers and  Harbors Act permitting. The Corps does not have statutory deadlines  or time frames for evaluating applications for natural gas pipelines or  other types of regulated activities. However, the Corps has two  performance measures specific to the timing of permit decisions. For  standard individual permits, the Corps has a goal of completing its  reviews and making permit decisions for 50 percent of permit  applications within 120 days from receiving complete applications. In  fiscal year 2011, the Corps reported that it had issued a decision on  71 percent of these applications within 120 days. The Corps has a  goal of processing 75 percent of general permits within 60 days from  receiving a complete request. In fiscal year 2011, the Corps reported  that it had acted on 90 percent of these requests within 60 days.  However, a headquarters official explained that the Corps collects  information on time frames for reviewing applications and issuing  decisions for all utility projects under Section 404 of the Clean Water  Act and Section 10 of the Rivers and Harbors Act and does not  separate data specific to natural gas pipelines from its reviews of  other utility projects.

According to Corps officials, application review can take longer for a  number of reasons, such as the time it takes to receive all necessary  information from the applicant and the time it takes for other agencies  to complete decisions necessary for the Corps to finalize its review.  For example, according to a Corps district official and Pennsylvania  state officials, the Pennsylvania Department of Environmental  Protection had, in recent years, a backlog of applications that delayed  the transfer of applications to the Corps, but that backlog has been  cleared. Pennsylvania officials said this backlog had probably  occurred because the number of pipeline applications doubled since  hydraulic fracturing of Marcellus Shale began in Pennsylvania.

FWS and NMFS review under the Endangered Species Act. Federal  reviews required under the Endangered Species Act can also affect  time frames for the evaluation of natural gas pipeline projects. These  projects can be permitted under the act in two ways. First, under  section 7 of the act, federal agencies must ensure that any action they  carry out (or actions of a nonfederal party that require a federal  agency’s approval, permit, or funding) is unlikely to jeopardize the  continued existence of a listed species or destroy or adversely modify  its critical habitat. To fulfill this responsibility, federal agencies must  consult with either FWS or NMFS (whichever agency has jurisdiction)  when their actions may affect listed species or critical habitat. Formal  consultations generally result in the issuance by FWS or NMFS of  reports known as “biological opinions,” which discuss in detail the  effects of proposed actions on listed species and their critical habitat,  as well as that agency’s opinion on whether a proposed action is likely  to jeopardize a species’ continued existence or destroy or adversely  modify its critical habitat. The opinion also determines the quantity or  extent of anticipated “incidental take”—that is, take that is not  intentional but occurs nonetheless as a result of carrying out an  agency action. FERC consults with FWS or NMFS under section 7 of  the Endangered Species Act for the construction of interstate natural  gas pipelines.

For actions without a federal nexus (i.e., no federal funding, permit, or  license), section 10 of the Endangered Species Act provides an  avenue for entities to obtain permits for activities—such as the  construction of a natural gas pipeline or a highway—that may result in  the take of a listed species. An applicant for a permit is to submit a  habitat conservation plan that shows the likely impact of the planned  action; steps taken to minimize and mitigate the impact; funding for  the mitigation; alternatives considered and rejected; and any other  measures FWS or NMFS may require. According to representatives of  an industry association we spoke with, their members report  successful coordination of consultations under section 7 of the act  because a federal agency, such as FERC for interstate pipelines and  BLM for some intrastate pipelines, can assist the pipeline company in  establishing long-term mitigation plans and other requirements for  section 7 approval. The section 10 review process is less preferable,  according to representatives, because the pipeline company is  responsible for coordinating the relevant federal and state agency  reviews and permits before the section 10 review is completed, which  takes more time than a section 7 consultation.

Delays in state and local government reviews. State and local  permitting and review processes can take time and affect federal  decision-making time frames because some federal agencies cannot  issue their permits until state and local governments have completed  their own permitting processes. For example, permits for federal  programs delegated to states, such as section 401 of the Clean Water  Act, can take time for state agencies to review and are needed for the  Corps to issue an individual permit or verify a general permit.  According to a Corps official and state officials, some states  experience delays in completing these reviews.

Overlap of federal, state, and local environmental processes.

According to representatives of an industry association we spoke with,  jurisdictional overlaps between federal, state, and local agencies force  pipeline companies to obtain environmental permits or approvals from  more than one level of government for the same activity. In some  cases, the pipeline company must coordinate the pipeline route with  the requirements for permits and reviews required by up to four  different authorities at the federal, state, county, and municipal level.  For example, these representatives stated, EPA’s regional office  serving Alabama requires that ordinances be adopted to create a local  construction storm water permitting program to regulate the same  construction sites that the Alabama Department of Environmental  Management already regulates under its statewide program.  According to these representatives, natural gas pipeline projects  throughout the state of Alabama are required to comply with the state  issued general permit as well as overlapping permits for the same  activities in any of the 67 counties and hundreds of small towns that  their projects may pass through. These industry representatives  reported project delays and resource allocation constraints because  several layers of reviews and permits involving various federal, state,  and local stakeholders often take place to address the same  environmental issues for the same natural gas project. However,  according to representatives of public interest groups we spoke with,  efforts to combine federal, state, and local processes can undermine  the opportunity for public comment.

Incomplete applications. Officials in all of the Corps district offices that  we spoke with reported that incomplete applications may delay their  review because applicants need time to revise their information.  Applications are considered incomplete for a variety of reasons. For  example, the application may be missing jurisdictional information  (i.e., where the waters of the United States are located relative to the  project) or the applicant may miscalculate impacts. Officials from a  state resource agency told us that environmental consultants, hired  and given processing deadlines by pipeline companies, may submit  incomplete applications in order to meet those deadlines. According to  a Corps headquarters official, if applicants do not submit all of the  appropriate documentation, the permit process may be delayed.

Project opposition. Public opposition and litigation can lengthen the  time needed to review a pipeline project or even lead to the  cancellation of a project. For example, public interest groups can work  with the public to request extended comment periods and public  hearings for proposed natural gas pipeline projects that may  adversely affect the environmental resources in the area.

section_title: Natural Gas Pipeline Stakeholders Identified Management Practices to Improve the Permitting Process
paragraphs: According to officials from federal and state agencies and representatives  from industry and public interest groups we interviewed, several  management practices could be implemented to help overcome some of  the challenges of a complex permitting process identified by these  stakeholders. These practices would help overcome the challenges  involved in implementing an efficient permitting process and obtaining  public comments on pipeline projects. In this regard, in March 2012, the  president signed Executive Order 13604, which aims to institutionalize  best practices and reduce the amount of time required to make permitting  and review decisions for infrastructure projects, including pipelines.  Stakeholders we spoke with and the administration, in its plan for  implementing the executive order, identified the following management  practices as effective, among others:

Ensuring a lead agency is coordinating the efforts of federal, state,  and local permitting processes for intrastate pipelines.  Representatives from industry and public interest groups we  interviewed noted that the interstate process is better coordinated  than intrastate processes because FERC is designated as the lead  agency for the environmental review of a pipeline project, but there is  no similar lead agency in the intrastate permitting process.  Representatives of a public interest group noted that the absence of a  lead agency also makes it difficult for the public to become involved in  the permitting process because citizens often do not know which  agency to contact about a pipeline project.

In that regard, in July 2001, the Interstate Oil and Gas Compact  Commission and the National Association of Regulatory Utility  Commissioners’ pipeline siting working group recommended that each  state establish a coordinating effort within the governor’s office to  monitor and assist in expediting the permitting process, while  eliminating duplication of activities among state and local permitting  entities. They further recommended that states identify all participants  in the permitting process, consider naming a lead agency to monitor  processing schedules within existing regulatory requirements, and  determine information that needs to be communicated to the public.

Ensure effective collaboration of the numerous stakeholders.

Stakeholders we interviewed emphasized the importance of  collaboration among the numerous stakeholders involved in the  permitting process. Some federal officials noted delays occur in the  permitting process when stakeholders do not collaborate effectively.  For example, a federal agency’s permitting process may be delayed if  it receives insufficient information from a cooperating agency. The  federal plan for implementation of Executive Order 13604 identified  several examples of best practices to enhance interagency  coordination. Some federal agencies have memorandums of  understanding or agreements with other agencies to establish  collaborative relationships that relate to the permitting process. For  example, as described earlier, FERC and nine other agencies signed  an interagency agreement for early coordination of required  environmental and historic preservation reviews to encourage the  timely development of pipeline projects. FERC and FWS also have a  memorandum of understanding that focuses on avoiding or  minimizing adverse impacts on migratory birds and strengthening  migratory bird conservation through enhanced collaboration.

Providing planning tools to help companies plan routes for pipelines  and avoid sensitive environmental resources. Industry representatives  we spoke with noted that there is a need for technology tools that can  aid in the proper routing of pipelines when companies are planning a  project. Such tools should involve mapping software and best  practices for specific areas of the country so that agencies do not  need to reassess environmental impacts each time a company plans  a project. These tools would also allow the project to be routed with  the fewest environmental impacts at an early stage in the pipeline  company’s design process. Without such tools, it is difficult for  pipeline companies to route a project given the various federal, state,  and local requirements that are not available in a single location. For  example, FWS is currently developing such a tool—the Information,  Planning and Conservation (IPaC) System—that is expected to let  companies determine whether there are any endangered and  threatened species in a potential project area and obtain information  about the measures the companies can take to help protect and  conserve those species when designing and constructing a project.  This system is expected to help companies make better routing  decisions early on, eliminating the need to modify project plans later in  the permitting process. The federal plan to implement Executive Order  13604 selected IPaC as an example of a best practice to “reduce  surprises and help project proponents make better informed design  decisions early, when there is more flexibility to make minor  modification with minimum disruption of the project goals.”

Another planning tool that was mentioned as making the process  more efficient by industry representatives was the Pennsylvania  Natural Diversity Inventory Environmental Review Tool, which screens  proposed projects to identify, avoid, or mitigate impacts on federal or  state-identified threatened or endangered species. Industry  representatives said this tool has been helpful to determine potential  adverse impacts and plan mitigation.

In addition, BLM designates pipeline corridors as part of its land use  planning process. According to BLM officials, corridors reduce  environmental impacts by allowing projects to share access roads and  use previously disturbed areas. They also reduce the need for new  data collection and land use plan amendments.

Offering industry the option to fund contractors or agency staff to  expedite the permitting process. Industry representatives said that  many pipeline companies are willing to fund contractors or agency  staff to speed up their application review process, which has slowed  because of increasing numbers of energy projects and fewer agency  resources. For example, stakeholders cited FERC’s practice of  allowing applicants to fund a third-party contractor to review  applications and assist the agency in preparing NEPA environmental  documents. The third-party contractor is selected by and works under  the supervision of FERC officials but is paid by the pipeline company.  Other federal agencies have similar practices that allow applicants to  offer funding assistance during the permitting process. A FWS official  said this outside support is essential for agencies given the heavy  workload and short time frames associated with pipeline projects.  However, not all agencies have Congressional authority to accept  funds. For instance, according to Corps officials, the agency cannot  accept funds from private entities and can only accept funds from  non-Federal public entities under specific circumstances.

Increase the opportunities for public comments. According to  representatives of some public interest groups and some state  officials we interviewed, the public needs to have more opportunities  to comment on a proposed pipeline project during the permitting  process. A representative from one group observed that, while the  typical NEPA process for public input allows the public to comment  throughout the environmental review, FERC only offers a brief period  for formal public comments. Representatives of other groups  mentioned that, because the pipeline permitting process is  complicated, it is difficult for the public to know when and how to  comment and that additional information from the applicant, FERC,  and states would be helpful. The implementation plan for Executive  Order 13604 includes multiple best practice examples to improve  outreach and education of the public. For example, the Department of  the Interior is developing a web-based clearinghouse for  environmental information on energy resource development. This  clearinghouse is to provide environmental best practices, methods for  conducting environmental assessments to aid in decision making,  links to applicable federal and state laws related to energy  development, and information on the various impacts of energy  development projects.

section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report for review and comment to the  Departments of Agriculture, Defense, and the Interior; EPA; and FERC.  The Department of Agriculture provided written comments in which they  generally agreed with the overall findings of the report. The written  comments are presented in appendix II of this report. The Department of  Defense generally agreed with the overall findings of the report and  provided technical or clarifying comments, which we incorporated as  appropriate. The Department of the Interior and FERC provided technical  or clarifying comments, which we incorporated as appropriate.  EPA  indicated that they had no comments on the report.

We are sending copies of this report to the appropriate congressional  committees; the Secretaries of Agriculture, Defense, and of the Interior;  the Administrator of EPA; the Chairman of FERC; and other interested  parties. In addition, the report is available at no charge on the GAO  website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-3841 or ruscof@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix III.

section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our objectives for this review were to determine (1) the processes  necessary for pipeline companies to acquire permits to construct  interstate and intrastate natural gas pipelines; (2) information available on  the time frames associated with the natural gas pipeline permitting  process; and (3) stakeholder-identified management practices, if any, that  may improve the permitting process. For purposes of this report, we  consider the permitting process to involve steps companies need to take  to obtain a permit, authorization, certificate, or approval from a federal,  state, or local entity in order to construct a natural gas pipeline.

To understand processes and permits required to construct natural gas  pipelines at the federal level, we reviewed relevant federal laws and  regulations, as well as agency documentation, such as the interagency  agreement between the Federal Energy Regulatory Commission (FERC)  and nine other federal agencies regarding their coordination during the  review process for the National Environmental Policy Act and efforts to  facilitate the development of natural gas pipeline projects. In addition, we  reviewed literature on natural gas pipeline permitting issues and previous  relevant GAO reports. We interviewed officials with regulatory  responsibilities at FERC, the Army Corps of Engineers (Corps), the  departments of Agriculture and of the Interior, and the Environmental  Protection Agency. We also interviewed a range of other knowledgeable  individuals—including representatives of public interest groups, such as  the Pipeline Safety Trust and Delaware Riverkeeper Network; and  representatives of industry groups, such as the American Gas  Association and the American Petroleum Institute—whom we identified as  having expertise related to the permitting of natural gas pipelines.

To determine the processes for obtaining permits to construct natural gas  pipelines at the state level, we selected a nonprobability sample of states  for further review. We developed the following list of criteria to use as a  tool for determining which states to include in our review:  size of pipeline network (miles of pipe); amount of natural gas production (trillion British thermal units); amount of natural gas consumption (trillion British thermal units); natural gas inflow capacity (Million Cubic Feet per Day); natural gas outflow capacity (Million Cubic Feet per Day);  recommendations from federal agency officials and other  knowledgeable individuals.

Because we anticipated that states differ in their pipeline permitting  processes, it was important to include states that ranked both high and  large on the selection criteria, as well as states that ranked are low and  small. We selected states by identifying the top five and the bottom five of  each selection factor. For example, in considering the size of the pipeline  network, we identified the five states with the most miles of pipeline and  the five states with the fewest miles of pipeline. We also identified the  states that were of congressional interest, recommended by a federal  agency, and/or other knowledgeable individuals we spoke with. The  states selected in our review are those that were most frequently  recommended and/or identified in our ranking process. We selected  states that were recommended and/or identified in our ranking process at  least four times to be included in our review. Twelve states were above  this threshold—California, Colorado, Delaware, Florida, Louisiana, New  York, North Dakota, Oklahoma, Pennsylvania, Rhode Island, Texas, and  Vermont. Louisiana was later omitted from our review because of limited  response from the state. For our selected states, we reviewed relevant  documentation and conducted interviews with state agency officials and  officials at Corps district offices in California, Florida, Pennsylvania, and  Texas. Because our sample was a nonprobability sample, the information  we obtained is not generalizable to all states but provides illustrative  information.

To identify the information available on the time frames associated with  the natural gas pipeline permitting process, we conducted interviews with  federal officials, industry associations, and public interest groups. In  addition, we reviewed documents contained in FERC’s eLibrary, which is  a record information system of electronic versions of documents issued  and received by FERC on natural gas pipeline projects. FERC provided  us with information on projects certified from January 1, 2009, to October  24, 2012. Owing to time and resource constraints, we limited our review  to projects certified since January 1, 2010, and used eLibrary to access  documents that contained information on the pre-filling date, traditional  filling date, and certification date of these projects. In addition, we  conducted interviews with FERC officials to determine the completeness  of the documents contained in the system.

We conducted this performance audit from May 2012 to February 2013,  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

section_title: Appendix II: Comments from the Department of Agriculture

section_title: Appendix III: GAO Contacts and Staff Acknowledgements
subsections: section_title: GAO Contact

section_title: Acknowledgments
paragraphs: In addition to the individual named above, key contributors to this report  included Karla Springer, Assistant Director; Pedro Almoguera; Cheryl  Arvidson; Cindy Gilbert; Griffin Glatt-Dowd; Holly Sasso; Carol Herrnstadt  Shulman; Barbara Timmerman; and Jeremy Williams.


Question-summary annotations: questions: question: What groups can be involved with interstate and intrastate natural gas pipeline processes?
answer: Both the interstate and intrastate natural gas pipeline permitting processes are complex and can involve multiple federal, state, and local agencies, as well as public interest groups and citizens, and include multiple steps.
child_questions: question: How do the phases within the interstate process work?
answer: The interstate process involves a voluntary pre-filing phase, an application phase, and a post-authorization phase with multiple steps that stakeholders reported to be consistent among projects because the process is led by the Federal Energy Regulatory Commission (FERC).
child_questions: question: How is FERC involved in this process?
answer: FERC coordinates with federal, state, and local agencies that have statutory and regulatory authority over various environmental laws and regulations. For example, if a proposed pipeline may affect endangered species, FERC coordinates with the U.S. Fish and Wildlife Service, which reviews the impacts on such species.

question: How does the intrastate process differ from the interstate process?
answer: The intrastate process can also involve multiple stakeholders and steps, but, unlike in the interstate process, GAO found that the stakeholders and steps vary by state.
child_questions: question: How do states vary within their processes?
answer: For example, of the 11 states GAO reviewed, 5 have agencies charged with approving the route of natural gas pipelines and require advance approval of the location and route, and the remaining 6 do not.

question: Why is coordination between pipeline companies and environmental laws and regulations difficult to implement within certain states?
answer: Pipeline companies must also comply with various federal and state environmental laws and regulations; however, in most of the 11 states, no one agency is charged with coordinating the implementation of these laws and regulations as FERC is for the interstate process.

questions: question: Why is it difficult to know the time frames associated with the permitting processes?
answer: Time frames associated with the interstate and intrastate permitting processes vary because of multiple factors, according to stakeholders.
child_questions: question: Why is it a challenge to know time frames for interstate process?
answer: For the interstate process, FERC does not track time frames, citing the limited usefulness of such data.
child_questions: question: What did GAO find about this process?
answer: GAO analyzed public records and found that, for those projects that were approved from January 2010 to October 2012, the average time from pre-filing to certification was 558 days; the average time for those projects that began at the application phase was 225 days.

question: Why do time frames vary for the intrastate process?
answer: For the intrastate process, because processes vary by state, the time frames of those processes may also vary. For example, state and local permitting and review processes can affect federal decision-making time frames because some federal agencies will not issue their permits until state and local governments have completed their own permitting processes, according to some stakeholders.

questions: question: How has an increase in domestic natural gas production changed the pipeline landscape?
answer: Recent growth in domestic natural gas production, particularly due to increased production from shale, is resulting in an increase in the pipelines needed to transport that gas.
child_questions: question: What are some environmental concerns with natural gas pipelines?
answer: Constructing natural gas pipelines requires clearing and maintaining rights-of-way, which may disturb habitat and historical and cultural resources.
child_questions: question: What protections are in place for these historical and cultural resources?
answer: These resources are protected under a variety of federal, state, and local regulations implemented by multiple agencies.

question: What entities have a say in where the pipeline is constructed?
answer: The laws, regulations and stakeholders involved in the permitting process depend on where the pipeline is constructed.
child_questions: question: With what pipelines is FERC involved?
answer: FERC is the lead federal agency in approving interstate pipelines, coordinating with federal, state, and local agencies, but FERC is not involved in the approval of intrastate pipelines.