White House Threatens to Veto American Infrastructure

In his 2015 State of the Union address, President Obama emphasized the importance of infrastructure while at the same time making a not-so-subtle quip about the Keystone XL oil pipeline:

21^st century businesses need 21^st century infrastructure – modern ports, stronger bridges, faster trains and the fastest internet. Democrats and Republicans used to agree on this. So let’s set our sights higher than a single oil pipeline. Let’s pass a bipartisan infrastructure plan that could create more than thirty times as many jobs per year, and make this country stronger for decades to come. [Emphasis mine]

However, the president’s disdain for improving America’s pipeline infrastructure is not unique to Keystone XL. Before his SOTU speech, the White House announced that the president planned to veto H.R. 161, The Natural Gas Pipeline Permitting Reform Act if it ever made it to his desk. This legislation, introduced by Rep. Mike Pompeo (R-KS), would “provide for the timely consideration of all licenses, permits, and approvals required under Federal law with respect to the siting, construction, expansion, or operation of any natural gas pipeline projects.” God forbid.

Essentially, the bill would speed up the process of expanding and constructing new natural gas pipelines by:

1. Requiring the Federal Energy Regulatory Commission (FERC) to approve or deny an application within 12 months.

2. Requiring the responsible agency to approve or deny a license, permit, or approval within 90 days of FERC’s approval. The agency can extend the time period by 30 days if it demonstrates that it cannot complete the process in the 90 days.

Why We Need More Pipelines

Pipelines are critical for delivering affordable and reliable energy to American families. Last winter’s polar vortex and the stress it put on the Northeast’s pipeline infrastructure demonstrated the need to expedite the permitting process and construct more natural gas pipelines. In recent years, the region has increasingly turned to natural gas as an electricity source in addition to using it as a heating source. When demand for heating spiked last winter, there simply wasn’t enough pipeline capacity to meet this demand.

As the Institute for Energy Research has explained, this lack of infrastructure sent natural gas and electricity prices through the roof last winter. On January 6, 2014 natural gas prices more than doubled in New England and nearly quadrupled in New York. Similarly, on Tuesday January 7, 2014, wholesale electricity prices in the region, which typically hover around $40 or $50 per megawatt-hour, jumped to $200 in New England and $500 to $1,000 in other parts of the region. These skyrocketing prices could have been avoided, or at least lessened, had there been enough pipeline capacity.

Conclusion

Last winter’s polar vortex clearly demonstrated the need for more natural gas pipelines. By streamlining the process, the Natural Gas Pipeline Permitting Reform Act would help the Northeast and other impacted regions avoid a similar fate during future winters. Unfortunately, President Obama’s promise to veto this commonsense infrastructure bill could leave Americans susceptible to future price spikes.

Click here to read AEA’s “Key Vote” alert for H.R. 161