WASHINGTON — Congress needs to disallow states from vetoing Clean Water Act permits for interstate natural gas pipelines, FERC Chair Laura Swett said Feb. 24.
With natural gas production expected to shatter records this year, Swett joined oil and gas executives at the annual Energy Aspects Conference to urge Congress to advance permitting reform legislation that would ease the construction of natural gas pipelines.
“We can do everything to speed up the process,” Swett said. “But the court will overturn that pipeline if any state in the right of way of that pipeline does not grant the [Clean Water Act] permit.”
An attorney with Vinson & Elkins representing energy companies prior to her nomination, Swett said much of the regulatory expense and uncertainty stems from prolonged litigation over permits. “Congress has to not allow states to effectively veto federal projects.”
The Clean Water Act’s Section 401 authorizes states to certify that a proposed activity, be it construction of a pipeline or a hydroelectric dam, won’t harm water quality. States and environmental groups have used this provision and other laws to block pipeline construction, such as the 303-mile-long Mountain Valley Pipeline, which now transports natural gas from the shale production areas of northern West Virginia to Virginia. Its construction was allowed only after President Joe Biden signed the Fiscal Responsibility Act of 2023 into law.
FERC is once again considering Williams Companies’ 124-mile Constitution Pipeline, for which New York state declined to issue a water permit. On the day of the conference, the state argued in a filing that the commission must dismiss the petition and not force its Department of Environmental Conservation to “engage in yet another round of wasteful administrative review.”
Joining Swett on the panel was Toby Rice, CEO of EQT, the largest natural gas producer in the Appalachian Basin. He agreed that supply is not the problem; infrastructure is.
“Our biggest challenge in natural gas is the infrastructure that it takes to move this to market,” Rice said. “While we spend maybe 50 cents getting it out of the ground, I’ll spend $1 [to] $1.50 getting it to market.” It costs two to four times as much to ship natural gas to Boston as to extract it from the ground, he said.
Despite concerns about fracking, the shale boom has achieved record production. However, Rice said, “the pipeline cancellation movement is the only time environmentalists have been successful in shutting down development.”
Approximately 65% of total pipeline capacity built in 2025 consists of intrastate pipelines, continuing the trend of intrastate pipeline builds outpacing interstate capacity additions, the U.S. Energy Information Administration reported Feb. 25.
Congress has been debating permitting reform for years without success, but Mike Sommers, CEO of the American Petroleum Institute, is optimistic about its prospects under a Republican-controlled Congress.
“I am more optimistic today than I was three months ago that we actually could get something done this year with this Congress, because it is becoming a political imperative for politicians to do this because of affordability,” Sommers said.
Meeting Power Demand
While much of the conference was focused on the oil and gas production and celebrating the 10th anniversary of the first LNG cargo shipment from the Sabine Pass Terminal, panels also discussed rising power demand from data centers and potential solutions.
Speaking prior to Swett and Rice in an earlier panel on policy perspectives, Deputy Energy Secretary James Danly acknowledged that rising electricity demand is “undeniable.”
He said the Department of Energy is taking steps to ensure reliability while making sure rates remain affordable.
“We are doing everything we can to reconductor as many of the strategically important transmission lines to reduce congestion costs and to improve reliability,” Danly said.
He also noted that DOE petitioned FERC in October to explore rules governing the co-location of large electricity loads, such as data centers, with on-site generation. The proposal would allow large users to supply their own power under certain conditions. (See Energy Secretary Asks FERC to Assert Jurisdiction over Large Load Interconnections.)
FERC is working its way through the voluminous comments on DOE’s proposal, with the department asking for action by April 30 (RM26-4).
President Donald Trump alluded to data centers bringing their own generation in his State of the Union address to Congress the same day as the conference, saying he had reached a “a new ratepayer protection pledge” with major tech companies to build their own power plants.
Calling it a “unique strategy never used in this country before,” Trump said this approach will ensure that “no one’s prices will go up, and in many cases, prices will go down for the community, substantially down.”
Trump did not disclose the names of the firms involved in the pledge, and it is still unclear what exactly it will involve. The president is planning to host officials from Amazon, Google, Meta, Microsoft, xAI, Oracle and OpenAI at the White House to sign the pledge March 4.
In the conference’s final panel, Invenergy CEO Michael Polsky said the U.S. grid must be improved before new generation sources are added.
“You build roads, and then you build houses,” Polsky said. “The same goes with electricity; you build up a grid first.”