Pacific Northwest Gas Proposal Highlights FERC Balancing Act

The Gas Transmission Northwest Xpress project seemed noncontroversial to TC Energy when the Canadian energy company first proposed it to regulators in October 2021.

The project consisted of upgrades to three gas compressor stations to flow more gas along an existing pipeline system that had been in operation since 1962 in the Pacific Northwest. It would provide more fuel to customers in California, where gas prices spiked during the last winter heating season.

But environmental groups, US senators, and three states’ attorneys general saw it locking in fossil fuels for 30 years as the region pursues ambitious renewable energy goals to decarbonize the power grid.

Proposed more than two years ago, the pipeline upgrades have become the longest-pending project of its kind at the Federal Energy Regulatory Commission—and a case study for how US regulators balance state renewable energy goals and costs to consumers.

Map courtesy of TC Energy

The commission included the project on the agenda for its Oct. 19 meeting, but that’s no guarantee it will be approved. The project was among six gas items scrapped from the agenda at the commission’s July meeting, raising concerns the commission was deadlocked on how to consider greenhouse gas emissions.

Four of those withdrawn projects were ultimately approved last month, but GTN Xpress and WBI Energy’s Wahpeton Expansion Project in North Dakota didn’t make the cut. FERC doesn’t discuss internal deliberations, so it’s unclear why a decision on the projects has been held up.

“The GTN Xpress project will play a critical role in offsetting rising energy prices and supporting renewable electricity development in the Pacific Northwest and California,” said Michael Tadeo, a spokesman for TC Energy. “The project has strong regional backing, as evidenced by long-term agreements entered into by local utilities and support expressed by elected officials, labor groups and consumers.”

Residents and environmental advocates expressed concern about public safety from gas pipelines, while also saying consumers shouldn’t have to pay for an expansion of fossil fuels. Sens. Jeff Merkley and Ron Wyden, both Democrats from Oregon, have penned letters urging FERC to reject the project, including one that was sent days before the project was withdrawn from the July meeting. Protesters have rallied outside FERC meetings for months.

In August 2022, Oregon Attorney General Ellen Rosenblum joined California Attorney General Rob Bonta and Washington Attorney General Bob Ferguson in petitioning the commission to deny the request. The attorneys general disputed the need for more natural gas and said it would lead to 3.47 million metric tons of carbon dioxide. FERC, in its final environmental impact statement, came up with an estimate of about 1.9 million metric tons of reasonably foreseeable emissions.

“Where states are working really hard to reduce GHG emissions, FERC shouldn’t get in the way,” said Dan Serres, advocacy director for Columbia Riverkeeper, a Portland-Ore.-based organization that protects, restores and cares for the Columbia River.

“You have a region and states working really hard to try to diminish gas use and the pollution that goes with gas use, and you have the Biden administration saying they take environmental justice and climate seriously—and their FERC appears poised to rubber-stamp this project,” Serres said.

The project plays into broader debates about the pace of clean energy deployment. In California, state officials have aggressively rolled out renewables over the years, but more recently leaned on supplies of natural gas and nuclear power to keep the power grid stable.

California’s Democratic leaders reversed the state’s plans to close the Diablo Canyon Nuclear Power Plant and voted in August to keep three natural gas-fired power plants in Southern California running until 2026.

Last month, state officials approved the expansion of natural gas storage capacity at Aliso Canyon, the site of the largest natural gas leak in US history in 2015.

Natural gas prices got so high that in February 2023, California Gov. Gavin Newsom (D) urged FERC to investigate market manipulation by gas providers. While Newsom didn’t mention GTN Xpress in the letter, TC Energy’s CEO cited the governor’s price concerns in a letter to FERC last month on consumer need for the project.

Reached this month, a Newsom spokesperson declined to comment on whether the governor supported or opposed GTN Xpress.

Approving the project would address the high natural gas prices Newsom is concerned about, said Neil Chatterjee, a former Republican FERC chairman.

“This is a small project and shouldn’t be subject to this kind of delay,” Chatterjee said. “That’s what FERC is there for — to alleviate constraints in the system and help bring about low prices.”

“If politics is the source of delay, FERC needs to look past that,” he said.

The GTN Xpress includes modifications to three existing compressor stations located in Kootenai County, Idaho, Walla Walla County, Wash., and Sherman County, Ore. The project would create an additional 150,000 dekatherms of energy per day on the system.

The company’s application to FERC planned to have the system upgrades in place by next month. If the commission approves the project this month, the project wouldn’t be complete until the next winter heating season.