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CERAWEEK-US permit reviews, red tape provoke energy conference debates
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CERAWEEK-US permit reviews, red tape provoke energy conference debates
Mar 20, 2024 11:24 AM

By Arathy Somasekhar

HOUSTON, March 20 (Reuters) - U.S. energy permitting

delays and the need for streamlined new project reviews

dominated conversations among oil and gas executives and

lawmakers in meeting rooms and hallways at the CERAWeek energy

conference this week.

The fossil fuel industry historically has objected to red

tape that slows or raises development costs. But the topic has

moved higher on their agenda after U.S. President Joe Biden's

administration hit pause on reviews of permits of new gas export

plants as rules governing clean-energy incentives undercut

enthusiasm around the Inflation Reduction Act.

Permitting for pipelines to wind farms have all been

"equally daunting," said Colin Gruending, an executive vice

president at Enbridge ( ENB ), which transports fuels for refineries and

liquefied natural gas plants, and invests in solar and wind

farms.

"Policy is at bit of an intersection right now, given the

energy transition and uncertainties," he added.

The energy industry is facing "punitive executive orders,

punitive polities and punitive interpretations by agencies,"

said Toby Rice, CEO of top U.S natural gas producer EQT Corp ( EQT )

.

"Permit reform is the answer," he said.

The complaints have important allies in U.S. Senators Joe

Manchin and Daniel Sullivan, both if whom vowed to work on

legislation streamlining approvals for new infrastructure.

Manchin, a West Virginia Democrat, promised the legislation

addressing the industry's needs is at the top of his Senate

energy committee's agenda this year. "We want to get it done,"

he said.

Sullivan, a Republican of Alaska, agreed. "It is imperative

that we get it done and I do think there's the political will,"

he said.

U.S. Energy Secretary Jennifer Granholm and White House

climate advisor John Podesta said President Joe Biden's

administration is willing to advance permitting changes, but

blamed a lack of cooperation with legislators.

"We're doing what we can on the executive side," Granholm

said."

The Biden administration's pause on permit reviews for new

liquefied gas export plants was a punching bag for gas, pipeline

and energy trading executives.

Permitting reform is something they "desperately need", said

Michael Dunn, chief operating officer of pipeline operator

Williams Companies ( WMB ). "We cannot have this continue."

Executives regulatory uncertainty has hindered investment in

the oil and gas industry and encouraged global customers,

especially for liquefied natural gas, to seek supplies

elsewhere.

"There's potentially a view that there's an uncertain policy

for the long term and that inhibits or makes people take pause

on investments," said Corey Prologo, Trafigura's North America

Oil Trading chief. "There's less certainty around investment

decisions probably than there ever has been."

LNG buyers may sign deals with suppliers in Qatar, Australia

or Russia if the U.S. expansion is stalled.

"There are real world consequences happening right now. I

mean, Japan just signed a contract with Russia. So would they

have done that without this pause? I doubt it," said Mike

Sommers, president of energy trade group American Petroleum

Institute.

Asked about the LNG permitting pause, Secretary Granholm

said the reviews would be "long behind us" by this time next

year.

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