Energy Law

Oregon Challenge to Conditional Licensing Could Have Broad Impacts for Project Developers

By Andrew McLain

On January 27, the Oregon Attorney General (AG) filed a petition for review in the US Court of Appeals for the Ninth Circuit challenging FERC's conditional approval of the proposed Bradwood Landing LNG facility. Although briefs have not yet been filed, it appears that this appeal will present an issue of first impression concerning FERC's conditional licensing of projects that have not yet completed all necessary environmental reviews. According to the Oregon AG's notice of appeal, the state challenges FERC's authority to conditionally license projects prior to issuances of water quality permits under 33 U.S.C § l341(a), a coastal consistency determination under 16 U.S.C. § 1456(c)(3)(A), and air quality permits under 42 U.S.C. § 7506(c)(l). It also questions FERC's authority to conditionally approve projects prior to completion of the consultation requirement under Endangered Species Act.

FERC's use of conditional licensing has been touted as a regulatory innovation that has become increasingly commonplace in FERC's certificate authorizations. The Oregon AG's challenge to the practice implicates FERC's conditional permit policy as a whole, and, perhaps most significantly, FERC staff's recent policy statement on hydrokinetics. The petition also raises the possibility that FERC's conditional permit practice could be revised or scrapped entirely. If this happens, project developers before FERC could be faced with significantly lengthier permitting timelines and attendant uncertainties.

Full post as published by Energy Legal Blog on February 02, 2009 (boomark / email).