In 2018, the Interstate Natural Gas Association of America (INGAA) commissioned Dr. Jeff D. Makholm to file comments on the Federal Energy Regulatory Commission’s (FERC’s) re-examination of its 1999 Policy Statement on the Determination of Need. That FERC action heralded a highly competitive era for the US natural gas industry, encouraging new unconventional technology in natural gas extraction and competitive new pipeline links to connect such resources to US consumers.

Dr. Makholm had been involved in FERC proceedings in the 1990s leading up to the Policy Statement, and INGAA commissioned his statement to remind the FERC of the background, institutional economics, and highly useful results of its 1999 action. Dr. Makholm drew the following conclusions:

• Federal certification arose to assure the financing and creditworthiness of a crucial component of US infrastructure.
• With open access in the 1990s, certification became a critical element of the competitive US market for natural gas.
• That competitive US market spurred new technology, rapidly displaced coal-fired generation, and lowered the price of electricity.
• The interstate transport of natural gas is still driven by “downstream” public interest decisions governed by the states.
• Expanding the FERC’s role to manage natural gas use or GHG emissions would be counterproductive.

Ultimately, Dr. Makholm concluded:

[f]or the FERC to re-activate its earlier role in managing the US interstate gas industry—by including considerations of GHG [green-house gas] emissions or other matters of gas production and use—would both reintroduce the Commission into the planning and investment in the gas market that it spent so much effort to get out of (after its evident economic failures in such a role) and throw sand into the veritable clockwork that Congress and the FERC have constructed to permit the US gas industry to exhibit such useful competition.

The FERC remains deadlocked over possible permanent revisions to its Policy Statement. Reflecting the unsettled status of certification, one project (the Mountain Valley Pipeline) was folded, in a highly newsworthy fashion, into the Fiscal Responsibility Act of 2023.

The case was: In the Matter of the FERC Notice of Inquiry Regarding Certification of New Interstate Gas Facilities, Docket No. PL18-1-000.