Regulatory Strategy and Governmental Policy

In the US, for example, LNG projects are subject to various laws and regulations that are administered by the Federal Energy Regulatory Commission (FERC), the Coast Guard, the Army Corps of Engineers and the States. While the Energy Policy Act of 2005 affirmed FERC's authority to site LNG terminals, States can effectively block an LNG project by denying permits associated with the Clean Water Act, the Coastal Zone Management Act, and the Clean Air Act.

In other words, the FERC has exclusive authority under the Energy Policy Act to authorize siting of LNG facilities for both import and export; however, authorization is conditioned on an applicant's satisfaction of other statutory requirements beyond the scope of FERC's jurisdiction.

For example, under the Coastal Zone Management Act, an LNG project sponsor must certify that the proposed activity in a designated coastal zone complies with the enforceable policies of the affected state's coastal zone management program. If the state does not concur with the certification, no FERC approval to construct may be granted. Also, under the Clean Water Act, certification of compliance with the state's water quality standards is required from the responsible state agency for any activity (including construction and operation of LNG import facilities) that may result in a discharge into navigable waters. If the certification is denied, the LNG facility cannot be constructed.

ZECG principals and executive consultants bring decades of practice experience in regulatory affairs dating back long before deregulation of the natural gas industry and globalization of the gas trade. Experience ranges from rates and cost-of-service studies prepared in connection with contested regulatory proceedings, filings with provincial, state and federal agencies and expert testimony, on the one hand, to client assistance in developing sound, comprehensive regulatory strategies that integrate optimally with corporate business plans on the other.