Month: February 2019

Federal Energy Regulatory Commission (FERC) Chairman Neil Chatterjee testified before the Senate Energy & Natural Resources Committee

On February 14, the Federal Energy Regulatory Commission (FERC) Chairman Neil Chatterjee testified before the Senate Energy & Natural Resources Committee to discuss cybersecurity in the energy industry. Chatterjee had three specific points to bring up in his testimony: “first, the evolution of mandatory reliability standards; second, the voluntary partnerships FERC has established with industry and other agencies; and third, the interdependency of the electric and natural gas systems.”

For the mandatory reliability standards, Chatterjee discussed the ruling under the Federal Power Act that gave FERC “authority to approve mandatory reliability standards developed by the North American Electric Reliability Corporation (NERC).” After these are approved, they become mandatory and either NERC or FERC enforces them. “NERC’s standards for cybersecurity, known as the Critical Infrastructure Protection (CIP) standards, became mandatory and enforceable in 2009.”

In the last ten years, “the CIP standards have matured considerably and now form an effective framework for protections against cyber threats,” Chatterjee said. As a result of the standards maturing, “the need for constant revisions to address discrete issues and, instead, has allowed both FERC and NERC to focus on tackling emerging threats.” Chatterjee brought up two recent actions that FERC has taken in regard to this. “First, at our October 2018 Commission Meeting, FERC approved NERC’s proposed reliability standards to address supply chain threats. This action is particularly significant given that these specific threats to the energy sector continue to grow. Second, at our July 2018 Commission Meeting, FERC approved a final rule directing NERC to expand reporting requirements for critical systems.”

Chatterjee said the final ruling “directed NERC to develop a standard that requires registered entities to report successful and attempted intrusions into critical systems to NERC’s Electricity Information Sharing and Analysis Center, as well as to the Department of Homeland Security.” The Chairman said this was “an important step toward enhancing the collection and distribution of information on rapidly evolving threats.”

As for voluntary partnerships, Chatterjee said that even though the CIP standards are an “important baseline for cybersecurity practices,” merely complying “is not enough to achieve cybersecurity excellence.” FERC has developed “two-prong approach to address threats to energy infrastructure: mandatory reliability standards overseen by our Office of Electric Reliability, and voluntary initiatives overseen by our Office of Energy Infrastructure Security (OEIS).” OEIS works with partners in state and federal agencies as well as those in the industry “to develop and promote best practices for critical infrastructure security. These initiatives include … voluntary architecture assessments of interested entities, classified briefings for state and industry officials, and joint security programs with other government agencies and industry.”

Chatterjee wants to continue strengthening those partnerships, and in the spirit of that, FERC is holding a joint technical conference with the Department of Energy on March 28. “The conference will explore current threats against energy infrastructure, best practices for mitigation, current incentives for investing in physical and cybersecurity protections, and cost recovery practices at both the state and federal level.”

As for the interdependency of the electric and natural gas systems, Chatterjee expressed his concerns that “because of our nation’s growing use of natural gas for power generation, a successful cyberattack on the natural gas pipeline system could have a significant impact on the electric grid.”

“I recently met with TSA Administrator David Pekoske to discuss pipeline cybersecurity and was impressed by his focus on this vital issue as well as his pledge to taking further action to improve TSA’s oversight of pipeline security. While I think both industry and government have made significant strides toward addressing this issue, I believe more work still needs to be done, and the Commission stands ready to assist in these efforts.”

A full video of Chatterjee’s testimony can be viewed here.

FERC’s Energy Infrastructure Update for December 2018

On February 4, the Federal Energy Regulatory Commission (FERC) released its Energy Infrastructure Update for December 2018, which gives the highlights of changes and expansions in the industry.

For natural gas pipelines, five were placed in service, two were certified, and six more were proposed; there were no updates in December for storage facilities or liquified natural gas (LNG) imports of exports. The total number of pipeline projects placed into service in 2018 was 26, which is lower than the 32 in 2017. There were 48 certified in both 2017 and 2018. No storage facilities were placed into service in 2018, and only one was in 2017. There were four storage facilities certified in 2018, compared to only two in 2017. One LNG export was placed into service, compared to three in 2017. There was one import/export facility certified in 2018, and there were none in 2017.

For hydropower, one capacity amendment was filed in December, and another hydropower facility was licensed. In 2018, two facilities files for 10-MW Exemption and three filed for capacity amendments. Only one license was issued last year, and one capacity amendment was issued. Two licenses were placed in service in 2018.

In December, no new coal facilities were put into service, and only four were put in service in 2018; three were put in service in 2017. Seven new natural gas facilities were put in service, and 103 were opened in 2018; this is compared to the 106 put in service in 2017. No nuclear facilities opened in December, but five opened last year; only one opened in 2017. No oil facilities opened in December either, but 14 opened in 2018, compared to the 37 opened in 2017. No hydropower facilities opened either, but 10 opened in 2018; 14 opened in 2017. Twelve wind power facilities opened in December, 55 opened in 2018; 83 opened in 2017. No biomass facilities opened in December, but 13 opened last year; 27 opened in 2017. Two geothermal steam facilities opened, half of the four that opened last year; only two opened in 2017. There were 15 solar facilities opened in December, and 429 total in 2018; in 2017 750 opened.

There were a number of suggestions for additions and retirements to take place by January 2022. One coal addition was suggested, and 57 retirements. For natural gas, 276 additions were suggested and only 94 retirements. There were 11 additions suggested for nuclear power, and nine retirements. Seventeen oil additions and 24 retirements were suggested. For hydropower, 237 additions and 20 retirements were suggested. There were 530 wind additions and no retirements suggested. There were 53 biomass additions and 29 retirements recommended. For geothermal steam, 19 additions and no retirements were suggested. Solar power saw the largest recommended additions with 2,278 and only five retirements.

In December, 20.2 miles of electric transmission projects of less than 230 volts were completed, compared to 54 miles of in December 2017. That same voltage has 327.3 miles in all of 2018, compared to 329.3 in 2017. For voltages of 345, there were 161.8 miles completed in December, compared to 32.5 miles in December 2017. In all of 2018, 714.5 miles were completed, compared to 363.1 miles in 2017. For 500 voltage, there was none in December, only 69.4 miles in 2018; there were no miles completed in 2018. In total, 182 miles were completed in December, compared to 86.5 miles in December 2017. In all of 2018, a total of 1,111.2 miles completed; 692.4 miles were completed in 2017.

FERC’s Final Statement for the Driftwood LNG Project

On January 18, Federal Energy Regulatory Commission (FERC) issued their final Environmental Impact Statement for the Driftwood LNG Project. The Driftwood Project requested authorization “construct and operate liquefied natural gas (LNG) export facilities and certain interstate, natural gas transmission pipeline facilities in Evangeline, Acadia, Jefferson Davis, and Calcasieu Parishes, Louisiana.”

There are two main parts to the Driftwood Project:

“The construction and operation of the LNG Facility, which includes five LNG plant facilities to liquefy natural gas, three tanks to store the LNG, LNG carrier loading/berthing facilities (Marine Facility), and other appurtenant facilities at a site near Carlyss, Calcasieu Parish, Louisiana”
“The construction and operation of about 96 miles of pipeline, three new compressor stations, and 15 new meter stations.

They anticipate the Driftwood Project will produce approximately “27.6 million tonnes per annum of LNG for export.”

FERC determined the Driftwood Project will have significant adverse effects on the environment. “However, they would be reduced to less than significant levels with the implementation of Driftwood’s proposed impact avoidance, minimization, and mitigation measures and the additional measures recommended by staff.” FERC reached these conclusions through “information provided by Driftwood and through data requests; field investigations; literature research; geospatial analysis; alternatives analysis; public comments and scoping sessions; and coordination with federal, state, and local agencies and Indian Tribes.”

“The following factors were also considered in our conclusions:

The LNG Facility site would be in an area currently zoned for heavy industrial use, which is consistent with other industrial facilities along the Calcasieu Ship Channel.
The Pipeline would parallel or be collocated with other disturbed right-of-way corridors (with pipelines or utilities) for about 68 miles (about 71 percent of the route).
Driftwood would construct the Project using a number of Project-specific plans designed to minimize impacts. These include: Construction Environmental Control Plan; Driftwood Upland Erosion Control, Revegetation, and Maintenance Plan and Wetland and Waterbody Construction and Mitigation Procedures; construction Spill Prevention, Control, and Countermeasures (SPCC) Plan; Unanticipated Discoveries Plan; Horizontal Directional Drill Plans; Erosion and Sedimentation Control Plan; and Fugitive Dust Management Plan. Driftwood would also develop and implement an operations SPCC Plan.
The U.S. Coast Guard issued a Letter of Recommendation indicating the Calcasieu Ship Channel would be considered suitable for the LNG marine traffic associated with the Project.
The LNG Facility design would include acceptable layers of protection or safeguards that would reduce the risk of a potentially hazardous scenario from developing into an event that could impact the offsite public.
The Pipeline and associated aboveground facilities would be constructed, operated, and maintained in compliance with Department of Transportation standards published in 49 CFR 192.FERC staff would complete consultations with resource agencies to ensure compliance with Section 7 of the Endangered Species Act; and Section 106 of the National Historic Preservation Act.
Driftwood would follow an environmental inspection program, including Environmental Inspectors, to ensure compliance with the mitigation measures that become conditions of the FERC authorization. FERC staff would conduct inspections throughout construction, commissioning, and restoration of the Project.”

“FERC staff would complete consultations with resource agencies to ensure compliance with:

Section 7 of the Endangered Species Act; and
Section 106 of the National Historic Preservation Act.”

FERC also came up with some recommendations for Driftwood to implement in order for them to reduce the impact even further. These recommendations include “that Driftwood should implement specific to engineering, vulnerability, and detailed design of the LNG Facility, and ongoing recommendations relating to inspections, reporting, notification, and non-scheduled events that would apply throughout the life of the LNG Facility.”