H.R. 3668, Improving Interagency Coordination for Pipeline Reviews Act

H.R. 3668 would specify timeframes and procedures for the Federal Energy Regulatory Commission (FERC) and other affected agencies to follow when conducting environmental reviews of natural gas pipelines. In particular, the bill would exempt interstate natural gas pipeline projects from the requirement to obtain water quality certifications from states under section 401 of the Clean Water Act. Instead, affected states would coordinate with FERC on water quality issues as part of the environmental review process.

Under the Natural Gas Act, FERC is the lead federal agency involved in approving and regulating interstate pipelines that carry natural gas. Such projects are subject to a variety of federal and nonfederal permits and authorizations related to a range of issues, particularly environmental matters. Under current law, FERC coordinates those efforts and is ultimately responsible for granting the certificate of public convenience and necessity required to construct or expand interstate natural gas pipelines.

CBO expects that implementing H.R. 3668 could streamline the permitting process and as a result accelerate the production of natural gas on federal lands. Because CBO does not expect that the changes under the bill would significantly affect the time needed to construct natural gas pipelines and related infrastructure, CBO estimates that any increases in offsetting receipts from royalty payments from increased natural gas production (which are recorded in the budget as reductions in direct spending) would total less than $500,000 over the 2026-2035 period.

Using information from FERC and other federal agencies that regulate aspects of interstate natural gas pipelines, CBO estimates that implementing the bill would have no significant net effect on spending subject to appropriation. The bill would not significantly affect the scope of federal agencies’ responsibilities in overseeing such pipelines, and CBO expects that meeting the timeframes specified in the bill would not require a significant change in the level of discretionary funding provided to those agencies. Further, because FERC is authorized to collect fees to recover its costs (which are controlled through annual appropriation acts), CBO estimates that net costs for FERC would be negligible.

If FERC increases their fees to offset the costs of implementing the bill, H.R. 3668 would increase the cost of an existing mandate on public and private entities, such as electric utilities, that are required to pay those fees. CBO estimates that the additional amounts collected would be small and fall well below the thresholds established in the Unfunded Mandates Reform Act for intergovernmental and private-sector mandates ($103 million and $206 million in 2025, respectively, adjusted annually for inflation).

The CBO staff contacts for this estimate are Aaron Krupkin (for the Federal Energy Regulatory Commission), Lilia Ledezma (for onshore gas), and Brandon Lever (for mandates). The estimate was reviewed by H. Samuel Papenfuss, Deputy Director of Budget Analysis.