On September 12, 2025, the Federal Energy Regulatory Commission (FERC) terminated the proceeding in which it issued an updated policy statement that explained how FERC’s approach to considering applications to construct new interstate natural gas transportation facilities under Section 7 of the Natural Gas Act (Updated Certificate Policy Statement) would differ from the approach described in a policy statement issued in 1999 (1999 Certificate Policy Statement).
This order was issued just three days after the close of the comment period on US Secretary of Energy’s proposal to terminate the Updated Certificate Policy Statement proceeding and rescind the Updated Certificate Policy Statement.
Background
The 1999 Certificate Policy Statement addressed how FERC would consider applications to construct new interstate transportation facilities. Under the 1999 Certificate Policy Statement, FERC would first determine if a threshold requirement of no financial subsidization from existing customers was met. If this threshold requirement was met, FERC would consider whether the applicant eliminated or minimized any residual adverse effects the project may have on the applicant's existing customers, existing pipelines in the market and their captive customers, and landowners and communities affected by the proposed project. Any residual adverse effects would be balanced against the anticipated benefits from the project. If FERC found that the project benefits outweighed the adverse impacts on economic interests, FERC would proceed and consider the environmental impacts of the project.
Following the issuance of the 1999 Certificate Policy Statement, the natural gas industry experienced significant changes, including changes in the demand for natural gas, the availability of supply of natural gas, and the manner in which natural gas is contracted. In addition, landowners and communities have expressed greater interest and participation in natural gas project proceedings. FERC’s consideration of climate change and greenhouse gas emissions also evolved.
In 2018 and again in 2021, FERC issued Notices of Inquiry to explore potential updates to this framework. FERC sought input on areas including the below:
- The reliance on precedent agreements to demonstrate need for a proposed project
- The potential exercise of eminent domain and landowner interests
- FERC’s evaluation of alternatives and environmental effects under the National Environmental Policy Act and the Natural Gas Act
- The efficiency and effectiveness of FERC’s certificate processes
- FERC’s identification and addressing of any disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on environmental justice communities and the mitigation of those adverse impacts and burdens
Thousands of comments were submitted by stakeholders in response to the two Notices of Inquiry. This led to the issuance of the Updated Certificate Policy Statement in February 2022, which was subsequently made into a draft policy statement that was subject to further comment and was not applicable to pending applications.
On August 21, 2025, the secretary of energy proposed to FERC a statement of policy of general applicability to rescind the draft Updated Certificate Policy Statement.
FERC’s Order Terminating the Updated Certificate Policy Statement Proceeding
Following review of the comments submitted in the Updated Certificate Policy Statement proceeding and the comments submitted in response to the Secretary of Energy’s proposal, FERC concluded that the topics addressed in the proceeding are better considered on a case-by-case basis, considering the facts and issues raised in each certificate proceeding, as FERC has done since it issued the draft Updated Certificate Policy Statement in 2022. FERC found that the 1999 Certificate Policy Statement “continues to provide the appropriate framework for reviewing proposed natural gas projects in a legally durable manner, pursuant to the Natural Gas Act and consistent with judicial precedent, as it has for over 25 years.”
FERC’s withdrawal of the draft Updated Certificate Policy Statement and termination of the proceeding aligns with executive orders issued by the current US administration and efforts to streamline the permitting process. Maintaining the 1999 Certificate Policy Statement is expected to provide a more predictable pipeline permitting process and timeline and facilitate continued project development to meet growing demand for electricity, including by large industrial consumers such as data centers.