S3324

The "FERC Greenhouse Gas and Environmental Justice Policy Act of 2025" (S.3324) is a direct legislative action to confirm and clarify the Federal Energy Regulatory Commission's (FERC) obligation to assess and mitigate the impacts of climate change and environmental justice communities from projects approved under the Natural Gas Act. This bill amends Section 7 of the Natural Gas Act (15 U.S.C. 717f) to explicitly require FERC to determine if environmental effects, including those on environmental justice communities, are significant and can be mitigated, and if these effects outweigh project benefits. It also mandates the quantification of reasonably foreseeable greenhouse gas emissions. This significantly elevates environmental and social considerations in the project approval process, making it harder and more expensive to build new natural gas infrastructure. The money trail indicates increased costs for natural gas producers and midstream companies. Projects will face longer approval timelines, higher legal and environmental consulting fees, and potentially more stringent mitigation requirements, including carbon capture or offset programs. This shifts financial burdens directly onto project developers. There is no direct appropriation of funds in this bill; rather, it imposes new regulatory requirements that act as a de facto tax on project development in the natural gas sector. Historically, increased environmental scrutiny on energy infrastructure projects has led to project delays and cancellations. For example, the cancellation of the Keystone XL pipeline in 2021, while not directly due to FERC, demonstrated the impact of heightened environmental policy on large-scale energy projects. While direct market data for a FERC-specific legislative change is limited, similar regulatory tightening under the Obama administration saw a slowdown in new pipeline approvals, impacting midstream companies. The uncertainty and increased costs associated with such regulatory changes typically lead to a decrease in investment in the affected sector. Specific companies that stand to lose include major natural gas producers and midstream operators. EQT Corporation ($EQT), as the largest natural gas producer in the U.S., will face increased regulatory hurdles for new drilling and takeaway capacity. Midstream companies like Kinder Morgan ($KMI), Energy Transfer ($ET), Williams Companies ($WMB), Enbridge ($ENB), and TC Energy ($TRP), which develop and operate natural gas pipelines and LNG export facilities, will experience significant delays and increased costs for new projects. This will compress margins and reduce the likelihood of new project approvals, impacting their growth prospects. The bill is currently in the Senate Committee on Energy and Natural Resources. Its passage would require a vote in both chambers and presidential assent. Given the Democratic sponsorship and the current political climate, there is a moderate likelihood of progression, especially if it gains traction in the committee. This bill is currently in the Senate Committee on Energy and Natural Resources. Its progression depends on committee action and subsequent votes in the Senate and House. If passed, it would immediately alter FERC's project review process, leading to a more challenging environment for new natural gas infrastructure. The timeline for implementation would be immediate upon enactment, with FERC then needing to update its guidance and procedures.