Washington (Platts)--31Jan2008

The chairman of the US Federal Energy Regulatory Commission on Thursday
urged Congress not to strip states of the authority to site carbon dioxide
pipelines as lawmakers consider possible changes to the regulatory scheme that
governs the infrastructure.

Testifying before a Senate Energy and Natural Resources Committee hearing
to explore carbon capture, transportation and sequestration regulations,
FERC Chairman Joseph Kelliher said the current system keeps federal regulators
at arms length, and appropriately so.

Congress could create a regulatory system for C02 pipelines that mirrors
that for natural gas pipelines, but Kelliher said there is little evidence to
suggest Congress needs to grant FERC the same exclusive and pre-emptive siting
authority it has for gas infrastructure to compel the development of
interstate carbon pipelines.

"The precondition that led Congress to such a course for siting natural
gas pipelines -- the failure of state siting -- does not exist here," Kelliher
said in prepared testimony.

Further, Kelliher discouraged Congress from changing the Department of
Transportation's role as the pipeline safety regulator. DOT's Pipeline and
Hazardous Materials Safety Administration shares oversight of CO2 pipelines
with states. Together, they oversee roughly 4,000 miles of existing pipelines.

The agency has "extensive experience managing the risks of compressed
CO2," Krista Edwards, deputy administrator of PHMSA, told the panel.

Kelliher said, however, that FERC should have a role in helping Congress
examine the regulatory options and potential barriers to the development of a
vast carbon pipeline network to transport power plant emissions.

A number of bills have been introduced to study the feasibility and
regulation of carbon pipelines as Congress considers capping greenhouse gas
emissions tied to global warming.

Senator Norm Coleman, a Minnesota Republican, has introduced legislation
that would direct FERC and DOT, along with the Environmental Protection Agency
and the Departments of Energy and Interior, to study the feasibility of
developing such an interstate transportation network tied to carbon
sequestration facilities.

Another bill, which Massachusetts Democrat John Kerry sponsored, would
create an interagency task force, headed by the EPA, to develop regulations in
the areas of carbon transportation, storage and sequestration.

--Joel Kirkland, joel_kirkland@platts.com