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Legislators

Federal Pipeline Provision Sparks Concerns Over State and Local Control

Strategic Insights

— 2 min read

A provision in the House Energy and Commerce Committee's reconciliation instructions has raised eyebrows among lawmakers and advocates on both the right and left, as critics argue it would allow federal regulators to approve natural gas and carbon dioxide pipelines over prohibitions in state law. The measure would grant the Federal Energy Regulatory Commission (FERC) exclusive authority to issue licenses for pipelines carrying natural gas, carbon dioxide, hydrogen, oil, or other energy products and byproducts, potentially overriding state laws.

The provision would allow pipeline operators to pay $10 million to participate in an expedited federal permitting process, which critics say would bypass state and local protections. Environmental groups, landholder advocates, and small-government conservatives have expressed concerns that the measure would open the door for the federal government to nullify state and local laws, including a recent South Dakota law to prevent pipeline operators from using eminent domain to force landowners to sell or allow use of their property.

"This is federal overreach," said South Dakota state Rep. Karla Lems. "It would override any state or local law regarding ... the routing of a pipeline." A coalition of 70 environmental and conservation groups signed a letter to the committee urging the language be removed, citing concerns over expanded federal jurisdiction over pipelines, limited public input, and environmental review timelines.

Key Takeaways:

  • The provision in the House Energy and Commerce Committee's reconciliation instructions would grant FERC exclusive authority to issue licenses for pipelines, potentially overriding state laws.
  • Pipeline operators would be allowed to pay $10 million to participate in an expedited federal permitting process, bypassing state and local protections.
  • Environmental groups, landholder advocates, and small-government conservatives have expressed concerns over the provision's impact on state and local control.
  • The provision would apply to states only in cases when state agencies are responsible for conducting federal reviews.
  • A recent South Dakota law to prevent pipeline operators from using eminent domain would be overridden by the provision.

Statistics:

  • 70 environmental and conservation groups signed a letter to the committee urging the language be removed.
  • The provision would allow pipeline operators to pay $10 million to participate in an expedited federal permitting process.
  • 11 House panels have approved reconciliation instructions, with the Energy and Commerce Committee's provision being one of them.
  • The complex budget reconciliation process allows the majority party to pass legislation with simple majorities in both chambers, avoiding the U.S. Senate's usual 60-vote requirement.
  • The provision is part of the "one big, beautiful bill" package, which includes President Donald Trump's domestic policy priorities.

Sources:

  • https://d1dth6e84htgma.cloudfront.net/Subtitle_A_Energy_b4a678c0f2.pdf
  • https://www.newsfromthestates.com/article/us-house-panel-passes-gop-plan-cuts-medicaid-625b-adds-work-requirement
  • https://d1dth6e84htgma.cloudfront.net/05_13_2025_FCMU_Memorandum_UPDATED_55a74a132a.pdf
  • https://drive.google.com/file/d/19_BDl_zEEttlt4rh3wOEzmJT1YNKncyR/view
  • https://x.com/SpeakerHansen/status/1922622938538541395
  • https://x.com/GovRonDeSantis/status/1922632885154025935

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