FERC Just Rewrote the Rules for Natural Gas Infrastructure. Here’s What It Means.

Yesterday’s unanimous FERC vote is the most significant natural gas permitting reform in two decades — and its practical implications reach every segment of the industry.

On May 21, 2026, the Federal Energy Regulatory Commission voted unanimously — 5 to 0 — to propose the most sweeping overhaul of its natural gas blanket certificate program since the program was last substantially revised in 2006. The Notice of Proposed Rulemaking, issued as Docket No. RM25-12-001, would roughly double the cost thresholds that allow pipeline companies to build and modify infrastructure without seeking case-by-case FERC approval. It would also expand the categories of projects eligible for streamlined authorization and extend the blanket certificate framework toward LNG facilities for the first time.

For energy executives and general counsel across the oil and gas, midstream, LNG, and power sectors, this NOPR matters — not just as regulatory background, but as a direct driver of project timelines, capital deployment decisions, contract structures, and competitive positioning. Understanding what changed, what is still proposed, and what happens next is essential to acting on it.

What the Blanket Certificate Program Is — and Why It Matters

Under Section 7 of the Natural Gas Act, interstate natural gas pipelines generally need FERC authorization before they can construct, operate, or modify facilities. That process — a full certificate application, environmental review, public comment, and Commission order — can take years and cost millions in regulatory expenses, even for routine infrastructure upgrades.

The blanket certificate program, created in 1982, carves out an important exception. It allows pipeline companies to undertake a defined category of smaller projects — routine modifications, replacements, and certain new construction — without going through the full case-specific authorization process, as long as the project falls below specified cost thresholds. The thresholds have two tiers: automatic authorization, for the smallest projects, which requires no advance FERC review at all, and prior notice authorization, for somewhat larger projects, which requires notifying FERC and waiting a set period before proceeding unless the Commission intervenes.

The problem is that construction costs have risen sharply since the thresholds were last set. The automatic authorization limit of $14.5 million and the prior notice limit of $41.1 million reflect 2006 cost levels, adjusted only by a GDP deflator that has significantly undertracked actual construction cost inflation. Projects that should be routine — compressor station upgrades, meter replacements, short pipe segments — have been pushed outside the blanket certificate thresholds simply because their dollar value has grown with inflation, forcing companies into a full certificate process for work that is neither novel nor controversial.

What the NOPR Proposes

The May 21 NOPR proposes four principal changes. First, it would raise the automatic authorization cost limit from $14.5 million to $30 million — more than doubling it. Second, it would raise the prior notice cost limit from $41.1 million to $86 million. Third, it would expand the categories of projects eligible for blanket certificate treatment, specifically adding certain compressor station modifications and meter and regulating station work that currently require case-specific authorization regardless of cost. Fourth, it proposes extending blanket authorization procedures to certain activities at LNG facilities, a category that has historically been subject to full certificate review.

FERC Chairman Mark Christie framed the action explicitly around reliability: “New and expanded natural gas infrastructure is essential to help America avoid a grid reliability crisis.” The unanimous vote — a 5-0 result in a commission that has at times been divided on natural gas policy — signals broad institutional consensus that the current framework has become an obstacle to the infrastructure buildout the country needs.

The NOPR builds on a series of FERC actions over the past year that reflect the same direction. In June 2025, FERC issued a two-year temporary waiver raising the blanket certificate cost limits while the rulemaking was underway. In the same month, it waived its Order No. 871 policy — which had prohibited pipeline developers from beginning construction while rehearing requests were pending — through June 30, 2026, while pursuing permanent repeal. Yesterday’s NOPR is the next, more permanent step in that sequence.

What It Means for Your Business

Midstream and pipeline companies.

The most direct beneficiaries are interstate natural gas pipeline operators. Projects that currently require a full Section 7 certificate application — with the associated timeline, expense, and regulatory risk — may qualify for automatic or prior notice authorization once a final rule is in place. That compresses project timelines, reduces regulatory carrying costs, and lowers the barrier to executing routine capital programs. For companies with active integrity management, compression expansion, or system upgrade programs, the practical value of the NOPR is immediate and significant.

LNG developers and operators.

The extension of blanket authorization procedures to LNG facility activities is a meaningful development for a sector that has faced long and unpredictable permitting timelines. Even targeted blanket authorizations for discrete categories of LNG work — the approach FERC has signaled — would reduce regulatory friction for modifications and upgrades at existing LNG terminals. Given the global demand environment and the role U.S. LNG exports are playing in the post-Hormuz supply disruption, faster authorization for LNG infrastructure work has both commercial and geopolitical significance.

Upstream producers and industrial gas buyers.

For producers and large industrial customers who depend on pipeline takeaway capacity and system reliability, faster midstream infrastructure build-out means fewer bottlenecks and more predictable access to markets. The Permian and Appalachian basins in particular have experienced periods where production outpaced pipeline capacity; a regulatory environment that accelerates routine infrastructure upgrades helps close that gap. For industrial buyers — power generators, petrochemical facilities, manufacturers — a more nimble pipeline system supports supply reliability and potentially reduces basis differentials.

Contractors and oilfield services companies.

A regulatory framework that speeds pipeline infrastructure decisions translates directly into work. Compression services, pipeline construction, metering and regulation work, and LNG facility modifications are all categories that stand to see accelerated capital deployment if the NOPR is finalized in something close to its proposed form. The OOOOb flaring rules discussed in last week’s post are already pushing midstream companies to expand gas capture and gathering capacity; a streamlined permitting environment for the infrastructure required to do that work compounds the demand signal.

What Happens Next — and What to Watch

The NOPR is a proposed rule, not a final one. FERC will accept public comments — from pipeline companies, environmental groups, landowners, ratepayer advocates, and state regulators — before issuing a final rule. The comment process typically takes several months, and the final rule may differ from the proposal in ways that matter for specific project types or geographies.

In the meantime, the June 2025 temporary waiver raising the cost limits is still in effect, providing immediate practical relief while the NOPR proceeds. Companies planning projects that fall between the current permanent thresholds and the proposed new ones should evaluate whether those projects qualify under the temporary waiver before it expires or is replaced by a final rule.

Three issues are likely to generate the most substantive comment and potential modification in the final rule. Environmental review requirements for projects that move from full certificate to blanket authorization will be contested by environmental groups who argue that streamlining permitting reduces NEPA scrutiny. Landowner protections for prior notice projects — particularly eminent domain rights — will be closely watched by agricultural and property rights interests. And the rate treatment of blanket certificate projects, which the NOPR also proposes to adjust, will draw comment from industrial customers and state commissions focused on cost allocation.

For general counsel at pipeline, LNG, and upstream companies, the comment period is not a passive exercise. Companies with significant capital programs that would benefit from the expanded blanket thresholds have a direct financial interest in the final rule being robust and durable. Detailed, well-documented comments — particularly those that quantify the cost and schedule impact of the current thresholds on specific project types — carry meaningful weight in FERC rulemakings.

The Bigger Picture

Yesterday’s FERC action is part of a broader regulatory reset that has been building since early 2025. FERC has moved to repeal Order 871, raise blanket certificate thresholds on a temporary basis, explore blanket authorizations for LNG and hydroelectric projects, and now propose a permanent overhaul of the program. The direction is consistent and the votes have been unanimous. The regulatory environment for natural gas infrastructure is becoming materially more favorable than it was 18 months ago.

The Strait of Hormuz disruption has accelerated that shift by making energy security a more urgent political and policy priority. A FERC that might otherwise have moved incrementally has instead moved decisively. Whether that momentum survives the comment process, potential litigation from environmental challengers, and future Commission composition changes is uncertain. What is certain is that the window for faster infrastructure development — and for companies positioned to execute in that environment — is open right now.