Glick Renomination, Policies Become Converging Controversies
Washington, July 13, 2022
By: Stephen Barlas, Contributing Editor, Washington, D.C.
Some key decisions about federal pipeline regulation are coming to a head as the comment period for the Federal Energy Regulatory Commission’s (FERC) two draft policy statements closed and the Senate decides whether to renew Richard Glick’s chairmanship at FERC.
President Joe Biden announced May 20 that he wants to reappoint Glick, who has led agency efforts to adopt the two draft statements that, for the most part, are strongly opposed by interstate pipeline companies as exceeding current federal law.
Sen. Joe Manchin (D-W. Va.), chairman of the Senate Energy Committee, scolded Glick in hearings this year for the FERC’s insistence on conditioning pipeline approvals on an expanded analysis of greenhouse gas (GHG) emissions.
The Senate will have to approve the renomination of Glick (whose term expired June 30, prior to press deadlines, but can continue to serve through the end of the year) as chairman. In a 50-50 divided Senate, with at least Manchin potentially joining all Republicans in opposition, a rejection would send a clear message to the two other Democratic commissioners at FERC to tread very carefully in expanding Natural Gas Act (NGA) authorities without congressional approval.
Democratic opposition to FERC’s anti-pipeline drift also exists in the House. Rep. Michael Burgess (R-TX), the number two Republican on the House Energy and Commerce’s energy subcommittee, put forward a letter to FERC signed by 18 House members, five of whom are Democrats, saying “the two new policy statements issued on February 18, 2022, only added significant uncertainty to the durability of FERC’s certificate policy review framework.”
The House Energy and Commerce Committee would be the venue for legislation pulling the reins in on FERC, if it heads in the direction Glick is leading it.
FERC’s draft policy statements deal with revisions to the commission’s 1999 pipeline certificate approval process and the extent to which GHG emissions can be determined to be a “significant” danger to the public. It establishes a threshold of 100,000 tons per year (tpy) of carbon dioxide equivalent (CO2e) for finding a significant impact under the National Environmental Policy Act (NEPA).
Glick appears to know he is walking a fine line politically. On May 19, he voted to approve Kern River’s Delta Lateral project, despite pleas from the Environmental Protection Agency to look more closely at whether the project’s upstream and downstream GHG emissions would be significant, which would trigger additional actions under the NEPA.
The Delta Lateral will be an approximately 36-mile (58-km), 24-inch pipeline from Opal, Wyoming, to the Intermountain Power Project (IPP), an electrical generating facility in Delta, Utah.
In voting to approve the project and rejecting the EPA demands, Glick pointed out the project would result in a substantial net decrease in downstream GHG emissions due to Intermountain Power Agency’s replacement of coal-fired generation with gas-fired generation.
He said there was no need to do further analysis on the possibility of significant GHG emissions because “common sense” dictated those emissions were not significant.
One attorney in Washington, D.C., who works with pipeline companies said, “There is little doubt Glick knows the score politically and will be wary of doing anything that would stir up the opposition, especially from Manchin.”
Glick’s future may depend on the shape of the final form of the pipeline certificate and GHG policy statements. If the Senate appears to be ready to reconfirm him, hearings would probably be held in the fall. Those hearings would likely coincide with further FERC action on the policy statements, which could ignite controversy or even douse any political fires, if Glick backs off.
The pipeline industry clearly envisions a role for Congress if FERC strays from its authority under the NGA. Glick feels recent federal appeals court decisions give him the authority to establish new, anti-pipeline policies that conform to the NGA. Pipeline companies almost unanimously disagree.
“The Draft GHG Statement also claims authority for the Commission to deny an NGA section 7 application due to a project’s upstream and downstream GHG emissions being contrary to the ‘public interest’,” said Anne E. Bomar, senior vice president and general counsel, BHE GT&S, LLC. “There is no basis in the text of the NGA or case law for this authority.”
BHE, Enbridge, Kinder Morgan and most of the big players in the interstate pipeline industry argue that the FERC-proposed changes are illegal, and the process for vetting them has been incomplete.
“Multiple aspects of the Draft Policy Statements are unsupported by record evidence and lack an adequate Commission explanation demonstrating that they are the product of reasoned decision making,” wrote William E. Wolf, vice president and deputy general counsel, Kinder Morgan. “These failings render the Draft Policy Statements in their current form arbitrary and capricious and contrary to law.”
However, some major pipeline companies support a few aspects of at least the proposed certificate policy changes.
Stephen Hatridge, vice president and assistant general counsel at The Williams Companies, told FERC, “While Williams has concerns with certain aspects of the draft Policy Statements, we do not want to overlook those areas in which we agree, at least conceptually, with the Commission’s policy objectives.”
He cited, with respect to the certificate draft, the commitment to conduct a more expansive analysis of landowner impacts and the need to fully consider and protect the interests of environmental justice communities.
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