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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--For the first time in over four years, the Federal Energy Regulatory Commission (FERC) (Washington, D.C.), an important regulator of the nation's energy infrastructure, has its full quorum of five commissioners. In mid-November, the U.S. Senate unanimously confirmed Willie Phillips as the fifth FERC commissioner. Prior to being confirmed, Phillips had been chairman of the D.C. Public Service Commission (Washington, D.C.).
The panel now has a 3-2 Democratic majority, which may lead to heightened scrutiny of proposed projects that fall under the agency's purview, including interstate natural gas pipelines, LNG terminals, interstate electric transmission projects and the sale of wholesale power in bulk markets. President Joe Biden has vowed to cut U.S. greenhouse gas emissions by around 50% by 2030, and put the nation's economy on a path to fully decarbonize by 2050.
There are about 426 active U.S. Oil & Gas Pipeline projects valued at around $33.45 billion that are scheduled to begin construction between January 2020 and December 2022, according to Industrial Info Resources' Global Market Intelligence (GMI) platform. Not all of those projects are jurisdictional at FERC. Generally, that agency has no say over projects that remain within a single state. But once a pipeline project, or a proposed transmission project, crosses state boundaries, it is FERC jurisdictional.
Industrial Info's GMI platform also is tracking 68 pipeline projects that are scheduled to kick off construction between January 2020 and December 2022, but that are on hold. The value of those projects is about $10.2 billion. Developers give a variety of reasons for placing a project on hold, but an uncertain, or even a perceived hostile, regulatory environment certainly could qualify as a reason a project has become stalled. Whether it would make sense for developers to try to move these projects forward while Democrats have a majority on the panel is unclear. Again, as with the active projects, some of these on-hold projects would not be FERC-jurisdictional because they are contained within the borders of a single state.
Proposed umbrella pipeline projects that cross state boundaries, including the West Header project and the Market Hub Services & Pipeline Expansion, may draw extra FERC scrutiny given the administration's focus on decarbonizing. A Democrat-majority panel may be reluctant to green-light a long-lived infrastructure asset like a gas pipeline because it would lock in decades of gas use and potential methane emissions, contributing to global climate change.
As well, the body is actively considering whether its mandate in law could extend to performing greenhouse gas analyses of proposed projects that are jurisdictional and which emit greenhouse gases. That issue has bitterly split the commission in recent years, but because the panel lacked its full complement of commissioners, those issues were not decided.
Courts, notably the U.S. Court of Appeals for the District of Columbia Circuit, have criticized FERC and sent several cases back for reconsideration because the judges felt the commission did an inadequate job of assessing how emissions from proposed energy infrastructure projects could affect the climate.
Several proposed gas pipelines, notably the multibillion-dollar proposed Atlantic Coast Pipeline, have been abandoned after years of delay and regulatory opposition. For more on that, see July 7, 2020, article --Dominion Energy Strategically Repositions After Terminating Atlantic Coast Pipeline Project. Also, see July 8, 2020, article - Federal Judges Deal Two Defeats to Trump Administration's Vision of Energy Dominance and June 11, 2021, article - Keystone XL Pipeline Termination: Not the First or the Last Project to Fall.
The current 3-2 Democratic majority may tip the scales in favor of greater FERC scrutiny of hydrocarbon infrastructure, though almost no one expects Phillips to be a rubber stamp against hydrocarbon projects or in favor of renewable energy projects.
In congressional testimony, Phillips reportedly said, "I believe that climate change is real. I believe that we have a moral and ethical obligation to address it. We have to have balance in our approach." He said he would try to seek "balance" between reliability, affordability and sustainability.
Following FERC's November 18 meeting, FERC Chairman Rich Glick told reporters it was "not realistic" to assume the panel would vote 3-2 on every issue, along party lines.
Proposed interstate power transmission projects and LNG export terminals also may draw heightened FERC scrutiny with the Democrats in the majority. And a delay or adverse decision by FERC on those projects could have spillover effects on other energy projects. For example, if FERC rejects a proposed LNG export terminal, gas pipelines that were being developed to bring gas to that terminal would not be needed. And if the agency defers or rejects an interstate transmission project, developers of electric generation that planned to use that line might have to find new alternatives to that line.
IIR was unable to schedule an interview with Phillips. In prior news articles, Phillips referred to regulation as an attempt to balance competing interests.
In announcing its selection of Phillips on September 9, the White House said, "As the Biden Administration works to tackle the climate crisis, advance environmental justice, and create a clean electricity grid by 2035, FERC will maintain an important role regulating the transmission of carbon-free energy across the country. ... As Chairman of the Public Service Commission of the District of Columbia, Willie was a thoughtful and innovative leader in modernizing the energy grid, implementing the District's aggressive clean energy and climate goals, and in protecting the District's customers."
Though most energy groups applauded Phillips' nomination and unanimous confirmation by the Senate, there was grousing from some quarters. The Marcellus News, a trade publication covering developments in the Marcellus Shale, called Phillips "a swamp-dwelling D.C. apparatchik" in a November 18 article headlined, "Senate Confirms D.C. Swamp-Dwelling Democrat Lawyer to FERC." The article predicted: "Phillips is bad, but not, perhaps, as bad as some others sleepy Joe could have tapped. ... Phillips will be the third vote to kill all new pipeline projects (maybe even previously certificated projects too)."
Phillips came in for some criticism from environmental groups because he was, in their eyes, insufficiently opposed to hydrocarbon projects. A news report in E&E News said the Center for Biological Diversity, Food & Water Watch and environmental justice groups are wary of what they view as Phillips' deference to utility and energy companies when it comes to consumer issues and climate change. That report also quoted Larry Martin, an official on Grid 2.0 Working Group, as saying: "Phillips has a good-looking agenda. It gets high marks on appearance. But behind the scenes, it's not advancing the clean energy transition."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
The panel now has a 3-2 Democratic majority, which may lead to heightened scrutiny of proposed projects that fall under the agency's purview, including interstate natural gas pipelines, LNG terminals, interstate electric transmission projects and the sale of wholesale power in bulk markets. President Joe Biden has vowed to cut U.S. greenhouse gas emissions by around 50% by 2030, and put the nation's economy on a path to fully decarbonize by 2050.
There are about 426 active U.S. Oil & Gas Pipeline projects valued at around $33.45 billion that are scheduled to begin construction between January 2020 and December 2022, according to Industrial Info Resources' Global Market Intelligence (GMI) platform. Not all of those projects are jurisdictional at FERC. Generally, that agency has no say over projects that remain within a single state. But once a pipeline project, or a proposed transmission project, crosses state boundaries, it is FERC jurisdictional.
Industrial Info's GMI platform also is tracking 68 pipeline projects that are scheduled to kick off construction between January 2020 and December 2022, but that are on hold. The value of those projects is about $10.2 billion. Developers give a variety of reasons for placing a project on hold, but an uncertain, or even a perceived hostile, regulatory environment certainly could qualify as a reason a project has become stalled. Whether it would make sense for developers to try to move these projects forward while Democrats have a majority on the panel is unclear. Again, as with the active projects, some of these on-hold projects would not be FERC-jurisdictional because they are contained within the borders of a single state.
Proposed umbrella pipeline projects that cross state boundaries, including the West Header project and the Market Hub Services & Pipeline Expansion, may draw extra FERC scrutiny given the administration's focus on decarbonizing. A Democrat-majority panel may be reluctant to green-light a long-lived infrastructure asset like a gas pipeline because it would lock in decades of gas use and potential methane emissions, contributing to global climate change.
As well, the body is actively considering whether its mandate in law could extend to performing greenhouse gas analyses of proposed projects that are jurisdictional and which emit greenhouse gases. That issue has bitterly split the commission in recent years, but because the panel lacked its full complement of commissioners, those issues were not decided.
Courts, notably the U.S. Court of Appeals for the District of Columbia Circuit, have criticized FERC and sent several cases back for reconsideration because the judges felt the commission did an inadequate job of assessing how emissions from proposed energy infrastructure projects could affect the climate.
Several proposed gas pipelines, notably the multibillion-dollar proposed Atlantic Coast Pipeline, have been abandoned after years of delay and regulatory opposition. For more on that, see July 7, 2020, article --Dominion Energy Strategically Repositions After Terminating Atlantic Coast Pipeline Project. Also, see July 8, 2020, article - Federal Judges Deal Two Defeats to Trump Administration's Vision of Energy Dominance and June 11, 2021, article - Keystone XL Pipeline Termination: Not the First or the Last Project to Fall.
The current 3-2 Democratic majority may tip the scales in favor of greater FERC scrutiny of hydrocarbon infrastructure, though almost no one expects Phillips to be a rubber stamp against hydrocarbon projects or in favor of renewable energy projects.
In congressional testimony, Phillips reportedly said, "I believe that climate change is real. I believe that we have a moral and ethical obligation to address it. We have to have balance in our approach." He said he would try to seek "balance" between reliability, affordability and sustainability.
Following FERC's November 18 meeting, FERC Chairman Rich Glick told reporters it was "not realistic" to assume the panel would vote 3-2 on every issue, along party lines.
Proposed interstate power transmission projects and LNG export terminals also may draw heightened FERC scrutiny with the Democrats in the majority. And a delay or adverse decision by FERC on those projects could have spillover effects on other energy projects. For example, if FERC rejects a proposed LNG export terminal, gas pipelines that were being developed to bring gas to that terminal would not be needed. And if the agency defers or rejects an interstate transmission project, developers of electric generation that planned to use that line might have to find new alternatives to that line.
IIR was unable to schedule an interview with Phillips. In prior news articles, Phillips referred to regulation as an attempt to balance competing interests.
In announcing its selection of Phillips on September 9, the White House said, "As the Biden Administration works to tackle the climate crisis, advance environmental justice, and create a clean electricity grid by 2035, FERC will maintain an important role regulating the transmission of carbon-free energy across the country. ... As Chairman of the Public Service Commission of the District of Columbia, Willie was a thoughtful and innovative leader in modernizing the energy grid, implementing the District's aggressive clean energy and climate goals, and in protecting the District's customers."
Though most energy groups applauded Phillips' nomination and unanimous confirmation by the Senate, there was grousing from some quarters. The Marcellus News, a trade publication covering developments in the Marcellus Shale, called Phillips "a swamp-dwelling D.C. apparatchik" in a November 18 article headlined, "Senate Confirms D.C. Swamp-Dwelling Democrat Lawyer to FERC." The article predicted: "Phillips is bad, but not, perhaps, as bad as some others sleepy Joe could have tapped. ... Phillips will be the third vote to kill all new pipeline projects (maybe even previously certificated projects too)."
Phillips came in for some criticism from environmental groups because he was, in their eyes, insufficiently opposed to hydrocarbon projects. A news report in E&E News said the Center for Biological Diversity, Food & Water Watch and environmental justice groups are wary of what they view as Phillips' deference to utility and energy companies when it comes to consumer issues and climate change. That report also quoted Larry Martin, an official on Grid 2.0 Working Group, as saying: "Phillips has a good-looking agenda. It gets high marks on appearance. But behind the scenes, it's not advancing the clean energy transition."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
