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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Developers of energy projects that cross state lines, like electric transmission projects and oil and gas pipelines, regularly face a range of hurdles that must be overcome before ground can be broken on a project. As sure as the sun rises in the east, a familiar cast of opponents and intervenors, such as environmental groups, property owners, preservation groups and governmental agencies can be counted on to either oppose a proposed project outright or demand more or less meaningful concessions. That opposition triggers a familiar process that developers often win because they have the deep pockets that allow them to hire lawyers, lobbyists, scientists and PR firms that, collectively, overwhelm all but the largest and best-funded opponents and intervenors.
But developers of interstate energy projects now face a new hurdle for their projects that no amount of lawyering or PR can overcome this new obstacle. The Federal Energy Regulatory Commission (FERC) (Washington, D.C.), an independent agency within the Department of Energy (DoE) (Washington, D.C.), has been without a quorum since the beginning of February. Three of FERC's five commissioner seats are empty, which means that votes cannot be taken on proposed interstate energy projects like liquefied natural gas (LNG) export terminals, transmission lines, oil and gas pipelines or hydroelectric dam relicensing.
The quorum at FERC will be restored after Trump nominates and the Senate confirms the first candidate to fill one of the empty seats at the agency. It's anyone's guess how long that will take.
FERC has been short-handed since September 2015, when Commissioner Phillip Moeller resigned. Then, last September, Commissioner Tony Clark resigned, reducing the agency to a still-functioning quorum of three commissioners. But then, a month ago, Norman Bay, FERC's then-chairman, resigned, taking with him the agency's quorum.
FERC's two remaining commissioners--Acting Chair Cheryl A. LeFleur and Commissioner Colette D. Honorable--are Democrats. Though they are political appointees, they were not required to resign when Donald Trump became president. No more than three FERC commissioners can be appointed by one political party, which means Trump will be able to appoint up to three new commissioners to FERC.
The three new commissioners could press the agency and its staff to reach decisions faster than prior commissions. Such a streamlining would be welcome news to most developers.
During the presidential campaign and the first five weeks of his presidency, President Trump vowed to increase domestic energy production, largely by streamlining regulations. In the first week of his presidency, he signed executive actions to expedite federal approval of infrastructure projects deemed "high priority," such as some pipelines and transmission projects. For more information on this, see January 31, 2017, article - Trump Orders Benefit KXL, DAPL and Other 'High Priority' Infrastructure Projects.
The Trump orders specifically mentioned pipelines and transmission lines as infrastructure projects that could be designated "high priority." But until FERC gets its quorum back, the agency will be unable to make a decision to grant a permit or a license.
It may be a while before the president is able to nominate one or more commissioners to restore a quorum to FERC. Across the federal government, the president has to fill 549 key positions that require Senate approval, according to information assembled by Partnership for Public Service (PPS) (Washington, D.C.), a non-partisan, non-profit organization, and The Washington Post. Of those 549 key positions, through March 2, only 17 nominees have been confirmed by the Senate, and another 16 await Senate confirmation, leaving 516 unfilled key positions, including 116 at the Department of State, 53 at the Defense Department, 27 at the Treasury Department and 21 at the Department of Energy.
On March 2, the Senate confirmed Rick Perry, the former governor of Texas, as Energy Secretary.
Beyond the 549 government leadership positions designated "key," which includes the three FERC commissioners, there are an additional 3,500 political appointments across the federal government that don't rise to the level of "key," but which require a presidential nomination, according to the PPS. How many of those positions will be filled by President Trump may depend on the budget documents he will submit to Congress. Some federal agencies are expecting personnel cuts of 15% to 30% or more.
"There's tons of speculation about who will be appointed to FERC, but no one really knows anything for sure about personnel or timing," one veteran energy observer in Washington told Industrial Info. "Given all the other open leadership positions in government agencies, I don't think FERC is anywhere near the top of that list."
"FERC really worked hard in January to get as many decisions approved as possible, before the commission lost its quorum," this source said in an interview. "They also expanded staff authority so that applications could continue to advance, even though there is no quorum for a decision. But in terms of what applications are not getting considered or approved right now, nobody really knows. FERC doesn't post a list of things that aren't getting done. All we know for sure is that there have been no meetings since the end of January."
That lack of knowledge has not stopped FERC-watchers from playing the name game, a time-honored, inside-the-Beltway guessing game about which candidates will be nominated to fill which leadership positions at which federal agencies.
Several names have been floated as potential FERC commissioners, including:
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 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. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
But developers of interstate energy projects now face a new hurdle for their projects that no amount of lawyering or PR can overcome this new obstacle. The Federal Energy Regulatory Commission (FERC) (Washington, D.C.), an independent agency within the Department of Energy (DoE) (Washington, D.C.), has been without a quorum since the beginning of February. Three of FERC's five commissioner seats are empty, which means that votes cannot be taken on proposed interstate energy projects like liquefied natural gas (LNG) export terminals, transmission lines, oil and gas pipelines or hydroelectric dam relicensing.
The quorum at FERC will be restored after Trump nominates and the Senate confirms the first candidate to fill one of the empty seats at the agency. It's anyone's guess how long that will take.
FERC has been short-handed since September 2015, when Commissioner Phillip Moeller resigned. Then, last September, Commissioner Tony Clark resigned, reducing the agency to a still-functioning quorum of three commissioners. But then, a month ago, Norman Bay, FERC's then-chairman, resigned, taking with him the agency's quorum.
FERC's two remaining commissioners--Acting Chair Cheryl A. LeFleur and Commissioner Colette D. Honorable--are Democrats. Though they are political appointees, they were not required to resign when Donald Trump became president. No more than three FERC commissioners can be appointed by one political party, which means Trump will be able to appoint up to three new commissioners to FERC.
The three new commissioners could press the agency and its staff to reach decisions faster than prior commissions. Such a streamlining would be welcome news to most developers.
During the presidential campaign and the first five weeks of his presidency, President Trump vowed to increase domestic energy production, largely by streamlining regulations. In the first week of his presidency, he signed executive actions to expedite federal approval of infrastructure projects deemed "high priority," such as some pipelines and transmission projects. For more information on this, see January 31, 2017, article - Trump Orders Benefit KXL, DAPL and Other 'High Priority' Infrastructure Projects.
The Trump orders specifically mentioned pipelines and transmission lines as infrastructure projects that could be designated "high priority." But until FERC gets its quorum back, the agency will be unable to make a decision to grant a permit or a license.
It may be a while before the president is able to nominate one or more commissioners to restore a quorum to FERC. Across the federal government, the president has to fill 549 key positions that require Senate approval, according to information assembled by Partnership for Public Service (PPS) (Washington, D.C.), a non-partisan, non-profit organization, and The Washington Post. Of those 549 key positions, through March 2, only 17 nominees have been confirmed by the Senate, and another 16 await Senate confirmation, leaving 516 unfilled key positions, including 116 at the Department of State, 53 at the Defense Department, 27 at the Treasury Department and 21 at the Department of Energy.
On March 2, the Senate confirmed Rick Perry, the former governor of Texas, as Energy Secretary.
Beyond the 549 government leadership positions designated "key," which includes the three FERC commissioners, there are an additional 3,500 political appointments across the federal government that don't rise to the level of "key," but which require a presidential nomination, according to the PPS. How many of those positions will be filled by President Trump may depend on the budget documents he will submit to Congress. Some federal agencies are expecting personnel cuts of 15% to 30% or more.
"There's tons of speculation about who will be appointed to FERC, but no one really knows anything for sure about personnel or timing," one veteran energy observer in Washington told Industrial Info. "Given all the other open leadership positions in government agencies, I don't think FERC is anywhere near the top of that list."
"FERC really worked hard in January to get as many decisions approved as possible, before the commission lost its quorum," this source said in an interview. "They also expanded staff authority so that applications could continue to advance, even though there is no quorum for a decision. But in terms of what applications are not getting considered or approved right now, nobody really knows. FERC doesn't post a list of things that aren't getting done. All we know for sure is that there have been no meetings since the end of January."
That lack of knowledge has not stopped FERC-watchers from playing the name game, a time-honored, inside-the-Beltway guessing game about which candidates will be nominated to fill which leadership positions at which federal agencies.
Several names have been floated as potential FERC commissioners, including:
- Neil Chatterjee, a staffer in Senate Majority Leader Mitch McConnell's office
- Pat McCormick, staff director of the Senate Energy and Natural Resources Committee
- Robert F. Powelson, a commissioner on the Pennsylvania Public Utility Commission (Harrisburg, Pennsylvania)
- Ellen Nowak, a commissioner with the Wisconsin Public Service Commission (Madison, Wisconsin)
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 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. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
