President Trump has vowed to revive oil and gas pipelines. But he just accidentally froze a bunch of them.
Here’s how. Trump elevated Cheryl A. LaFleur to the chairmanship of the Federal Energy Regulatory Commission. As a result, the sitting chairman Norman C. Bay, rather than remain an ordinary commission member, resigned effective Friday.
That wasn’t part of the plan. When Bay departs, the five-person commission, which already has two vacancies, will no longer have a quorum. No quorum means no approvals for contested issues including electric transmission lines, natural gas pipelines and utility plans. Any new member nominated by Trump must go through Senate confirmation, something that could take another four months.
“This leaves FERC paralyzed for the time being,” said Arvin R. Ganesan, vice president for federal policy at Advanced Energy Economy, a business advocacy group. The commission issues an average of more than five orders a day, according to a former member who counted them.
The looming lack of a quorum “has increased the urgency” for project approvals this week, according to Capital Alpha Partners, a firm that provides policy research to financial institutions. In a note to clients, it said that some of the pipelines in line for approval “may face in-service delays of up to a year due to seasonal prohibitions on tree-clearing to mitigate impacts on migratory birds, bats, and other species.”
FERC, an independent agency, regulates interstate oil and gas pipelines, electricity transmission lines, liquefied natural gas terminals, hydropower projects and wholesale electricity prices.
The natural gas pipelines waiting for approval early in the week included Williams Partners’ Atlantic Sunrise to carry Pennsylvania shale gas to eastern markets; a Nexus pipeline linking eastern Ohio to southern Michigan; Rover, which will carry gas from western Pennsylvania, West Virginia and eastern Ohio to southern Michigan; and Atlantic Coast, which travels from West Virginia to North Carolina. Rover, being built by Energy Transfer Partners (owner of the Dakota Access pipeline), has drawn opposition from the Sierra Club.
Some of those pipelines have been waiting for a long time, but are still resolving issues. Atlantic Coast made at least three additional filings to the FERC in January, covering migratory birds, visual impact and route adjustments.
On Thursday night, the commission gave a partial approval to the Rover pipeline. But a note to investors by Barclays Research said that the commission denied a blanket construction certificate, instead attaching contingencies that will prevent immediate construction. Among other things, the commission was concerned about Rover’s “intentional demolition” of a house that was eligible for listing in the National Register of Historic Places.
On Friday, FERC hurriedly approved the Atlantic Sunrise pipeline too. The Sierra Club issued a statement saying “FERC’s decision to rush this dirty and dangerous project through is nothing short of reckless” and that FERC’s review was “inadequate.”
Pipeline opponents were also rushing to get rulings this week. Sens. Edward J. Markey (D-Mass.) and Elizabeth Warren (D-Mass.) urged the commission to quickly rescind an order authorizing Spectra’s Atlantic Bridge pipeline. They have charged that Spectra has potential conflicts of interest with a contractor.
FERC can continue to make rulings as long as they aren’t contested. But contested issues are common as issues are raised not only by environmentalists but also by competitors or people living along a project route. The commission is looking at ways to delegate more power to its staff, but that might be a violation of its own statutory authority.
The idea of reshuffling the commission before filling the empty seats originated with the energy transition team, a group close to the utility and oil and gas industries. The suggestion traveled up through the administration until it landed on Trump’s desk. Elevating LaFleur required his signature.
Sources close to the transition and administration say that the idea was to elevate LaFleur because, while nominated by President Obama, she has more than 20 years of experience working in the utility business. Bay, while well liked even by those in the utility business, has a long record as a prosecutor and director of FERC’s enforcement division.
The other member of the commission is Colette D. Honorable, also an Obama appointee, whose term ends June 30.
Trump will get to fill all three empty seats with Republicans.
Sean McGarvey, president of North America’s Building Trades Unions whose members build pipelines, said he was not concerned about delays and said that the Trump administration would “quickly fill those positions.”
But other FERC watchers say that it could take time for a new commissioner to get up to speed.