Billions of dollars’ worth of shovel-ready infrastructure projects have been held up by a bureaucratic morass that President Donald Trump helped to create.
Trump’s slowness to fill vacancies at the Federal Energy Regulatory Commission is one reason for a growing backlog of natural gas pipelines and a gas export terminal awaiting approval from the agency, which has been unable to conduct major business since February. The waiting list has grown to at least $13 billion worth of projects expected to generate more than 23,000 construction jobs, according to a POLITICO analysis — largely in states Trump won in November.
Finally, the agency is ready to get back to work after the Senate confirmed two FERC nominees late Thursday. The commission was crippled by leadership vacancies just two weeks after Trump’s inauguration when he demoted its former chairman, who promptly quit. Since July 1, four of the agency’s five seats have been vacant.
FERC oversees interstate pipelines, liquefied natural gas exports and wholesale electricity markets. For the projects’ supporters and people who follow the agency, Thursday’s confirmation of Pennsylvania regulator Rob Powelson and Republican Senate aide Neil Chatterjee could not have come too soon.
“I would not begin to minimize even the passage of another month,” said former FERC Commissioner Colette Honorable, “because there are high stakes in the matters that come before FERC each and every day — vast amounts of capital at issue, vast amounts of consumer cost or savings at stake.”
Many of the largest pipeline projects waiting for approval run right through Trump country, carrying gas out of shale plays in West Virginia, Pennsylvania and Ohio — all states Trump won last year and hopes to win again. One project alone, called Atlantic Coast, would bring 10,000 jobs to West Virginia, Virginia and North Carolina, and the $2 billion NEXUS line would put 3,300 people to work in Michigan and Pennsylvania, states Trump flipped to red for the first time in decades.
Encouraging domestic energy production and rebuilding the nation’s infrastructure were major campaign themes for Trump, whose promises of a $1 trillion infrastructure plan have yet to yield concrete progress on Capitol Hill.
FERC’s holdup came as the agency, which has a $350 million annual budget and 1,500 employees, has found its once-quiet regulatory responsibilities increasingly politicized as its work draws closer to the center of some of the nation’s most significant energy and climate policy debates.
The small independent agency does not formally take direction from the White House, but it has ample power to shape Trump’s agenda of U.S. “energy dominance.” FERC is in charge of authorizing facilities to export natural gas; balancing the environmental risks and benefits of the fracking boom; setting rates for increasingly complicated energy markets; and deciding how far states can go in propping up nuclear power plants by paying more for their carbon-free energy.
Environmentalists, who besieged the agency’s meetings with protests last year, say FERC takes too narrow a view of its mandate to ensure affordable, reliable energy supplies and has ignored larger questions of climate change and environmental protection. Their protests have intensified in the wake of the fracking boom that led to higher demand for new pipelines and export terminals.
Industry supporters say any policy changes need to come from Congress and complain that their projects are falling victim to partisan infighting.
But virtually everyone who has a history with FERC agrees that the polarization around the agency did not begin this year. The agency’s long state of paralysis is complex enough that Trump is not solely at fault.
“There are a number of things that had to go wrong to put FERC in this current position, and every single one of them went wrong,” said Marc Spitzer, a former Republican FERC commissioner. “It’s unfair to put all the blame on any one person.”
FERC was set at the precipice of dysfunction by former President Barack Obama, when GOP Commissioner Phil Moeller resigned in October 2015 and fellow Republican Tony Clark followed him out the door 11 months later. Obama never nominated anyone to fill the two GOP-designated seats, in part because of Democrats’ larger political feud with Senate Republicans after Majority Leader Mitch McConnell blocked Merrick Garland’s nomination to the Supreme Court without any hearings or votes.
But it was Trump who pushed FERC off that cliff, when he stripped the chairmanship from Norman Bay and gave it to Cheryl LaFleur, another Democrat. Bay followed the lead of most chairs who lose the gavel and resigned, taking the agency’s quorum with him. As of July 1, when Honorable resigned, LaFleur became the agency’s sole member.
Democrats fault the White House for the pace of confirming new commissioners. The Senate has traditionally confirmed nominees to bipartisan commissions such as FERC by packaging picks from both parties together before bringing them to the floor for votes. But the White House only formally nominated Democratic aide Rich Glick on Wednesday, five weeks after announcing plans to do so.
Others blame the lack of trust in a polarized Washington.
“The Senate functions based on trust and unanimous consent. If everything in the Senate has to go the whole nine yards, then virtually nothing gets done,” said one longtime industry official close to pending projects who asked not to be named in order to speak freely. The Senate can move swiftly, the source added, “but in order for that to happen, there needs to be some measure of trust.”
Two of Trump’s FERC picks, Republicans Chatterjee and Powelson, cleared the Senate energy committee in June, but without Glick’s nomination, Senate Democrats were unlikely to allow a delay-free confirmation. Once Glick’s papers came in, Democrats let them through on the last day before a monthlong recess.
But industry spent the intervening months watching the clock tick while projects stayed frozen.
“FERC’s lack of a quorum since early February represents an unnecessary drag on the economy, sidelining billions of dollars in private capital otherwise poised to put thousands of Americans to work expanding and improving our nation’s energy delivery system,” said Adam Parker, a spokesman for the NEXUS pipeline project being built by Enbridge.
Enbridge will miss a year-end deadline to begin operating the $2 billion, 256-mile natural gas link between a Marcellus shale natural gas field in eastern Ohio and markets in Michigan and Canada. The project, which would put 3,365 people to work, finished its environmental review in November — the penultimate regulatory step before construction can begin — and has been waiting since for the commission to get staffed up.
NEXUS is one of 18 pipelines and gas projects that have completed environmental reviews since last fall but could not receive FERC’s final OK while it lacked a quorum. Others include TransCanada’s WB Xpress; the Mountain Valley Pipeline, which has six companies behind it; the Atlantic Coast Pipeline, being built by a partnership of Duke, Dominion, Piedmont Gas and Southern Co.; and PennEast, whose backers include Southern Co. and Spectra Energy. Each of these projects will carry natural gas out of the Marcellus shale to population centers in the East or Midwest.
An unusual deep-water LNG export terminal that Delfin LNG wants to build at Port Delfin in Louisiana has its Department of Energy approval, but it needs FERC to sign off on-shore parts of the project before construction can begin.
Together, the projects stand to employ more than 23,000 people in mostly temporary construction jobs and would inject more than $13 billion in investments into the economy, according to the companies behind them.
For many of these pipelines, the lack of a quorum may have cost them a year of work: Summer and fall are ideal times to build in much of the country. Foul weather stops construction in winter, and environmental considerations often make spring work untenable.
The delays provided a temporary win to the growing ranks of anti-pipeline protesters, who have been arrested at FERC meetings and sometimes even camped outside of commissioners’ homes to protest approvals of the infrastructure necessary to move all the new natural gas unlocked by the fracking boom.
Some of those same activists were hoping Senate Democrats would do everything possible to keep the open seats from ever being filled. Sen. Bernie Sanders (I-Vt.), whom activists cite as an ally, opposed the two nominated commissioners in committee, and he opposes a bipartisan energy bill that would speed up pipeline approvals.
Keeping FERC without a quorum slowed that process.
“As long as there’s no quorum established, no pipelines are being approved. That helps us,” said Karen Feridun, founder of Berks Gas Truth, an anti-fracking group out of Berks County, Pa., that is part of the umbrella FERC Vacancies Coalition.
Pipeline approvals are not the only backlog awaiting Trump’s new FERC commissioners. They will also be thrust into the center of testy regional and state-level battles over programs designed to address climate change by subsidizing nuclear power plants, and potentially price carbon emissions.
“FERC, and what’s subject to its jurisdiction, kind of got dragged into the climate debate,” the industry official said, noting that the agency has found itself the target of ever-increasing interest on Capitol Hill from “those in Congress who wanted to stop the [Obama administration’s] Clean Power Plan and were unable to do so.”
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