Will Politics Affect FERC’s Decision on Jordan Cove?
While we’re waiting for the Federal Energy Regulatory Commission, or FERC, to make its decision on Jordan Cove, it seems like a good time to take a closer look at the federal body that will in part decide the fate of the project.
In theory, the five-member FERC is a bipartisan entity. Typically, a Republican and a Democrat are nominated together, and no more than three commissioners may be from a single political party; this way, the commission more or less maintains a balance.
But as with so many things during the Trump Administration, convention has been cast aside.
Unfilled vacancies
Since August 2019, FERC has only had three commissioners: Chairman Neil Chatterjee and Bernard McNamee, both Republicans, and Richard Glick, the lone Democrat. This leaves FERC dangerously close to being without a quorum, as at least three commissioners are required to vote.
FERC has seen its share of shake-ups over the past year. Chair Kevin McIntyre died of brain cancer in early 2019. Around that same time, Democrat Cheryl LaFleur, who had served on the commission for nearly a decade, announced she would not be seeking another term. She left the commission in August.
President Trump has had over a year to ponder these vacancies and nominate a qualified Democrat and Republican pair.
In October, President Trump finally nominated James Danly, another Republican, but he failed to name a corresponding Democrat.
John Moore of the Natural Resources Defense Council had this to say about Trump’s move, according to an article that appeared in Natural Gas Intelligence:
"Critically, the nomination of only one commissioner when there are two vacancies reflects a further erosion of long-standing norms and undercuts the independence and bipartisan decision making at FERC."
(Incidentally, Democrats had been lobbying for Allison Clements, a former attorney for the Natural Resources Defense Council (NRDC), and although Trump met with Clements earlier this year, nothing has happened since.)
Danly’s nomination stalled late last year. Trump re-nominated him, and just a few days ago, the Energy and Natural Resources Committee voted 12-8 to advance his nomination. It’s not clear when the full Senate will vote.
Democrats on the Energy and Natural Resources Committee protested, and all but Joe Manchin (D-WV) voted against advancing Danly. According to an article that appeared in Utility Dive on March 4, Sen. Martin Heinrick, D-N.M. called it a “sad day.”
"The FERC has become a political ping pong match like everything else around here … and if you look at some of the capacity rulings and other things coming out of the FERC today, it is reprehensible."
Republicans like Lisa Murkowski were of the opinion that one nomination is better than none. Of course, she may be hoping to avoid any delays on her pet project, an LNG terminal proposed for Alaska. FERC will likely be ruling on that project this summer, and McNamee has already announced he will not seek another term once his expires in June. If Danly is not approved by then, FERC will definitely be without a quorum.
Senator Ron Wyden, D-Oregon, warned that if "you pass this nominee now, you stack the deck at FERC. It will be three Republicans and one Democrat."
Later Wyden tweeted: “Senate Republicans are helping Trump stack the deck at FERC – the top agency in charge of authorizing any new oil and gas pipeline projects – with right-wing nominees. I voted NO on politicizing this important Commission, which has a strong history of being nonpartisan.”
Increasingly political
In the past, many commissioners on the bipartisan FERC have been drawn from state regulatory agencies. In 2018, departing Commissioner Robert Powelson, a Republican, urged President Trump to uphold the integrity of the Commission by nominating “a very competent state regulator [to] come in and be part of this organization." Powelson himself had served as a state regulator in Pennsylvania.
"You need someone with a proven track record, with the ethical integrity," who will "stay away from using political dogma to drive outcomes. It could have really bad unintended consequences for markets," he said.
Upon leaving FERC, LaFleur noted striking differences between the Obama and Trump Administrations; in particular, she mentioned pressure from the White House to act on rulemaking that favored the fossil fuel industry and a change in how commissioners are selected.
"[T]here's been a considerable increase in the number of employees at the commission who are political hires, as opposed to civil service,” she said, according to a Utility Dive story that was published upon her retirement. “And I think that's maybe a little less visible than the notice of proposed rulemaking, but it's another slight cultural change," she said.
Commissioner McNamee, whom Trump nominated in 2018 to replace Powelson, is arguably a part of this trend. A Texas fossil fuel lawyer with ties to the Koch brothers, McNamee barely squeaked through in a full Senate vote, and many lawmakers, health advocates, and environmental organizations bemoaned his appointment to the commission.
McNamee has championed coal, and according to a Houston Chronicle article, he has called efforts to address climate change an “organized propaganda war” against fossil fuels and denied that carbon dioxide is a pollutant.
In January, Sen. Wyden sent President Trump a letter, urging him to fill out the commission before the vote on Jordan Cove. In his letter Wyden expressed concerns about the growing politicization of the commission; for example, he speculated that FERC waited to vote on ruling that favored coal generation until after Commissioner LaFleur stepped down.
While appreciated, Wyden’s letter could have come a lot earlier.
Wyden has never taken a hard stance on Jordan Cove; instead, he has consistently argued for a “fair, open, fact-based, and non-political” FERC process.
Similarly, Governor Kate Brown has avoided taking a side, instead standing behind the many Oregon agencies that are required to evaluate the project.
But while it’s become increasingly apparent than Oregon agencies are doing their due diligence, it’s less clear whether FERC is so inclined.
Miscues and miscommunication
February 20 was supposed to be the big day. It was FERC's monthly meeting. Jordan Cove was on the FERC agenda. Chairman Chatterjee started the meeting by acknowledging his support of Jordan Cove. Commissioner Glick explained why he was voting against the Order.
Then Commissioner Bernard McNamee surprised everyone by saying he was “a nay, but not a hard nay,” and that he needed more time to digest the comments submitted by the Oregon Department of Conservation and Land Development (DLCD).
During a press conference after the February 20 meeting, Commissioner Glick said he might need to recuse himself because of comments he made during the meeting on the assumption that the Order was going to be approved. If he were to do that, FERC would be left without a quorum.
Because of something called FAST-41, FERC is technically required to stay within 30 days of their set schedule, which would mean they must make a decision on Jordan Cove by March 13.
But who knows. At this point we’re just going to have to wait and see what happens.
In the meantime, it’s worth looking more closely at Glick’s protest. During the meeting, he argued that FERC should be looking at the greenhouse gas emissions associated with the Jordan Cove project.
In the past, Glick said, the Commission would say there was no way to evaluate the impact of such emissions because there was no federal or state standard against which to weigh them. But Oregon does have such a standard, he argued –even if it is at this point an aspirational goal—adding that the state has capped greenhouse gas emissions at 14 million metric tons a year by 2050. Jordan Cove alone will emit 2 million metric tons per year, or about 15% of the state’s total allowed emissions.
“It’s going to make it difficult for Oregon to meet its standards here,” said Glick. “But we’re just ignoring that and going forward.” And that’s not the only thing FERC is ignoring, he continued, listing noise, short-term housing, and impacts on threatened and endangered species as items that have not or cannot be adequately mitigated.
Glick implied that while the commissioners may have thought about these impacts, they didn’t actually go through the exercise of weighing them against the supposed economic benefits of Jordan Cove and laying out that analysis in the official Order.
“We need to do it in the Order, not in our heads,” he admonished.
Remember, Glick said all of this thinking he was going to be outvoted and that the order was going to be approved. Apparently, he didn’t know McNamee was on the fence.
Whoops.
Since then, Chariman Chatterjee has said that FERC may vote on either the original order or an amended one, and he tweeted that they will “issue an order when a majority is ready to do so.”
So now what?
FERC has the power to approve or reject an order for Jordan Cove. But in the last few weeks, we’ve been witnessing a power struggle between Oregon state agencies and Pembina, the Canadian company that owns Jordan Cove, as they argue about whether FERC can or should approve the order right now, given that Jordan Cove is missing three key permits from Oregon agencies.
Oregon says no.
Pembina says yes.
It’s hard to imagine, given the three denied state permits, how a FERC approval of Jordan Cove could not appear to be a partisan decision.
I’ll end with a quote from the Medford Mail Tribune Editorial Board, which argued in a February 23 Op-Ed that FERC was on the right track with its 2-1 vote against Jordan Cove, and recalling the commission’s nearly unprecedented denial of the project in 2016:
“FERC has denied this project once before, ruling that Veresen, the previous owner, had not demonstrated enough public benefit to overcome the impact to property owners along the 230-mile pipeline. It’s hard to see how anything has changed in that regard.”
I'm guessing the landowners who face having their land taken through eminent domain would agree.