For the past three months, the Federal Energy Regulatory Commission (FERC or the Commission) has been without a quorum needed to make any decisions approving pipeline permits or rates. FERC is designed to have 5 Commissioners, but it must have at least 3 to constitute a quorum and make decisions. FERC Chairman Norman Bay resigned on February 3, 2017, leaving the Agency with only 2 Commissioners; less than a decision making quorum. To make matters worse, Commissioner Colleen Honorable announced this week that she intends to resign in the coming months.
FERC plays a significant role in federal oversight of both oil and gas pipelines. The Commission reviews shipping tariffs/rates for both oil and gas pipelines, and for natural gas pipelines FERC plays an even larger role, reviewing and approving the siting of all new construction projects. All new natural gas pipeline projects must obtain a Certificate of Public Necessity from FERC, which in turn triggers an obligation for the Agency to complete an environmental review under the National Environmental Policy Act (NEPA), which typically results in an Environmental Impact Statement (EIS). In preparing an EIS, FERC coordinates with numerous other federal and state agencies, stakeholders, and members of the public, including convening public hearings and reviewing comments filed in the public docket.
Without a quorum for the past three months, numerous pipeline pending permits/Certificates and decisions on tariff issues have been put on hold. Senator Lisa Murkowski, Chair of the Senate Committee on Energy and Natural Resources, has been pressing the White House to nominate candidates to fill the 3 (soon to be 4) vacant FERC Commissioner positions. So far, the White House has not responded. Even once new Commissioner candidates are nominated, they require Senate approval, which will take even more time to complete. The new Administration has many senior federal department and agency positions yet to fill, and FERC nominations may lag even longer than other agencies because by statute the Commission reports directly to Congress, not the Executive Branch.
Unfortunately, this hold on FERC action is getting worse instead of better. First, industry and Congress are still waiting for the White House to nominate FERC Commissioners. Second, FERC staff is now actively seeking to delay Commission action on pending matters, even once a quorum is regained. On May 3, 2017, FERC staff (not Commissioners) testified before the House Energy & Commerce Committee to oppose permit streamlining efforts that have been directed by both the Trump and the Obama administrations. The recent testimony was in response to pending legislation in the House that would further require permit streamlining by all federal agencies. Testimony by FERC staff asserted that forcing a time limit for FERC to complete its review under NEPA (typically preparing an EIS) would not allow the Commission sufficient time to fully evaluate current and potential threats. Citizen groups echoed that concern.
Related to the permit review and streamlining debate, several states (primarily in the Northeast at present) have sought to delay FERC review of new pipeline construction projects on their own, by delaying or rejecting Clean Water Act (CWA) Section 401 Certifications. That provision simply requires a state to comment on whether a federally permitted or funded project is in compliance with all federal and state water protection requirements. Some states have been withholding that approval for recent construction projects, in most instances simply for the sake of delay (i.,e., objecting even where no CWA requirements are exceeded).
All parties, from industry to Congress to pipeline opponents should support getting FERC re-established with a quorum. Without that, many critical issues will go unaddressed, without any discussion in the public forum about relevant concerns.