A new battle is brewing over pipelines, just in time for an election year.
But the battle, or more accurately, battles, have nothing to do with oil or the Keystone XL pipeline.
It’s all about equally abundant natural gas and the federal agencies that are preventing the fuel from reaching the market.
The number of pipelines being proposed has soared in the past year, prompting environmentalists to fight their construction and the energy industry to push the government to approve them quicker.
Environmental groups are targeting the nation’s utility regulator, the Federal Energy Regulatory Commission, and its role in siting interstate pipelines as a way to combat climate change and to stop hydraulic fracturing, or fracking, which has made the U.S. a global energy power.
“I will suggest that the environmentalists aren’t stupid,” said Corky DeMarco, executive director of the West Virginia Oil and Natural Gas Association. They have “connected the dots” between pipelines and new drilling and are targeting FERC to slow the approvals, he said.
“That is part of the game plan,” DeMarco said. “From their standpoint, they tried the air issue, the water issue,” but “none of those worked.” So, now they are trying to hobble pipeline development. DeMarco represents developers in one of the largest shale gas regions in the East, the Marcellus formation, which includes Pennsylvania, West Virginia and some parts of New York and Maryland.
“Pipeline and export terminals are prime targets” in those states, said Scott Parkin, senior campaigner with the environmental group Rainforest Action Network. “There’s a growing opposition to oil, gas and coal in the U.S. Especially after the rejection of the Keystone pipeline, these types of infrastructure projects are clear choke lines to stop the dangerous transport of these materials and hazardous extraction practices like fracking.”
West Virginia has six major gas pipeline approvals pending at the commission, which DeMarco says the state is dependent upon to support its growing natural gas industry. The new lines would deliver shale gas to the large population centers of the Northeast, Southeast and the Midwest.
DeMarco said that demand will grow as West Virginia starts tapping the gas-rich Utica shale also in the state.
But he is not sure if the commission is up to the task. The pipeline expansion that he says the regulator should have approved by now represents thousands of jobs, millions of dollars in tax revenue and development costs. “If you come from a state with the highest unemployment in the country, it doesn’t get more important than this,” he said. The importance of natural gas is rising in the state, especially as the coal industry fades.
“Somebody needs to figure out what the delays are,” he said. DeMarco places some of the blame on relatively new FERC Chairman Norman Bay, nominated by President Obama in 2014. DeMarco said since Bay came on board, not one interstate pipeline has been approved.
The commission disagrees, pointing out that more than 90 percent of pipeline applications are acted on within a year. “Of the projects [cited], no application is more than a year old, three are less than five months old and one has not yet been filed,” a commission spokesman said.
The commission certified more pipeline capacity and miles last year, through November, than the previous year, the spokesman added.
The regulator does a good job, said Don Santa, president and CEO of the Interstate Natural Gas Association of America. But “increased public opposition” from activists has swept the commission into a broader environmental fight.
FERC’s “burden” is to respond to the activists’ filings in the pipeline siting process, which adds time. Santa said the commission needs to ensure all issues are addressed so it can withstand any legal challenges.
At the same time, the commission has seen a number of requests for administrative rehearings on its pipeline decisions, as well as an appeals court review, which Santa says is the most the agency has seen in a decade because of environmental opposition.
Meanwhile, a coalition of dozens of activist groups, including state chapters of the Sierra Club and groups such as “No Fracked Gas in Mass,” is trying to up the ante in Congress by calling on Sen. Bernie Sanders of Vermont, who is running for president, to probe the commission’s environmental review policies.
Sanders is a member of the Energy and Natural Resources Committee, which has jurisdiction over the commission. The letter, also addressed to Sen. Elizabeth Warren, D-Mass., asks the senators to tap the Government Accountability Office to investigate FERC’s operations. It says the commission has become “demonstrably biased,” becoming a partner with, “rather than a regulator of, the pipeline companies it purports to oversee.”
The FERC process also is being hindered by other agencies dragging their feet on approvals. The commission is “dependent on the input from other federal agencies” when it comes to environmental reviews, Santa said. He wants Congress to give the commission more authority to overcome some of these hurdles, starting with the power to enforce deadlines on those agencies.
Rep. Mike Pompeo, R-Kansas, tried to give the agency some teeth in a bill he sponsored that passed the House last year and is pending in the Senate. A comprehensive energy bill in the Senate attempts to address some of the concerns, but does not go far enough, Santa said.
“FERC is not the core of the issue here,” Pompeo told the Washington Examiner. The problem is other agencies, and reviews under the Environmental Protection Agency’s Clear Air Act, Interior Department’s Endangered Species Act and a host of environmental reviews, he said. Delays and the “enormous cost” of getting a pipeline approved are prompting companies not to build them, which leads to less gas making it to market and higher energy prices.
Pipelines are so important to large energy consumers that the National Association of Manufacturers has made them part of a campaign to demonstrate its policy priorities to presidential candidates.
Ross Eisenberg, the group’s vice president for energy policy, said pipeline delays is one gripe that manufacturers continue to raise. Manufacturers need the pipelines to ensure enough supply to support their operations, which includes making everything from cosmetics to electricity.
“The main point … is there is a real need for these projects,” Santa said. “At the end of the day these delays hurt consumers.”