Political Influence Continues at Federal Energy Regulatory Commission (FERC)

by Duane Nichols on October 2, 2019

US DOE and FERC are trying to bend reality for political gain

FERC Warns A Gas Pipeline Attack Could Cause Mass Blackouts

From an Article by Tsvetana Paraskova, OilPrice.com, September 24, 2019

An attack on a single natural gas pipeline in the United States could lead to mass blackouts, Neil Chatterjee, chairman of the Federal Energy Regulatory Commission (FERC), told CNN Business, discussing America’s energy infrastructure in the aftermath of the attacks on crucial oil facilities in Saudi Arabia.

Those attacks in the world’s top oil exporter should serve as a wake-up call for America to pay attention to potential vulnerabilities in its own infrastructure, Chatterjee told CNN.

With the growing share of natural gas in the U.S. power mix, one outage of a gas pipeline could cause cascading blackouts, the official said.

“Twenty years ago, a single generator might not have even flinched if a pipeline went down,” he told CNN, adding “Today, we have eight or nine generators depending on a single gas pipeline.”

An outage would have cascading effects “and our adversaries know this,” Chatterjee said.

“Protecting that infrastructure is of utmost focus,” FERC’s chairman told Yahoo Finance’s Julie Hyman at the 2019 Concordia Summit in New York City on Monday.

“One of the exciting things we are seeing as the energy transition is taking place in the United States is that the reliability of the grid has been maintained while costs are coming down for consumers,” Chatterjee said, but was quick to add that “we are also seeing an increased interdependence between the use of gas and the power sector.”

“That’s why it is so important that we at the Commission work with our federal partners, state partners, industry to stay ahead of these ever evolving threats,” FERC’s chairman noted.

The U.S. Department of Energy said last year it was awarding up to US$28 million in research and development of next-generation tools and technologies aimed at improving the cybersecurity of the critical American energy infrastructure, including the electric grid and oil and natural gas infrastructure.

In December 2018, the Government Accountability Office (GAO) found that actions need to be taken to address significant weaknesses at the Pipeline Security Program Management of the Department of Homeland Security’s (DHS) Transportation Security Administration (TSA).


Energy Regulators May Reconsider Rules Critics Say Fueled America’s Oil and Gas Pipeline Glut | DeSmog, Sharon Kelly, May 13, 2019

A little-noticed Federal Energy Regulatory Commission (FERC) announcement could have an outsized impact on the oil and gas pipeline industries — if the commission decides to snap shut loopholes that analysts say create financial incentives to build too many new pipelines in the U.S.

The way the rules are currently written can allow unusually high profit margins for new pipeline projects. Since 1997, FERC has allowed certain new pipelines to rake in 14 percent profits — a rate far higher than the returns presently generated by, say, corporate bonds — with little eye to how that compares to profits available from other investments.


White House Shows Contempt for Informed and Independent FERC with Danly Nomination

Statement by Sam Gomberg, Union of Concerned Scientists, October 1, 2019

WASHINGTON (October 1, 2019)—In a marked departure from decades of precedent, the White House nominated James Danly, Federal Energy Regulatory Commission (FERC) general counsel, to fill one of two vacant seats on the Commission.

Statement by Sam Gomberg, Senior Energy Analyst at the Union of Concerned Scientists.

“Mr. Danly is woefully underqualified for the job, and President Trump’s decision not to pair the Republican commission nomination with that Allison Clement, the Senate’s suggested choice to fill the open Democratic seat, is a misguided move that would be a disaster for consumers, the climate and any remaining vestiges of independent and informed federal decision-making over the nation’s energy sector.

“This is a dangerous precedent for either political party and will only add legal uncertainty to impending and future FERC decisions. Not only does the nomination of James Danly throw out decades of precedent—precedent that has helped preserve FERC as an independent and objective regulator of energy markets—we shouldn’t lose sight of the fact that this nominee is woefully unqualified for the job. Prior to his appointment to general counsel at FERC, he had a brief stint as an associate energy attorney.

“I simply don’t see how the American public can have any confidence in his ability to understand the complex issues facing the energy sector right now and to make forward-looking, well-informed decisions on the issues awaiting the Commission. His inexperience absolutely increases the risk of a Commission unable to defend consumers from biased and politically motivated attacks on our regulatory structure.

“It’s hard to imagine that Danly’s nomination–particularly in light of Trump’s refusal to pair him with a Democratic nominee to fill the other vacant seat–is anything more than an effort to diminish the Commission’s ability to make informed and objective decisions and fulfill their obligation to protect consumers. The Senate should refuse to move Danly forward without a pairing with Ms. Clements to fill the Democratic seat. Unless the Senate demands a fully functioning, bipartisan FERC, President Trump will be happy to leave Democratic seats empty and silence meaningful bipartisan discourse.”

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