Source: Houston Chronicle
WASHINGTON – Billions of dollars in gas pipeline projects face the prospect of substantial delays, as attempts to fill critical positions on the Federal Energy Regulatory Commission fall prey to a political inertia that has overtaken Washington in recent months.
With health care and the investigation into the Trump campaign’s contact with Russia sucking up the capital’s oxygen – and Republicans and Democrats increasingly at odds – nominations to federal posts have slowed to a virtual crawl.
The situation is particularly dire at FERC, which must give approval before construction can begin on any natural gas pipeline that crosses state lines. For the past five months, the five-member commission has not had the minimum three commissioners required for a vote – a first in its more than 40-year history.
That has resulted in a dozen pipeline projects, including those of Houston’s Spectra Energy and Tulsa’s Williams Co., getting put on hold while executives await final approval from FERC before beginning construction.
“We’ve never had a situation like this before, with such an acute backlog,” said David Holt, president of the Consumer Energy Alliance, a trade group representing energy consumers and producers. “There’s a level of dysfunction in the Senate and other parts of the government that are now impacting our ability to do our daily work.”
The Nexus pipeline, a $2 billion joint venture between Spectra and Detroit-based DTE Energy, is scheduled to begin delivering natural gas from the Marcellus Shale to markets across the Midwest and eastern Canada by the end of the year.
So far, the company has not announced a delay, but with construction expected to take as long as 10 months, executives have become increasingly vocal.
“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,” said Bill Yardley, president of gas transmission and midstream at Spectra’s parent, the Canadian pipeline company Enbridge.
The worsening backlog of projects, which lobbyists say could take months to work through, has left Washington filled with finger pointing.
FERC lost its minimum quorum in February when chairman Norman Bay – an Obama appointee who had been demoted to commissioner by Trump – opted to leave.
It was three months before the White House made its first two nominations, Robert Powelson, a member of the Pennsylvania Public Service Commission, and Neil Chatterjee, a longtime aide to Senate Majority Leader Mitch McConnell, R-Ky.
Despite going through confirmation hearings, neither has been brought to the Senate floor for a vote. The White House, pointing to the slow pace with which all its nominees are advancing, blamed Democrats for attempting “to obstruct the will of the American people and the president’s agenda.”
But Democrats cite a long-standing practice in the Senate that on bipartisan commissions like FERC – in which no one party is allowed to have more than three seats – nominees from both parties are voted on at the same time. And with Powelson and Chatterjee both Republicans, they are waiting for Trump to submit the paperwork nominating Richard Glick, a Democratic senate aide who the White House announced as a nominee last month.
Rep. Pete Olson, R-Sugar Land, said the FERC nominations have been overshadowed by a full agenda of contentious issues and the natural focus of a new administration on cabinet secretaries and undersecretaries.”
“At the same time Democrats are slow rolling some of these nominees,” he added. “There’s been some good progress lately, and hopefully this log jam will get broken.”
More than $50 billion in energy projects are waiting in the queue at FERC, according to analysis by Bloomberg in May. Many of those were only submitted in the last 12 months, and are still undergoing staff reviews. But a series of projects from 2015 and 2016 have completed their reviews – save a final vote by FERC commissioners.
One of them is the controversial Atlantic Coast pipeline, a $5.5 billion joint venture between Dominion Resources and Duke Energy that would run through the Appalachian mountains. Another is Williams’ $1 billion expansion of its Transco line, which runs from the Texas Gulf Coast to the northeast.
Altogether, a dozen interstate pipeline projects ,worth $14 billion in construction and other costs, await final approval from FERC, said Don Santa, president of the Interstate Natural Gas Association of America. And he said the point has come where companies could face serious financial hits if they can’t begin construction soon.
“These pipelines have contracts with their shippers, and there could be consequences if they don’t meet their projected in service date, which could then impact their earnings projections,” he said. “We’re not getting anything definitive [on a Senate vote], but we’re doing everything we can to communicate the consequence of this.”
Pipeline companies received some good news this past week, when McConnell said he would delay the Senate’s August recess by two weeks. That could potentially allow time for the Senate to move ahead on Glick’s nomination and put him and the other two nominees to a vote before the senators and their staffs leave Washington for the remainder of the summer.
On Thursday evening, the White House said it would nominate Kevin J. McIntyre, a Virginia attorney with the law firm Jones Day, to be FERC’s chairman. Down to a single commissioner – Acting Chairman Cheryl A. LaFleur – the confirmation of McIntyre and Trump’s other nominees would restore FERC to a full five-member board.