[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
LEGISLATION ADDRESSING PIPELINE AND HYDROPOWER INFRASTRUCTURE
MODERNIZATION
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
MAY 3, 2017
__________
Serial No. 115-30
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
26-256 PDF WASHINGTON : 2017
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COMMITTEE ON ENERGY AND COMMERCE
GREG WALDEN, Oregon
Chairman
JOE BARTON, Texas FRANK PALLONE, Jr., New Jersey
Vice Chairman Ranking Member
FRED UPTON, Michigan BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois ANNA G. ESHOO, California
TIM MURPHY, Pennsylvania ELIOT L. ENGEL, New York
MICHAEL C. BURGESS, Texas GENE GREEN, Texas
MARSHA BLACKBURN, Tennessee DIANA DeGETTE, Colorado
STEVE SCALISE, Louisiana MICHAEL F. DOYLE, Pennsylvania
ROBERT E. LATTA, Ohio JANICE D. SCHAKOWSKY, Illinois
CATHY McMORRIS RODGERS, Washington G.K. BUTTERFIELD, North Carolina
GREGG HARPER, Mississippi DORIS O. MATSUI, California
LEONARD LANCE, New Jersey KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky JOHN P. SARBANES, Maryland
PETE OLSON, Texas JERRY McNERNEY, California
DAVID B. McKINLEY, West Virginia PETER WELCH, Vermont
ADAM KINZINGER, Illinois BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia PAUL TONKO, New York
GUS M. BILIRAKIS, Florida YVETTE D. CLARKE, New York
BILL JOHNSON, Ohio DAVID LOEBSACK, Iowa
BILLY LONG, Missouri KURT SCHRADER, Oregon
LARRY BUCSHON, Indiana JOSEPH P. KENNEDY, III,
BILL FLORES, Texas Massachusetts
SUSAN W. BROOKS, Indiana TONY CARDENAS, California
MARKWAYNE MULLIN, Oklahoma RAUL RUIZ, California
RICHARD HUDSON, North Carolina SCOTT H. PETERS, California
CHRIS COLLINS, New York DEBBIE DINGELL, Michigan7
KEVIN CRAMER, North Dakota
TIM WALBERG, Michigan
MIMI WALTERS, California
RYAN A. COSTELLO, Pennsylvania
EARL L. ``BUDDY'' CARTER, Georgia
Subcommittee on Energy
FRED UPTON, Michigan
Chairman
PETE OLSON, Texas BOBBY L. RUSH, Illinois
Vice Chairman Ranking Member
JOE BARTON, Texas JERRY McNERNEY, California
JOHN SHIMKUS, Illinois SCOTT H. PETERS, California
TIM MURPHY, Pennsylvania GENE GREEN, Texas
ROBERT E. LATTA, Ohio MICHAEL F. DOYLE, Pennsylvania
GREGG HARPER, Mississippi KATHY CASTOR, Florida
DAVID B. McKINLEY, West Virginia JOHN P. SARBANES, Maryland
ADAM KINZINGER, Illinois PETER WELCH, Vermont
H. MORGAN GRIFFITH, Virginia PAUL TONKO, New York
BILL JOHNSON, Ohio DAVID LOEBSACK, Iowa
BILLY LONG, Missouri KURT SCHRADER, Oregon
LARRY BUCSHON, Indiana JOSEPH P. KENNEDY, III,
BILL FLORES, Texas Massachusetts
MARKWAYNE MULLIN, Oklahoma G.K. BUTTERFIELD, North Carolina
RICHARD HUDSON, North Carolina FRANK PALLONE, Jr., New Jersey (ex
KEVIN CRAMER, North Dakota officio)
TIM WALBERG, Michigan
GREG WALDEN, Oregon (ex officio)
(ii)
C O N T E N T S
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Page
Hon. Pete Olson, a Representative in Congress from the State of
Texas, opening statement....................................... 1
Hon. Bobby L. Rush, a Representative in Congress from the State
of Illinois, opening statement................................. 2
Hon. Richard Hudson, a Representative in Congress from the State
of North Carolina, opening statement........................... 4
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 4
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, prepared statement................................... 223
Witnesses
Terry L. Turpin, Director, Office of Energy Projects, Federal
Energy Regulatory Commission................................... 6
Prepared statement........................................... 8
Answers to submitted questions \1\........................... 336
John Katz, Deputy Associate General Counsel, Office of the
General Counsel, Federal Energy Regulatory Commission.......... 21
Prepared statement........................................... 23
Answers to submitted questions............................... 339
Jeffrey Soth, Legislative and Political Director, International
Union of Operating Engineers................................... 82
Prepared statement........................................... 85
Jeffrey Leahey, Deputy Executive Director, National Hydropower
Association.................................................... 102
Prepared statement........................................... 104
Answers to submitted questions............................... 358
William Robert Irvin, President and Chief Executive Officer,
American Rivers, Inc........................................... 130
Prepared statement........................................... 132
Answers to submitted questions............................... 360
Jennifer Danis, Senior Staff Attorney, Eastern Environmental Law
Center......................................................... 168
Prepared statement........................................... 170
Donald F. Santa, President and Chief Executive Officer,
Interstate Natural Gas Association of America.................. 193
Prepared statement........................................... 195
Andrew Black, President and Chief Executive Officer, Association
of Oil Pipe Lines.............................................. 205
Prepared statement........................................... 207
Submitted Material
Discussion Draft, H.R. ___, the Promoting Hydropower Development
at Existing Non-Powered Dams Act............................... 224
Discussion Draft, H.R. ___, the Promoting Closed-Loop Pumped
Storage Hydropower Act......................................... 232
Discussion Draft, H.R. ___, the Promoting Small Conduit
Hydropower Facilities Act of 2017.............................. 236
Discussion Draft, H.R. ___, the Promoting Interagency
Coordination for Review of Natural Gas Pipelines Act........... 239
----------
\1\ The information has been retained in committee files and also
is available at http://docs.house.gov/meetings/IF/IF03/
20170503/105916/HHRG-115-IF03-Wstate-TurpinT-20170503-
SD071.pdf.
Discussion Draft, H.R. ___, the Promoting Cross-Border Energy
Infrastructure Act............................................. 247
H.R. 1538, the Supporting Home Owner Rights Enforcement Act...... 256
H.R. 446, To extend the deadline for commencement of construction
of a hydroelectric project..................................... 258
H.R. 447, To extend the deadline for commencement of construction
of a hydroelectric project..................................... 260
H.R. 2122, To reinstate and extend the deadline for commencement
of construction of a hydroelectric project..................... 262
Discussion Draft, H.R. ___, the Hydropower Policy Modernization
Act of 2017.................................................... 265
Letter of May 2, 2017, from Thomas R. Kuhn, President, Edison
Electric Institute, to Mr. Upton and Mr. Rush, submitted by Mr.
Olson.......................................................... 293
Letter of May 1, 2017, from Greg Salyer, General Manager, Modesto
Irrigation District, and Casey Hashimoto, General Manager,
Turlock Irrigation District, to Mr. Upton and Mr. Rush,
submitted by Mr. Olson......................................... 294
Letter of April 27, 2017, from Michael S. Webster, Executive
Director, Southern California Public Power Authority, to Mr.
Upton and Mr. Rush, submitted by Mr. Olson..................... 295
Letter of May 2, 2017, from Steve Wright, General Manager, Public
Utility District No. 1 of Chelan County, Washington, to Mr.
Upton and Mr. Rush, submitted by Mr. Olson..................... 296
Letter of April 28, 2017, from James Price, President, Jordan
Hydroelectric Limited Partnership, to Mr. Griffith, submitted
by Mr. Olson................................................... 302
Letter of May 1, 2017, from Jonathan D. Sweet, County
Administrator, County of Pulaski, Virginia, to Mr. Griffith,
submitted by Mr. Olson......................................... 306
Letter of May 2, 2017, from Marco A. Giamberardino, Executive
Director, Government Affairs, National Electrical Contractors
Association, to Mr. Upton and Mr. Rush, submitted by Mr. Olson. 307
Letter of May 3, 2017, from John Grubich, General Manager, Public
Utility District No. 1 of Okanogan County, Washington, to Mr.
Upton and Mr. Rush, submitted by Mr. Olson..................... 308
Letter of May 3, 2017, from Susan N. Kelly, President and Chief
Executive Officer, American Public Power Association, to Mr.
Upton and Mr. Rush, submitted by Mr. Olson..................... 312
Testimony of Kevin Colburn, National Stewardship Director,
American Whitewater, March 15, 2017, submitted by Mr. Olson.... 313
Series of letters collected by the Hydropower Reform Coalition,
dated March 14 to 17, 2017, to Mr. Upton and Mr. Rush,\2\
submitted by Mr. Olson
Letters of May 1, 2017, and July 18, 2016, from James D. Ogsbury,
Executive Director, Western Governors' Association, et al., to
Mr. Walden and Mr. Pallone, submitted by Mr. Olson............. 320
Letter of March 15, 2017, from Linda L. Dahlmeier, Mayor, The
City of Oroville, to Mr. Upton and Mr. Rush, submitted by Mr.
Olson.......................................................... 331
Letter of May 3, 2017, from Thomas O'Keefe, Chair, Hydropower
Reform Coalition, to Mr. Upton and Mr. Rush, submitted by Mr.
Olson.......................................................... 334
Report by FAST-41, ``FY 2016 Annual Report to Congress, Federal
Permitting Improvement Steering Council (FPISC),'' April
2017,\3\ submitted by Mr. Olson
----------
\2\ The information has been retained in committee files and also
is available at http://docs.house.gov/meetings/IF/IF03/
20170503/105916/HHRG-115-IF03-20170503-SD112-U1.pdf.
\3\ The information has been retained in committee files and also
is available at http://docs.house.gov/meetings/IF/IF03/
20170503/105916/HHRG-115-IF03-20170503-SD114.pdf.
LEGISLATION ADDRESSING PIPELINE AND HYDROPOWER INFRASTRUCTURE
MODERNIZATION
----------
WEDNESDAY, MAY 3, 2017
House of Representatives,
Subcommittee on Energy,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:05 a.m., in
Room 2123, Rayburn House Office Building, Hon. Pete Olson (vice
chairman of the subcommittee) presiding.
Members present: Representatives Olson, Barton, Murphy,
Latta, Harper, McKinley, Kinzinger, Griffith, Johnson, Long,
Bucshon, Flores, Mullin, Hudson, Cramer, Walberg, Rush,
McNerney, Peters, Green, Castor, Welch, Tonko, Loebsack,
Schrader, Kennedy, and Pallone (ex officio).
Staff present: Grace Appelbe, Legislative Clerk, Energy/
Environment; Ray Baum, Staff Director; Mike Bloomquist, Deputy
Staff Director; Zack Dareshori, Staff Assistant; Wyatt
Ellertson, Research Associate, Energy/Environment; Adam Fromm,
Director of Outreach and Coalitions; Tom Hassenboehler, Chief
Counsel, Energy/Environment; A.T. Johnston, Senior Policy
Advisor, Energy; Ben Lieberman, Senior Counsel, Energy; Alex
Miller, Video Production Aide and Press Assistant; Brandon
Mooney, Deputy Chief Energy Advisor; Dan Schneider, Press
Secretary; Sam Spector, Policy Coordinator, Oversight and
Investigations; Madeline Vey, Policy Coordinator, Digital
Commerce and Consumer Protection; Jeff Carroll, Minority Staff
Director; David Cwiertny, Minority Energy/Environment Fellow;
Jean Fruci, Minority Policy Advisor, Energy and Environment;
Caitlin Haberman, Minority Professional Staff Member; Rick
Kessler, Minority Senior Advisor and Staff Director, Energy and
Environment; Alexander Ratner, Minority Policy Analyst; Andrew
Souvall, Minority Director of Communications, Member Services,
and Outreach; Tuley Wright, Minority Energy and Environment
Policy Advisor; and C.J. Young, Minority Press Secretary.
Mr. Olson. The Subcommittee on Energy will now come to
order. The Chair now recognizes himself for 5 minutes for an
opening statement.
OPENING STATEMENT OF HON. PETE OLSON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Welcome, everyone. Today the subcommittee will begin to
review bills to modernize pipeline and hydropower
infrastructure. We have 10 bills before us. Some have already
been introduced while others are in discussion forum, but we
already have an extensive record on these issues that these
bills address.
We begin this Congress by picking up where we left off last
year, with hearings on the challenges we face to expand hydro
and pipeline infrastructure. We have heard from job creators,
contractors, labor, Tribal interests, consumers, and private
citizens. Then we will hear from the Federal Energy Regulatory
Commission, otherwise known as FERC, the lead agency for these
reviews.
As we move forward, we will continue to work with the
States and other Federal agencies that have a role to ensure
that we balance the need to modernize our infrastructure with
the important safety, environmental, and consumer protections.
We will also hear from stakeholders, both industry and citizen
groups. I look forward to their input.
I suspect many of these witnesses will tell us what we have
heard for a while now: Getting these projects done has become
an incredibly difficult process. These projects need to be
reviewed and they need to be safe, but once we have done our
due diligence, foot dragging is malpractice. We need to fix
this and get it right. Together, these 10 bills represent the
beginning of an effort to modernize our energy infrastructure,
improve access to affordable and reliable energy, and lower
prices for consumers. I want to thank the witnesses for
appearing today before us and look forward to their testimony.
[The proposed legislation appears at the conclusion of the
hearing.]
Mr. Olson. I now yield to the ranking member, Mr. Rush from
Illinois.
Mr. Rush. Good morning. Thank you, Mr. Chairman.
Mr. Chairman, before I begin, I just want to make a point.
I am really concerned about Chairman Upton and our friend
Representative Long. I understand that he is over at the White
House, and I just wonder, is he OK? Shall we have a moment of
prayer for him or a moment of silence?
Mr. Olson. He is doing just fine. He is OK.
OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Mr. Rush. Well, I want to thank you, Mr. Chairman, for
holding today's hearing on expediting the permitting process
for natural gas pipelines and hydropower projects. Mr.
Chairman, the legislation before us streamlining natural gas
pipelines appears to suffer and to offer a solution in search
of a problem. FERC data shows that between 2009 to 2015 over
100 million natural gas pipeline projects were approved
spanning over 3,700 miles in 35 States for a total capacity of
over 45 billion cubic feet per day, and an overwhelming 91
percent, Mr. Chairman, of applications were decided within 12
months.
More importantly, Mr. Chairman, without a quorum at FERC no
new projects will get approved, so rather than proposing
changes to a process that already works we should be reaching
out to the administration and urging them to submit candidates
for the Commission as well as for the other departments that
are under our jurisdiction that are still waiting to fill
important vacancies.
Mr. Chairman, there may be some areas where we might be
able to find bipartisan support and compromise such as
streamlining the licensing process for hydropower
infrastructure. However, Mr. Chairman, and as the April 27th
letter submitted to you and Chairman Walden from myself,
Ranking Member Pallone, and other colleagues indicated, it is
critical for the subcommittee to hear from other important
stakeholders who will be directly impacted by these changes
including the States, resource agencies, and Native American
Tribes.
Mr. Chairman, I also have concerns with the cross-border
bill which would shift the burden of proof to opponents of a
project to show that the project is not in the public interest.
This bill also limits the scope of review for large
transnational pipelines to only a tiny section of a project
that physically crosses the border no matter how many
communities, States, and properties a pipeline might actually
traverse.
Mr. Chairman, as the recent Oroville Dam failure
demonstrated, expediency must not trump safety. Public comment
and engagement must continue to play a vital part of any
permitting process. So Mr. Chairman, before moving forward on
these bills, many which would make it easier for private
companies to take control of the use of waters belonging to the
people of the United States, it is vital that we hear from
witnesses who can provide expert testimony on how taking
authority away from other agencies and consolidating power and
decision making authority solely within the FERC might impact
the public interest.
Mr. Chairman, I want to thank you and I yield back the
balance of my time. Mr. McNerney, I want to----
Mr. McNerney. I thank the gentleman for yielding. While
there are a number of bills under discussion today, I am going
to focus my remarks on hydropower. We know that worldwide
hydropower generates about six percent of electricity and about
half of the renewable energy generation. Hydropower generation
does not produce carbon emissions. As a Nation we must move
away from harmful fossil fuels and continue to bolster our
renewable and clean energy generation sources if we are to
combat and mitigate the effects of climate change.
We also know that FERC will manage approximately 500
hydropower projects by 2030 that represent about 18,000
megawatts of generation. The current process clearly needs
improvement, so what is it that needs to be done--the
accountability of all stakeholders, timely decisions and the
sharing of information, protection of our Nation's waterways,
habitat, and environment.
Now the Federal Power Act has worked OK in many ways over
the last 90 years, but I have heard from stakeholders over the
entire spectrum that the process could be better. I have heard
from FERC, from the resource agencies, from applicants, from
Tribes, from States, from NGOs and others. I believe that we
can find common ground, but we need to work on a bipartisan
basis to enact real solutions. If one side or the other imposes
its will on the other, the solutions won't work. I yield back.
Mr. Olson. The gentleman yields back. The Chair calls upon
the gentleman from North Carolina, Mr. Hudson, for 3 minutes.
OPENING STATEMENT OF HON. RICHARD HUDSON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NORTH CAROLINA
Mr. Hudson. Thank you, Mr. Olson. I would like to thank
Chairman Upton and Ranking Member Rush for holding today's
hearing on improving America's hydropower systems. This issue
resonates strongly with me because North Carolina has a rich
history of hydropower. Our Catawba River was among the first
rivers to be developed for hydropower. In North Carolina alone
it generates enough electricity to power 350,000 homes each
year.
This low-risk, high-reward technology could provide
significant benefits, yet the potential remains uncaptured in
part because of a prohibitive permitting process. I am pleased
to continue working with my colleagues, Congresswoman DeGette,
on promoting the Small Conduit Hydropower Facilities Act to
build on this committee's successful legislative efforts and
reduce the total review process time for small scale hydropower
by 75 percent, from 60 days down to 15 days. Reducing
regulatory burdens is a common sense way to increase our supply
of clean and affordable electricity.
Thank you again, Mr. Chairman, for including our
legislation on today's agenda. I look forward to working with
you to advance this initiative through the committee, and I
yield back.
Mr. Olson. The gentleman yields back. The Chair now, in the
spirit of bipartisanship, calls on anyone from the Democrat
side for a 3-minute statement like Mr. Hudson.
Oh, I didn't see Mr. Pallone. I am sorry. Five minutes for
the ranking member of the full committee, Mr. Pallone.
OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you. Thank you, Mr. Chairman, for
holding the hearing on the ten bills addressing hydropower and
pipeline infrastructure. Hydroelectric power is among the most
mature generating technologies. It provides virtually carbon-
free base load energy at low cost to our manufacturing sector
and to residential and commercial consumers and hydroelectric
power is an important asset we need to maintain. At the same
time, it has major impacts on fish and wildlife populations,
water quality, water supply management, and other important
physical and cultural resources if poorly operated or cited.
While hydroelectric power licenses depend on rivers for
free fuel, those rivers belong to all Americans not just those
who sell or buy the power generated from it. Hydroelectric
licenses have fixed conditions that generally remain unchanged
during the 30 to 50 years that they are in force. Licenses also
benefit from unlimited automatic annual extensions after their
license has expired if a new license has not been issued and as
a result, the impacts of these hydropower dams often go
unaddressed for more than half a century.
For those facilities first licensed before enactment of the
National Environmental Policy Act, the Clean Water Act, and the
Endangered Species Act in the 1970s, the licensing process
certainly can be quite rigorous. Sometimes the necessity of
addressing these complex issues also makes the process time
consuming and expensive as new license conditions will require
significant upgrades to old facilities to bring them in line
with modern environmental laws and regulations.
So, Mr. Chairman, we want to work with you on hydroelectric
licensing reform with the goal of expediting the process while
maintaining the fundamental principles of balance in the
process and this would allow us to maximize the benefits of
hydroelectric power and expand it where it is most appropriate
to do so.
Our hydro hearing in March was one of the most constructive
we had and that was very encouraging. It was also incomplete
because we did not hear from the other stakeholders who were
central to relicensing. We didn't hear from Federal resource
agencies, States, and Tribes, and this is something Members on
our side feel strongly about, which is why we wrote to you.
And you, Mr. Chairman, and Chairman Walden, last week we
wrote to you requesting a hearing because we understand more
fully the challenges facing the hydropower industry and the
rivers the industry relies upon before we update our policies,
but we also gain a more thorough appreciation of the impacts of
hydroelectric generation on others who use the rivers--Tribes,
fishermen, farmers, boaters, and many more--to ensure their
interests are treated fairly in the process
So I just wanted to turn my attention to the two nonhydro
bills before us today. First, we have a discussion draft that
amends the Natural Gas Act and resembles similar legislation we
saw last Congress as well as proposals in prior years. The
purported goal of the draft is to enhance agency coordination
and speed up FERC's review of natural gas pipelines.
While I think we could all support the idea of making
permitting more efficient generally, this bill like its
predecessors remains a solution in search of a problem. The
fact is that in the last 3 years FERC has approved more
pipelines each year than the one preceding it, with roughly 90
percent of pipeline projects being certificated within 1 year.
And I will admit that, since President Trump took office,
the number of approvals has taken a dive, but that has nothing
to do with the permitting process. Instead, approvals are down
because FERC has lacked a quorum for 3 months and the President
has yet to nominate anyone to any of the three open slots. To
make matters worse, FERC will soon have only one Commissioner
when Commissioner Honorable's term expires at the end of June.
What that means in terms of natural gas projects is that FERC
has not approved a gas pipeline project since February 3rd.
So if the goal of my colleagues on the other side of the
aisle is truly to speed up the FERC approval of gas pipelines,
perhaps they should pick up the phone and ask President Trump
to nominate at least a couple of new FERC Commissioners so they
can begin to consider applications for these projects once
again. Until then, I find any conversation about needing
legislation to expedite pipeline approvals at FERC untimely.
The Cross-Border Energy discussion draft also looks very
similar to legislation we debated at length last Congress. This
proposal eliminates the current presidential permitting process
for energy projects that cross the U.S. border, substituting it
with a weaker environmental review process that in effect
rubber-stamps applications.
With President Trump already approving the Keystone XL
pipeline and signaling support for new pipelines and other
energy projects around the country, it is unclear to me why
Republicans feel it is necessary to strip the President of his
approval authority. Do my colleagues on the other side of the
aisle honestly not have confidence in President Trump to make
rational decisions on major energy projects? While I certainly
have many concerns and would certainly not fault my Republican
friends for any trepidation on their part, I still believe that
this authority should continue to rest with the President of
the United States, regardless of whether his name is Obama or
Trump.
So I want to thank our witnesses for coming today,
particularly Ms. Danis, who is from New Jersey and is here
representing, among others, the New Jersey Conservation
Foundation. Thank you, Mr. Chairman.
Mr. Olson. The gentleman yields back. We now conclude with
Member opening statements. The Chair would like to remind all
Members that, pursuant to the committee rules, all Members'
opening statements will be made part of the record, and I want
to thank our witnesses for being here today and taking your
time to testify before the subcommittee.
Today's hearing will consist of two panels. Each panel of
witnesses will have the opportunity to give an opening
statement followed by a round of questions from the Members.
Once we conclude the first panel, we will take a few minutes to
set up the second panel.
Our first witness panel for today's hearing includes Mr.
Terry Turpin. Mr. Turpin is Director of the Office of Energy
Projects at FERC. And Mr. John Katz. Mr. Katz is a Deputy
Associate General Counsel for the Office of General Counsel at
FERC, as well. We appreciate you being here today. We will
begin by recognizing you, Mr. Turpin, for 5 minutes to give an
opening statement.
STATEMENTS OF TERRY L. TURPIN, DIRECTOR, OFFICE OF ENERGY
PROJECTS, FEDERAL ENERGY REGULATORY COMMISSION, AND JOHN KATZ,
DEPUTY ASSOCIATE GENERAL COUNSEL, OFFICE OF THE GENERAL
COUNSEL, FEDERAL ENERGY REGULATORY COMMISSION
STATEMENT OF TERRY L. TURPIN
Mr. Turpin. Thank you. Good morning, Vice Chairman Olson,
Ranking Member Rush, and members of the subcommittee. My name
is Terry Turpin and I am Director of the Office of Energy
Projects at the Federal Energy Regulatory Commission. The
Office is responsible for taking a lead role in carrying out
the Commission's duties in siting infrastructure projects
including non-Federal hydropower projects, interstate natural
gas facilities, and liquefied natural gas terminals. Thank you
for the opportunity to appear before you to discuss drafts of
the Promoting Interagency Coordination for Review of Natural
Gas Pipelines Act and the Promoting Cross-Border Energy
Infrastructure Act.
As a member of the Commission's staff, the views I express
in my testimony are my own and not necessarily those of the
Commission or any individual Commissioner.
The Commission is responsible under Section 7 of the
Natural Gas Act for authorizing the construction of interstate
natural gas facilities, and under Section 3 of the Natural Gas
Act for authorizing the construction of import/export
facilities. The Commission acts as the lead agency for the
purpose of coordinating all applicable Federal authorizations
and as the lead agency for complying with the National
Environmental Policy Act.
The environmental review is carried out through a process
that allows cooperation from numerous stakeholders including
Federal, State and local agencies, Native Americans, and the
public. In order to maximize the engagement between the
applicant and these various stakeholders, the Commission has
developed its pre-filing review process.
The Commission's current approach allows for a systematic
and collaborative process and has resulted in substantial
additions to the Nation's natural gas infrastructure. Since
2000, the Commission has authorized nearly 18,000 miles of
interstate natural gas pipeline totaling more than 159 billion
cubic feet per day of transportation capacity, over one
trillion cubic feet of interstate natural gas storage, and 23
facility sites for the import or export of LNG.
Over the past 10 years, the Commission has also issued 15
authorizations related to natural gas border crossing
facilities. These results have been facilitated through the
environmental analysis under the National Environmental Policy
Act, which I believe has been improved through the Commission's
approach through the pre-filing review phase of the project.
Regarding the discussion drafts, I note that many of the
comments of previous office directors have been incorporated on
similar past proposals and have been incorporated into these
versions. As I explain in my testimony, the discussion draft on
interagency coordination would alter the Natural Gas Act to
include many of the existing practices the Commission currently
uses successfully in its review process.
The discussion draft addressing cross-border energy
infrastructure would add oil pipeline border crossings to the
Commission's jurisdiction and would remove requirements for
presidential permits for both oil and natural gas border
crossings. Staff already has substantial expertise in analyzing
natural gas pipeline border crossings and this could be
extended to oil crossings under the final rules the Commission
would be required to issue.
This concludes my remarks on the discussion drafts
addressing interagency coordination and cross-border
infrastructure. Commission staff would be happy to provide
technical assistance as you move forward with your
consideration of this legislation. I would be pleased to answer
any questions you may have. Thank you.
[The prepared statement of Mr. Turpin follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT
Mr. Olson. Mr. Turpin, thank you very much.
The Chair now calls upon Mr. Katz. You are recognized now
for 5 minutes for an opening statement.
STATEMENT OF JOHN KATZ
Mr. Katz. Thank you Mr. Chairman, Ranking Member Rush,
members of the committee, it is a pleasure to be here before
you today, and thank you for the invitation to testify. My name
is John Katz. I am a member of the staff of the Federal Energy
Regulatory Commission, and as such my comments represent my own
opinions and not necessarily those of the Commission or of any
individual Commissioner. I am going to focus on the bills that
involve hydro aspects.
The Commission regulates over 1,600 hydro projects which
involve more than 2,500 dams. The projection of these hydro
projects is some 56 gigawatts which is over half of the hydro
capacity of the United States. The United States does a little
bit better than the figure Mr. McNerney quoted for the world,
hydro is eight percent of U.S. capacity.
Hydro is a renewable resource. It affects many other
resources including irrigation, flood control, water supply,
fish and wildlife, and recreation, and these are matters that
Congress has asked the Commission to balance when it issues
licenses. The key thing in getting a hydro project licensed
quickly is probably site selection. This is a matter within the
control of the developers, so good development is what is going
to carry the day not the Government, not the other interested
parties.
The community needs to be involved. Stakeholder involvement
is very key. Issues need to be identified early and developers
need to work with the community and the stakeholders to try and
resolve matters so that things can be done in quick manner. A
good example of this is the 400-megawatt Gordon Butte Project.
It is a pumped storage project in Montana. That project was
licensed in 14 months and the developer of the project recently
appeared at a workshop at the Commission.
And while on the one hand he was very complimentary of the
efforts of Commission staff, he said that the key to getting it
done in time was that the Commission had essentially turned him
loose to allow him to develop a process that worked for him and
his stakeholders, and that is something that the Commission
does on a regular basis.
The Commission does its best to be efficient and effective.
Since 2003, the Commission has issued 82 original licenses, and
of those about 25 percent have been licensed in 2 years or less
with about a 1.4-year median processing time at the Commission.
Congress has done a lot to help the Commission in carrying
out its job. In the 2013 Hydropower Regulatory Efficiency Act,
Congress provided that certain qualifying conduit projects
could be completely exempt from Commission regulation. The
Commission has approved or signed off on 83 of those projects
since then.
Congress also allowed the Commission to consider small
projects at an increased level. They used to be limited to five
megawatts and Congress increased that to ten megawatts. There
have been seven such projects filed since the passage of that
act. Finally, Congress allowed the Commission to extend the
time of preliminary permits which are what an applicant gets to
study a project, and the Commission has approved 57 extensions
or permits since that time.
Commission staff supports the goals of the legislation
before you to the extent that they improve efficiency, enable
the development of new infrastructure, support balanced
decision making, and reduce duplicative oversight. We are
concerned only to the extent that additional bureaucracy would
add to the process. Commission staff and other agencies are not
in my experience looking to do additional processes or things
that will slow down development, but rather want to pare back
these processes to the extent we possibly can.
Finally, I want to note that there are several bills that
provide extensions of the commencement of construction
deadlines for certain projects and those bills are all
consistent with Commission policy. Thank you very much and I
would be happy to answer any questions you may have.
[The prepared statement of Mr. Katz follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT
Mr. Olson. Thank you, Mr. Katz, for your testimony, and we
will now move to the question-and-answer session of the
hearing. I will begin the questioning by recognizing myself for
5 minutes. Again, welcome, Mr. Turpin and Mr. Katz from Texas
22.
I am very concerned about the lack of a quorum at FERC and
the negative impact it could have on pending pipeline projects.
The administration and the Senate have to make this a priority.
My question is how is the Commission handling the workload?
What types of actions have been delegated to staff which
requires sign-off from the Commissioners? Mr. Turpin?
Mr. Turpin. Thank you. The workload in a large part for the
things that are delegated, such as the need for reviews and the
processing of applications, continues unabated. Staff is
working as hard as it ever has even when there was the quorum.
Issues, there are issues related to gas projects where the
offices don't have a lot of delegated authority and staff is
preparing those drafts for consideration when there is a
quorum.
And on the hydro side, there is a bit more delegated
authority and there are more orders and decisions that can be
made on uncontested cases.
Mr. Olson. Thank you, sir. Another question for you, sir,
Mr. Turpin. A few years ago, GAO analyzed major pipeline
projects. They found that you can take up to 2.5 years for a
FERC certificate. It averaged 568 days. Actually that is about
the study in the hearing last Congress.
So if you haven't read the study, the report, recently, I
would like to know even if you haven't, what are the biggest
sources of friction there are for pipeline approval, and number
two, what have you all changed in recent years to make this
process faster?
Mr. Turpin. I haven't read that study. In looking back at
the data for all issuances for the Commission since 2009, on
average it is 88 percent of the projects get issued within 1
year. Of course that encompasses a lot of the projects that are
very small in scope and therefore move faster. The larger and
more complex a project the more time it tends to take just as a
function of the higher number of stakeholders that are engaged
and the more complex issues that are raised.
In terms of what are the points of friction, in general
really it is the development of the information. As Mr. Katz
alluded to with hydro, a site selection on that is a major
determining factor and it is the same for pipelines. The route
selection is a very large factor and which is why the
Commission developed the pre-filing process. It allows the
applicants to come in and engage the stakeholders well before
they have sort of finalized the route to get input on where the
best route may be that addresses all the issues. And that
allows them then, once they do file the application, to move
forward.
But it is the development of that information along the
route as well as the information related to the construction
and design of the facilities that usually are the stumbling
block for the regulating agencies.
Mr. Olson. Thank you. Mr. Katz, I am not going to leave you
out of the questioning. What are the opportunities to expand
the Nation's hydropower capacities, specifically what is the
greatest impediment to installing power generators on
nonpowered dams?
Mr. Katz. I think there are significant opportunities and I
think as you alluded to the greatest opportunities or at least
the simplest opportunities are adding capacity to nonpower dams
including Government dams, those operated by the Bureau of
Reclamation and the Army Corps of Engineers. I think that the
greatest impediment to that are failures to obtain consensus
among the various stakeholders where people are comfortable.
And for example, we have recently licensed a project in
Pennsylvania where everybody was very comfortable with the
project, they felt it was good for the environment and good for
the energy distribution in the area and that was able to go
through very quickly. Where you have stakeholders who are not
comfortable and raise issues, whether it is State agencies,
Federal agencies, or other entities, that can slow down the
process radically.
Mr. Olson. Further question: What types of technologies are
being developed to improve safety, efficiency, and lessen the
environmental impact of hydropower, and what can Congress do to
help further innovation?
Mr. Katz. I am not an engineer, so I am not expert in the
types, but I know there are----
Mr. Olson. Me neither.
Mr. Katz. Mr. Turpin knows more about engineering generally
than I do, but I think Mr. Leahey and perhaps some of the
witnesses who come later may be able to give you more detail.
But I know that there is development ongoing, some of which has
been funded by the Department of Energy to help develop fish-
friendly turbines and other types.
There is one new project that is using what is called the
Archimedes' screw technology which is brand new. Folks have
been looking into wave and tidal energy projects. These are all
new, promising technologies that can continue to be explored.
Mr. Olson. Thank you. My time has expired and I now I call
upon the ranking member of the subcommittee, Mr. Rush, for 5
minutes.
Mr. Rush. I want to thank you, Mr. Chairman. To Mr. Turpin,
a recurring theme in all of these bills is that the
environmental protection concerns are given a backseat in order
to expedite applications for both natural gas pipelines and
hydropower licenses. In your opinion, does FERC staff have the
necessary expertise to determine the scope of environmental
review needed to satisfy NEPA obligations for natural gas
permits?
Mr. Turpin. Thank you. Thank you, sir. I think for the
purposes of determining the Commission's NEPA obligations, yes.
Commission staff is well versed in that. We have a large staff
in the Office of Energy Projects that are archeologists,
engineers, biologists, environmental protection specialists,
and with that staff we can very well do that job for the FERC's
needs.
However, the NEPA, you know, even though NEPA applies to
all Federal agencies, being a process-based statute is the
process we all have to comply with, but different agencies with
other jurisdictions might have different obligations or
jurisdictional coverage and FERC staff is not versed in those
statutes for other agencies.
Mr. Rush. In regards to hydropower licensing does FERC have
any statutory mandate to protect water quality, wildlife, or
access to public lands as in the case for some of the other
agencies that are made subordinate to FERC with this bill?
Mr. Katz. The Commission has the obligation under the Part
1 of the Federal Power Act to consider all aspects of the
public interest. Did I answer your question, sir?
Mr. Rush. No, you didn't.
Mr. Katz. I am sorry.
Mr. Rush. Do you have any statutory mandates?
Mr. Katz. Yes, we do. The Federal Power Act requires the
Commission to consider all aspects of the public interest.
Mr. Rush. All right.
Mr. Turpin, in your opinion, does FERC currently work
effectively with the other agencies throughout the natural gas
application process and would altering FERC's role from one of
collaboration with other agencies to, quote, policeman, end of
quote, role of overseeing and monitoring other agencies'
congressionally mandated duties to improve coordination and
would this result in faster application decisions?
Mr. Turpin. As noted in my testimony, the FERC pre-filing
process is collaborative. We engage a lot of agencies. It is
the whole point of the approach and I think we are very
effective at doing that. Most agencies are very willing to
participate and to engage with staff, but they have their own
resource constraints, they have their own statutes they have to
meet, and it is those that drive their needs more so than the
Commission's schedule that is put out.
Mr. Rush. Well, an extension of that question is are there
ever instances of a natural gas permitting application being
delayed because an applicant has not submitted all of the
necessary information, and if so, how would this legislation
help expedite the process in those cases where agencies are not
provided with timely and complete information necessary to
perform congressionally mandated project reviews? And if you
have any recommendations I would like to hear them in order to
address this issue.
Mr. Turpin. The best thing in terms of generating the
information is the early engagement of all the stakeholders.
The earlier agencies can get involved and define what
information needs they might need for their mandates the
better, because that gives the applicant enough time to go out
and find that info, develop those studies.
So, you know, the pre-filing process allows that. The
legislation encourages that same early engagement and I think
that is the best path forward for trying to address those
issues.
Mr. Rush. Thank you, Mr. Chairman. I yield back.
Mr. Olson. The gentleman yields back. The Chair now calls
upon the gentleman from Ohio, Mr. Latta, for 5 minutes.
Mr. Latta. Well, thanks, Mr. Chairman, and thank you very
much to our witnesses for appearing before us today.
Mr. Katz, if I could ask maybe a follow-up from your
earlier statement. You had mentioned that there was a project
out in Montana, a hydro project, and there is also because of
the area of where it was and with the selection of the site
that I believe that you said that the individual said that they
were turned loose to get this project done.
How often does that happen that folks out there can
actually do something like that? And when they say get turned
loose, how fast can that happen in the permitting and
everything else to get a project done?
Mr. Katz. Sure. It is hard to give an exact time because it
really depends on what information is provided and what the
issues are. What I meant by that was the Commission has three
licensing processes. Two of them, the integrated licensing
process and the traditional license process, have fairly
specific timeframes and details of things you have to do.
There is another process called the alternative licensing
process which allows the stakeholders to essentially set up
their own licensing process the way they want to do it, and the
Commission is always open to allowing people to do that if that
is something that they can agree upon it. In this instance, the
developer was very forward-looking and positive and took the
reins in his own hands and got a lot done very quickly.
Mr. Latta. So how often can somebody do that alternatively?
Is that a very frequent, infrequent?
Mr. Katz. It is less frequent than the other two processes,
but it is always available. I think it is a question of what
the parties think will work best. For example, the traditional
process tends to work best for smaller projects because it sets
forth more exact deadlines but has less of the collaborative,
sort of going out there and meeting and doing a lot of
stakeholder involvement, so it can be less expensive and easier
for smaller projects and those by developers with less funding.
The alternative process, however, can be shaped in any way
that the stakeholders think is appropriate provided that they
give the Commission a complete record at the end of the day.
And in the Gordon Butte case that is exactly what they did.
Mr. Latta. OK. Let me follow up with you again, Mr. Katz.
How did the permitting timelines for hydropower compare to
other types of renewable energy developments such as wind and
solar projects?
Mr. Katz. I think they are significantly longer.
Mr. Latta. Do you believe that the permitting process could
be improved to level that playing field, and how?
Mr. Katz. Absolutely.
Mr. Latta. OK. And how would that be permitted, how would
we level that playing field?
Mr. Katz. I don't have exact prescriptions. I think some of
the things in the legislation before us would go a ways towards
doing that. Whatever we can do to reduce duplication to get
everyone on the same page at the same time will help. What
tends to slow things down are if one agency is not finished at
the same time another agency is or if it feels it needs to do
additional environmental work or other things so that then
things are not sequential, or things are sequential--I am
sorry--rather than being done at the same time to the extent
that it can be one process that is run in an orderly and
efficient manner that will cut down the time.
Mr. Latta. Would you say there is a lot of duplication in
the Federal process then between agencies who have that
duplication?
Mr. Katz. There is some, yes.
Mr. Latta. Let me ask also, not to pick on you, Mr. Katz,
when there are disputes about a potential condition, the
licensing stakeholders are entitled to a trial-type hearings on
the facts and the evidence. It is clear that the current
process under the Federal Power Act has not worked as it has
been intended. It requires so much time, money, and staff
resources it is rarely used if ever. How many types of these
trial-type hearings have been conducted to your knowledge?
Mr. Katz. Again Mr. Leahey may know exactly, I suspect he
does. To my knowledge it is in the area of five or six. It is
not a lot. Those are not conducted before the Commission. To
this point they have been conducted before administrative law
judges designated by the agencies that impose the mandatory
conditions that are the subject of the hearing, so the
Commission doesn't have detailed knowledge about them.
Mr. Latta. When you say five or six, is that five or six a
year or five or six over time?
Mr. Katz. I think total. Again I hesitate to look over at
Mr. Leahey. He will know the number, but it is not a large
number.
Mr. Latta. OK. And then, the Commission is responsible for
assessing whether it would be responsible include conditions in
the project license. Shouldn't the Commission take the lead
with these trial-type hearings?
Mr. Katz. It is possible. The bottom line though is that
those conditions are mandatory and the Commission has no
authority to not include them in the license. So the question
whether the trial-type hearings do anything that the Commission
can act upon at the end of the day, because as long as they are
mandatory whether the trial is at the Commission or not it
doesn't change the result.
Mr. Latta. Thank you very much. And Mr. Chairman, my time
has expired and I yield back.
Mr. Olson. The gentleman yields back. The Chair now calls
upon the gentleman from California, Mr. McNerney, for 5
minutes.
Mr. McNerney. I thank the chairman. Mr. Katz, California
and FERC entered into an Memorandum of Understanding regarding
hydropower. Can you point to any significant benefits that have
resulted from this MOU as it relates to hydropower licensing
and relicensing?
Mr. Katz. I think that the efforts there were made to sort
of process things in a sequential time. I know California has
had budgetary difficulties so that the State agencies have not
had the resources that they would like to be able to devote to
all of the hydropower projects. And the sense, I think, of the
MOU was to get things done in an orderly and sequential
fashion. I think it has done some good in that regard.
Mr. McNerney. So it is mostly to benefit the State
processes?
Mr. Katz. Yes, I think so. I mean, it also, I believe the
MOU called upon to the extent possible for the environmental
reviews of the State and the Commission to be sequential. I am
sorry, I keep saying sequential--to be done at the same time
and California did not have to do extra work at the end of the
day, but ultimately that is a call for the State to make.
Mr. McNerney. OK. You did use the word sequential before,
but you meant concurrent?
Mr. Katz. Exactly, in this instance, yes. Concurrent
reviews are always more efficient than sequential reviews.
Mr. McNerney. So FERC currently attempts to complete
studies on a concurrent basis. The Hydropower Modernization Act
draft language more or less requires concurrent studies prior
to, or concurrent with preparation of the FERC environmental
requirements from the NEPA. Is this a good approach, or what is
the best approach we can take to get concurrent studies?
Mr. Katz. I think it is a reasonable approach. The bottom
line is, however, that both as to State agencies and other
Federal agencies, they have their statutory mandates which they
need to satisfy and there is nothing in the current Federal
Power Act or in the draft legislation that would preclude those
agencies from taking the time they need and from performing
additional reviews if that is what they feel they need to
satisfy their statutory mandates.
Mr. McNerney. So you feel that concurrent requirements
aren't going to throw environmental protections aside or blunt
them to some degree?
Mr. Katz. I did not see anything in the idea of concurrent
reviews that would undercut environmental protection.
Mr. McNerney. Well, what are the areas of improvement under
the integrated licensing process?
Mr. Katz. I am sorry. Could you ask the question again?
Mr. McNerney. What are areas of improvement under the ILP?
Mr. Katz. There is probably a variety of improvements. I
think mainly they involve on the ground aspects rather than
necessarily regulatory or statutory changes. I think getting
people on the same page and getting them to reach agreement on
what sort of studies need to be done and what the work is that
is necessary to develop a full understanding of a hydro project
is key. And in some instances folks reach that agreement and
proceed very quickly and other instances they greatly disagree
and I am not sure that there is really much that can be done by
statute or regulation to force people who have different
statutory authorities to agree.
Mr. McNerney. OK. How often do the licensees have to
utilize the FPA's authority for automatic year-to-year license
extensions?
Mr. Katz. It is not a question of something that a licensee
can use. What the statute provides is that if a license expires
and the Commission has not yet been able to issue a new license
then what is called an annual license is automatically issued,
and I can't give you a percentage. I would be glad to get that
information back if you want it, but it is not unusual.
Mr. McNerney. Moving on, I have heard from a lot of
stakeholders who say that agencies can improve with information
sharing. Could you describe the information sharing process as
it relates to the study process?
Mr. Katz. Sure. I mean the Commission believes in a very
transparent and an open process. There is no secret information
on hydro projects. As studies are done they are filed with the
Commission. They are available to all stakeholders. Often there
are study review meetings under the ILP, for example, where
everybody sits down and goes over the study, discusses its
merits, its demerits, whether there is further information
done. So transparency is an absolute key to the hydro licensing
process.
Mr. McNerney. Well, could there be any value to having
stakeholders support a person to person type manager dedicated
to particular bases throughout the country to facilitate the
processes?
Mr. Katz. I am not certain about that. I would have to know
more about the proposal.
Mr. McNerney. OK, all right. My time has expired, Mr.
Chairman. I will yield back.
Mr. Olson. The gentleman yields back. The Chair now calls
upon the gentleman from Pennsylvania, Dr. Murphy, for 5
minutes.
Mr. Murphy. Thank you, Mr. Chairman.
Mr. Turpin, the Natural Gas Act requires a Commission
review whether a proposed interstate pipeline is necessary or
desirable in the public interest. It also requires the
Commission to set rates charged for interstate pipeline service
to be just and reasonable. So let me ask another area here,
does the Commission take into account jobs and economic impact
as it reviews the public interest?
Mr. Turpin. Well, the criteria that the Commission
considers--and it is a decision by the five, or when there are
five, sitting Commissioners--are laid out in the 1999
certificate policy statement. My office is really focused on
generating the environmental impacts associated with
construction of a project and in gathering the data from the
application that the applicants put forward on----
Mr. Murphy. Are jobs considered at all, impact upon
employment?
Mr. Turpin. I can't say what each individual Commissioner
considers.
Mr. Murphy. What about you?
Mr. Turpin. I don't have a say in that. I generate the
information and I pass--the NEPA document is not a decisional
document.
Mr. Murphy. But in terms of the information generated, you
don't put down impact upon jobs, employment, those things?
Mr. Turpin. In the NEPA document there are socioeconomic
analyses that looks at construction jobs, looks at impacts to
the area for lodging, traffic, for those localized impacts.
Mr. Murphy. OK, thank you. How often has the Commission
used its authority under Section 5 of the Natural Gas Act to
review the rates and require prospective changes when the rates
are no longer just and reasonable?
Mr. Katz. The Commission does not often do that. The
Commission has in recent years proposed to look at a couple of
pipelines under Section 5, but it is not something that occurs
very often.
Mr. Murphy. Why is that?
Mr. Katz. I think the Commission has not seen instances
where pipelines appear to be charging excessive rates.
Certainly if people complain about it and come before the
Commission and say you need to look at this pipeline rate
because it is excessive that is something Commission staff
would look at. As I said that is not Terry and my area of
expertise, but I am not aware that it occurs very often.
Mr. Murphy. Are you aware in your areas of expertise
looking at any of the things of impact, economic impact and
employment issues too?
Mr. Katz. If you are asking me, yes. Terry said yes, the
Commission looks at all the information that is provided to it.
In a case of if information is concerning increased employment,
yes, the Commission would have that information before it to
consider.
Mr. Murphy. If it is there, you are saying?
Mr. Katz. Yes. I mean the Commission is not in the best
position to determine how many people a pipeline company is
going to hire. The company is in the best position to know that
and if it provides that type of information to the Commission
then it is in the record for Commission consideration.
Mr. Murphy. But that is not something you necessarily
request. If they provide, it you have it; if they don't, you
don't?
Mr. Katz. I am not aware of the Commission's specifically
requesting that.
Mr. Murphy. So what I am concerned about here is, of
course, that these are jobs, they are good-paying jobs where
people are building pipelines whether they are the engineers,
the operating engineers, the welders, whatever that might be,
those are pretty valuable jobs that have initial impact upon
employment longer term, I would say, than its maintenance of
the pipeline, but the same thing for hydroelectric power, too.
I mean, we look at those things as important to make sure
we are reviewing those. Well, it is something I believe we
should be looking at as well and hope we can get to that
future. Mr. Chairman, I will hold off on other questions for
now and wait for the next panel. Thank you. I yield back.
Mr. Olson. The gentleman yields back. The Chair now calls
upon the gentleman from California, Mr. Peters, for 5 minutes.
Mr. Peters. Thank you, Mr. Chairman. Thank you very much
for being here. You know, as someone who--one of the reasons I
ran for Congress was to deal with climate change, and I am
excited to be on this committee. I am new to it. I don't
understand why more people on our side of the aisle aren't
flipping out about how long it is taking to do hydro. It is one
base load that is carbon-free and I just, I am interested in
understanding kind of what the obstacles are.
Let me say that one thing that I thought was interesting
about your response to the chairman about what the obstacles
are, Mr. Katz, is that you talked about stakeholders not
environmental issues and that the obstacle was getting
stakeholders to agree. In my mind as a former environmental
attorney that is an extremely subjective kind of standard to
try to reach. It is something that can vary greatly depending
on the group of people you get in the room and it is also
something that has got to scare the heck out of investors who
are looking for some sort of certainty at the end of the day.
I am not going to be able to--I am just really interested
in working the problem, and again I am not going to be able to
do that in my 3 minutes and 49 seconds with you. But I just
would say that it seems to me that maybe we could identify some
more objective criteria so that we protect rivers, we protect
fish and wildlife, but in a way that is more objective and I
think that would help us. Just instinctively it seems to me
that that would help us save some time.
One thing you did say about in reaction to some of the
materials before us is that you are concerned that some of it
would add bureaucracy. And I would like to know now what in
here would actually add to the bureaucracy? What is your
concern that might actually slow us down?
Mr. Katz. Sure. And let me say in addition in response to
your initial comments that I think it is difficult to have
objective environmental criteria since every hydro site is
different, but I agree with you that being as objective as you
can is a good goal. And one of the things in the hydro area is
that there is what we tend to call shared decision making. So
this is not a matter where the Commission gets a hydro
proposal, it reviews it, it approves it or doesn't approve it
and it is done.
There are instances where other Federal agencies have the
right to impose mandatory conditions; the States have the right
to impose mandatory conditions under the Clean Water Act, so
those are the things when I talk about the stakeholders. The
stakeholders include those agencies that have a right to
participate in the proceeding and to affect the ultimate
licensing, and it is really necessary to get them on the same
page to be effective.
Now in terms of the specifics of the act, I would be glad
to work with you and your staff on those in the future. Some of
the things, for example one of the things that struck
Commission staff in looking at these was for the provisions
regarding amendments. And the provisions there seemed to
require for all amendments that there be a schedule established
and perhaps a Memorandum of Understanding undergone, and it has
been Commission staff's experience that 87 percent of
amendments are approved within 6 months because they are
usually minor matters.
So while the provisions regarding the process might very
well be very useful for larger what we call capacity amendments
where someone is greatly increasing the capacity of a project,
they would not necessarily be helpful in terms of the smaller
work. So it is those sorts of things where everything is not
one-size-fits-all, and we would want to be sure that whatever
processes are created will be applied to those proceedings in
which it makes them quicker, but would not be applied to those
proceedings in which it would slow them down.
Mr. Peters. Let me just ask one other specific question. Is
there a way we could speed up the relicensing of existing
facilities that may be wearing out? Is there some reason why
that takes as long as it does?
Mr. Katz. I honestly don't have a magic answer. I don't
know that anyone else does or it would have been done long
since. I know Congress--all of the stakeholders have been
concerned about this for years. I think part of the problem is
just the statutory structure where you need to do a thorough
environmental review and then there are a number of authorities
that have the right to impose conditions.
It is very hard to do a set process. For example, under the
Clean Water Act the Commission can't issue a license unless it
has gotten either a waiver of certification or a certification
from the States. And there are some instances where the
Commission has been completely done its work on a project and
has been sitting for more than a decade waiting for a State to
act under the Clean Water Act and there is just flatly nothing
the Commission can do about that.
Mr. Peters. Great. I understand.
Mr. Katz. Congress could change that if it wanted.
Mr. Peters. I was going to say fortunately we are talking
about statutory authority right here in this room, so you are
probably talking to the right people. And I appreciate the
constraints that the Commission has and your answers have been
very helpful to me.
Mr. Chairman, thanks for the hearing, and I yield back.
Mr. Olson. The gentleman yields back. The Chair now calls
upon the gentleman from Mississippi, Mr. Harper, for 5 minutes.
Mr. Harper. Thank you, Mr. Chairman, and thanks to you both
being here and look forward to additional info on this very
important issue. Mr. Katz, if I can ask you a couple of
questions. You know the ownership and regulatory environment
for hydro is very complex. Where do you see the greatest
opportunities for streamlining the process to improve that
transparency and efficiency?
Mr. Katz. Again, I think that the greatest opportunities
are making all decision making as concurrent as possible. Any
time you get into sequential decision making it slows things
down, often radically slow.
Mr. Harper. OK, can you identify a place or places where
you see the greatest amount of duplicative or unnecessary work,
something that comes to mind?
Mr. Katz. I can't say as sort of an across the board
matter, but some States and some agencies in some cases decide
that they need to do their own environmental review in addition
to what the Commission does and that can take time. Also some
of those entities do not time their decision making so that it
syncs up with when the Commission is ready to act and those
matters can radically delay----
Mr. Harper. So would it help, Mr. Katz, to have FERC act as
a lead agency to maybe issue a schedule and enforce deadlines?
Mr. Katz. The devil is in the details. I mean, the
Commission always is the lead agency and the Commission's
regulations and in giving cases specific orders do set
schedules. It is the enforcing the schedules that is hard. And
that is kind of a two-edged sword, because on the one hand the
Commission might like to be able to say you will hand in your
State authorization by date X; at the same time States have
sovereignty and to the extent that they are told they need to
do something by a certain time, if they feel not ready they
could always deny certification or load up on very burdensome
conditions because they felt they didn't have the time
necessary to do their job. So it is a real difficult chicken-
and-egg problem.
Mr. Harper. And do you wind up with a lot of conflict in
those situations where that happens on a regular occasion?
Mr. Katz. I don't know if it is open conflict. It is more
like the Cold War. I know again, I hate to keep referring to
Mr. Leahey, but I think he will tell you that there are
licensees that are very frustrated because they have done all
that they can and in many instances are satisfied that the
Commission has done all it can, but projects are not ready to
go forward because other entities are not ready to act.
Mr. Harper. And those other entities would be State
entities?
Mr. Katz. Some State entities, sometimes it is other
Federal agencies.
Mr. Harper. OK, which if we were trying to decide between
the two would it be primarily more responsibility on State
agencies or other Federal agencies that you see just in
generalities?
Mr. Katz. That is hard to say. I would suspect that Clean
Water Act certifications are the greatest incidents of delay,
but Endangered Species Act consultation also delays a number of
projects.
Mr. Harper. You know, almost everybody would agree that you
know, hydropower, it is clean, renewable, abundant, and I
believe affordable. What many people don't realize is that it
does also improve the reliability of the electric grid. How
does hydro help integrate intermittent renewables like wind and
solar?
Mr. Katz. Hydro can play a very significant role in doing
that because hydro has what is called black start capacity, so
you can have the hydro sitting there and it turns on instantly
as soon as you let the water flow and turn the turbines. So
when you are pairing it with something like wind, which is
intermittent, it can play a major role in balancing the grid.
Mr. Harper. Well, how about when there is an outage? Does
hydro do the same to bring the grid back on line?
Mr. Katz. Yes, it can serve in that capacity as well.
Mr. Harper. All right. And how does hydro compare to other
energy sources in terms of its environmental impact?
Mr. Katz. That is a subjective matter. But as a general
matter it is carbon neutral so it does not have air quality
impacts. There are those who are concerned about the impacts on
aquatic resources, but with proper management and proper
conditioning hydro can be a very benign resource.
Mr. Harper. So what would you say, Mr. Katz, what the
greatest impediment to attracting capital to invest in new
hydropower projects what would that be?
Mr. Katz. Again that is not my area of expertise so much as
it is the industry, but I would say uncertainty in the time the
licensing process takes.
Mr. Harper. OK, great. With that I will yield back, Mr.
Chairman.
Mr. Olson. The gentleman yields back. The Chair now calls
upon the gentleman from Texas, Mr. Green, for 5 minutes.
Mr. Green. Thank you, Mr. Chairman and Ranking Member. I
want to thank our witnesses for being here.
Mr. Turpin, it is clear from today's hearing that FERC has
a whole lot on your plate and currently, pipelines, LNG
permitting, hydropower, electric reliability all fall under
FERC. In addition, there are many in the House who would like
to expand FERC's permitting authorities to include oil
pipelines. In your position as the director of the Office of
Energy Projects most of these fall within your office.
Mr. Turpin, if FERC receives a request for a natural gas
pipeline permit within the United States, could you please
describe the review process to receive a certificate of public
necessity?
Mr. Turpin. Sure. For a line of any length, if it is
especially complex or a large scope, we would encourage the
applicant to follow the pre-filing process. It is voluntary for
pipelines. During that process, the Commission staff would try
to engage the other agencies and stakeholders.
Mr. Green. What other agencies is it on the Federal level?
Mr. Turpin. Any agencies issuing a Federal permit whether
that is a Federal agency or a State agency, I think, on
federally delegated authority. We would also reach out to State
and local agencies to bring them into the process as well. The
idea is to get as many folks under the tent at the beginning of
the process when the applicant is still trying to design the
route rather than wait, and by that have the greatest influence
on easy changes to accommodate all the issues rather than wait
until the applicant spends a significant amount of time and
money in coming up with a project that then is harder to
change.
So that process at a minimum can take 6 months, but it
really is set by the applicant. As long as they want to stay in
pre-filing they can, and during that pre-filing process staff
would engage in its environmental scoping processes and would
be seeking comment from the public and any interested
stakeholder about what environmental issues need to be
addressed in looking at the project.
Those issues are to be addressed by the applicant in 13
resource reports that must be filed with the Commission. Each
of the reports covers a different resource area such as water
quality or----
Mr. Green. But FERC is responsible for doing the National
Environmental Policy Act enforcement; is that correct, NEPA?
Mr. Turpin. We are the lead agency for constructing the
NEPA document. Yes, sir.
Mr. Green. OK. What about when it crosses a U.S. border--
Mexico, Canada?
Mr. Turpin. It is the same. Pre-filing likely would not be
used in those cases because they are usually smaller scope
projects.
Mr. Green. Does FERC coordinate with the Department of
State or Department of Defense when issuing a cross-border
natural gas pipeline?
Mr. Turpin. Currently, yes. The Commission reaches out to
both of those agencies to get their concurrence that there is
not a national security interest.
Mr. Green. If FERC were granted the authority to permit oil
pipelines would the Commission follow similar procedures?
Mr. Turpin. I think that would be determined by the
Commission. They will have to set the policies that my office
would follow. We do have the existing program that we do for
natural gas, so, you know, a good guess is that it would
parallel that but again that would be set by the Commission.
Mr. Green. Does the Office of Energy Projects possess the
resources to handle that additional responsibility and
activity, and do you anticipate additional needs if you
permitted oil pipelines?
Mr. Turpin. We do have the expertise. We do have the staff.
There haven't been a tremendous amount of those border
crossings. As I said in my testimony, I think over the last 10
years, we have done 15. I had staff look at potentially how
many oil crossings there might be. I think we found there is
somewhere in the neighborhood of 20 to 30 existing ones. So I
don't think it is a tremendous workload. I think we would have
to have some additional expertise for the unique aspects that
are different from natural gas lines.
Mr. Green. Oftentimes that oil pipeline is in the same
easement that a natural gas pipeline or some other product.
Mr. Katz, connected action has been legally defined as an
action that is interdependent parts of a larger action. Mr.
Katz, under NEPA regulations FERC is required to review
connected actions of a pipeline project; is that correct?
Mr. Katz. That is correct.
Mr. Green. If a cross-border pipeline project cannot
proceed without a certificate of crossing as described in the
legislation would FERC consider this a connected action?
Mr. Katz. Connected to what, sir?
Mr. Green. If a cross-border pipeline project cannot
proceed without a certificate of crossing as described in this
legislation we are considering, would FERC consider this a
connected action?
Mr. Katz. It could be a connected action to the remainder
of the oil pipeline, yes.
Mr. Green. Is FERC required to consider the cumulative
impacts of a pipeline project?
Mr. Katz. Yes, it is, of all projects it reviews.
Mr. Green. OK. I am out of time, and thank you, Mr.
Chairman. But obviously coming from Texas we are trying to sell
as much natural gas as we can to northern Mexico and I know
there are processes now that are in place, but again crossing
the international borders presents other issues and that is
what this legislation is about. Thank you, Mr. Chairman.
Mr. Olson. The gentleman's time has expired. The Chair now
calls upon the gentleman from West Virginia, Mr. McKinley, for
5 minutes.
Mr. McKinley. Thank you very much, Mr. Chairman, for
scheduling this meeting.
Mr. Katz, if I could go quickly with you because I want to
spend more time with Mr. Turpin, but do you think, in your
opinion, with the H.R. 446, 447, and 2122 that we are going to
be talking about today for the construction of hydroelectric
projects in Virginia and West Virginia, do you think the
Commission has any problem with getting additional flexibility
so that it doesn't take an act of Congress?
Mr. Katz. No. One of the bills before you indeed would give
the Commission the authority to extend the commencement of
construction deadline and I think I indicated in my testimony
that Commission staff supports that concept.
Mr. McKinley. Thank you.
Mr. Turpin, I want to take a larger view, maybe perhaps
take it from 30,000 feet on this issue of permitting because I
know from the testimony and what we have read that FERC has a
responsibility to coordinate these projects in the timeline,
but the agencies often break from the mold and so it drags out.
I am trying to understand if we are moving in the right
direction with this, because if we look back over it now, over
time we have developed now there are 15 different permits have
to be achieved to build a pipeline from ten different agencies
and the timeline for each of those agencies can be as long as 2
years or longer if they should so choose to do that.
But we are talking just of those we have the FERC
transporter, the FERC certificate of public convenience, the
Pipeline and Hazardous Materials Safety Administration permit,
NEPA, an EPA permit, the Army Corps dredge permit, the Section
10 permit, the right of way permit for the Army Corps, the
Federal levy right of way permit, the Fish and Wildlife
incidental take permit, the Fish and Wildlife right of way, the
Bureau of Land Management right of way, the Bureau of Indian
Affairs right of way, the U.S. Forest Service public use
permit, the U.S. Department of Agriculture easement, the Bureau
of Land Reclamation, all of these I guess what I am wondering,
are we really better off for having these permits? Because we
look back at the track record when they built Hoover Dam, the
permitting was less than 2 years to accomplish and I wonder
whether or not did we cause havoc to the people in Colorado and
along the Colorado River by building the Hoover Dam?
The Alaska Pipeline now have been 9 years trying to get a
permit, because in addition to these 15 permits we have seen
politics come into play with this. The Trans-Alaska Pipeline as
controversial as that might be it took less than 1 year to get
the permit and now we have the advantages that occurred.
So I am saying with all this progress or process of
additional paperwork, are we better off for it? Can you tell me
from FERC that this is--we have improved the system by delaying
projects for 10, 15 years to do this? Think what I just said
about the Hoover Dam. The permit was less than 2 years, but for
10 years we are trying to build a low-head dam in West Virginia
and we can't get the permit, after 10 years. Who is right? Were
the people back in the '40s and '50s and '60s and '70s, were
they smarter than we are? That is to you, Mr. Turpin.
Mr. Turpin. Thanks. I think a lot of that depends on the
perspective. I mean all these agencies, all those permits, many
of which you read are actually crossing of Federal lands and
that is the easement that the pipeline company must get, all
have come about through congressional action. I think it is
whatever, you know, Congress directs these agencies on what
they need to execute and we execute on what we are told to do.
Mr. McKinley. So in your opinion, Mr. Turpin, are we moving
in the right--I am sorry to keep--are we moving in the right
direction by adding delays, because you know from
construction--I spent 50 years in the private sector--delays
cost money. The time value of money when you start something
that maybe takes $10 million, even they are saying the
licensing process for a new hydropower development project can
last over a decade and would cost over tens of millions of
dollars.
Are we better off for doing it that way or should we rely
on the courts to see that they are upheld and let the
construction begin? Because if we are truly after construction
and we are trying to get jobs for people, wouldn't it be better
to put them to work or to use paperwork? Who is benefiting from
this, the unelected bureaucrats in Washington?
Mr. Turpin. It sort of doesn't feel like a benefit to us. I
think the answer is that it depends on what Congress determines
is in the public interest. I mean the bureaucrats have to
execute the laws that are passed.
Mr. McKinley. Thank you very much. I yield back my time.
Mr. Olson. The gentleman yields back. The Chair now calls
upon the star center fielder of the Congressional Women's
Softball Team, Ms. Castor, for 5 minutes.
Ms. Castor. That is right, the third week in June, the
Congressional Women's Softball game against the evil women of
the Press Corps. Mark it down on your calendars.
Thank you, Mr. Chairman, for calling the hearing today. One
of the bills before us today aims to expedite FERC review of
natural gas pipelines. Roughly 90 percent of FERC natural gas
pipeline projects receive their certificate within 1 year, but
nevertheless I do understand that it is important to promote
efficiency in all Government review processes.
But this is why just a year and a half ago the Congress
passed an important part of the FAST Act, and I had to go back
and remind myself of all this and I encourage my colleagues to
do the same. The FAST Act set up a new entity, the Federal
Permitting Improvement Steering Council, FPISC, to bring
Federal agencies together including many that have been
mentioned today--the Army Corps of Engineers, the Bureau of
Land Management, Fish and Wildlife--to improve timeliness,
predictability, and transparency of Federal environmental
review and authorization projects for major infrastructure
projects which includes interstate natural gas pipelines.
The Council spent 2016 getting off the ground and is now
overseeing permitting for 32 major infrastructure projects
including seven interstate natural gas pipeline projects. These
projects will benefit from enhanced coordination including
establishment of a lead agency for the project, the
establishment of recommended performance schedules and project
review timelines and greater transparency at all levels. In
fact, the Business Roundtable just wrote a letter recently to
the White House to say can we move forward with getting FPISC
off and moving; I think it is still waiting for another
appointment.
So it is a bit confounding why we are here discussing an
entirely new scheme for review of natural gas pipelines when we
recently sent up an entirely new entity to do just that. And at
a minimum we should have FPISC here to testify about their
progress and I would respectfully request that we do that in a
future hearing.
So Mr. Turpin, in your testimony you state that FERC has
undertaken significant efforts to implement its
responsibilities under the FAST Act. Can you elaborate a bit on
your efforts?
Mr. Turpin. Sure. When the FAST Act, I think within 6
months of its passage all the subject agencies had to post
existing projects. For FERC I think we had the most significant
number of projects that went up on the dashboard. And most of
the efforts were at that point those projects had been through
the FERC pre-filing process, had already had a lot of the
coordination and FERC was the lead agency for those.
So a lot of that effort was at going back to document the
things we had already done and put up coordinated project plans
not as sort of a prospective plan but as a historical, you
know, acknowledgment of the things that the agency has already
been through. We found that it did take a lot of time to
coordinate the various agencies' data, some agencies would be
unwilling to commit to schedules, and it does take quite a bit
to kind of ride herd on the data that has to get posted. So
that is the bulk of the work that we did in trying to set up.
Ms. Castor. So do you think it will help now when you have
this interagency coordination when everyone is sitting at the
table and maybe some agencies can look at others and say why
aren't you adhering to the schedule and timeline?
Mr. Turpin. And that is essentially what I think we have
tried to do through the pre-filing process as well. I mean, as
the lead agency we try to bring those folks to the table and
try to get them the information they need so that they can
advise us of the schedule they need.
Ms. Castor. And you also state that some of the provisions
in the discussion draft would duplicate efforts. How so?
Mr. Turpin. That is predominantly the tracking of
everyone's project schedules. I mean that is what happens on
the FPISC dashboard and then it would be a duplicate effort at
the Commission.
Ms. Castor. Well, it is clear we need to hear more from
FPISC to understand what it has achieved in the year-plus that
it has been in operation already and I fear that we are simply
setting up a duplicative process with this proposal, so I have
serious concerns with the discussion draft today. I think we
need to have FPISC here. And remember, this is only a year and
a half old and it was the Congress' intention to promote
greater efficiency by bringing that interagency group together.
I yield back my time.
Mr. Olson. The gentlelady yields back. The Chair calls upon
the gentleman from Virginia, Mr. Griffith, for 5 minutes.
Mr. Griffith. Thank you very much, Mr. Chairman. I do
appreciate it and I appreciate the witnesses being here.
Mr. Katz, I was pleased to read in your testimony and then
to hear in one of the earlier questions that you all are fine
with H.R. 446 related to the Gathright Dam and H.R. 447 related
to the Flannagan Dam and I appreciate that very much. Thank
you. I am also interested in, you know, not only electric
generation but making sure that we have jobs in my district.
One of the great concerns in the coalfields has been is that
production has been down and folks have said you all need to
reinvent yourselves. We think coal has a long future, but at
the same time we want to make sure that we are looking for new
ways.
A couple of my friends in the Virginia General Assembly got
a bill passed this last year. I had mentioned in a previous
hearing that there were some folks interested in doing some
things related to pump storage projects and what they are
trying to encourage with the Virginia language is to see if
they can't entice somebody into putting a pump storage facility
inside an exhausted or abandoned coal mine making it a closed
loop system.
And I appreciate your written testimony on those issues as
well. One of the questions that you raised and I would like for
you just to do some explaining for me, is you felt like there
was because of the add-ons or, and I am probably using the
wrong language, but the additional energy items like solar or
wind to help pump the water up that there was a problem in the
draft language that we have floating around, at least the way I
interpreted it, with municipals, maybe adding on nonmunicipals.
Could you explain that to me?
Mr. Katz. Sure. It is kind of a historical artifact, but
years ago back in the '80s there were instances before the
Commission--well, I should----
Mr. Griffith. Way back in the '80s.
Mr. Katz. Yes, when I was a youngster. I guess I should
drop back five yards. I mean, in the Federal Power Act,
Congress provided that a municipality would get a preference
over a private entity in obtaining a preliminary permit or a
license. So if they--all things being equal, if a city applies
and a private company applies, the city wins.
And at some point in the '80s, the Commission discovered
that municipalities were applying and saying I am a muni, give
me preference, but then as soon as they got the license or the
permit or even during the process they would turn around and
sell it to another private entity, not the one that was trying
to compete with them but somebody else. And so the Commission
decided that was not fair competition and it was not
appropriate to put private entities at a disadvantage.
So the concern that I expressed with regard to that portion
of the bill was it would appear to allow a municipality to
outcompete a private entity in the first instance, and then do
what the Commission has hitherto precluded agencies from doing,
turn around and sell it to a different private entity so that
the private entity that was trying to develop the project, and
indeed it might have been the entity that was out there in the
field first, would be placed at a disadvantage. That is
something for Congress to consider.
Mr. Griffith. OK, and I appreciate that. And so it is not
really a concern over this closed loop pump storage, but a
concern that that and then perhaps the solar, the wind might be
transferred as you just described; is that correct?
Mr. Katz. Yes. It is not specific to closed loop, it is
just that is, I believe, the only one of the bills in which
that language appears so that is why I raised it in the
context. But no, it is not something that is in the nature of
closed loop pump storage projects.
Mr. Griffith. And otherwise in regard to the draft language
on closed loop hydro pump storage you all feel fairly
comfortable that we are headed in the right direction on that?
Mr. Katz. I think it has a lot to commend it. Again we
would be happy to work with committee staff just to make sure
that there are no duplicative areas or things put into the
statute that make things take longer or are repetitive other
agency actions.
Mr. Griffith. Because as some of the other witnesses on
both sides of the aisle have pointed out, you know, when you
are using hydro that is a very clean source of energy. In the
case of using a captive water source inside of an abandoned
mine, you really don't have a whole lot of problems as long as
initially it is structurally sound of course. But we believe
that we have a number of those sites in southwest Virginia,
maybe some in my friend Mr. McKinley's district over in West
Virginia as well.
But we believe that this is one way that we can continue
our region's longstanding history working in energy and at the
same times create jobs in a field and an area where jobs have
disappeared as a result of some downturns in the economy and
some regulations that we are going to try to work on.
Mr. Katz. Yes, if I may, I will say----
Mr. Griffith. Yes, please.
Mr. Katz [continuing]. The Commission approved a project of
that type in California, the Eagle Crest Pump Storage Project,
of which is using an abandoned mine and is currently under
development, so those kinds of things can indeed make sense.
Mr. Griffith. All right, I appreciate it very much and I
see my time is gone. I yield back.
Mr. Olson. The gentleman yields back. The Chair calls upon
the gentleman from New York, Mr. Tonko, for 5 minutes.
Mr. Tonko. Thank you, Mr. Chair. Mr. Turpin, welcome. I
have a few questions concerning the interagency coordination
discussion draft. Do you believe that aerial or remote surveys
have limitations?
Mr. Turpin. At this time, I do. I think, you know, the
Commission and its staff has had a long history of accepting
remote data in terms of looking at the initial environmental
impacts, but then they need to be truthed up, you know, after
an authorization before construction can start. There just
simply are limitations. You can't always count on that to get
the species counts. There are certain kinds of wetlands that
aren't able to be delineated aerially.
Mr. Tonko. Thank you. And can aerial survey data be
unreliable regarding the presence of endangered species,
historic properties such as archeological sites and
characterization of wetlands?
Mr. Turpin. Yes.
Mr. Tonko. OK. Does the draft before us include any
standards or methodology requirements that must be met in order
for an agency to be required to consider data from remote
surveys?
Mr. Turpin. No. I did not see anything about minimum
standards.
Mr. Tonko. OK, thank you. And so there would be no quality
control requirements that might consider the degree of
accuracy, of scale, of elevation, of vegetation strata and
density, soil profiles, or many other factors that could vary
widely depending on the geographic region and methodology
deployed in that survey?
Mr. Turpin. Again, I saw nothing of that in the bill and I
took that to mean that that would be left up to the individual
agencies.
Mr. Tonko. Does this discussion draft require applicants to
attempt to conduct ground surveying before using remote
surveying?
Mr. Turpin. Not that I read, sir.
Mr. Tonko. And in which case applicants would not be
required to make a good faith attempt to gain access to perhaps
private property owners' land and in so doing help to make an
important stakeholder aware that this project is being
developed potentially through their property. There may be
streamlining we can consider in the application process, but I
really do believe that any attempts to skirt the rights of
landowners especially when the outcome is less than perfect
data would be a step in the wrong direction. Is that a concern
that I should have?
Mr. Turpin. I think the Commission's stance in the past has
been that the best course of action is to get the best
available data for the NEPA analysis. And the Commission has
encouraged the pipeline companies to go out and actually seek,
you know, pipeline right of way access to develop that data.
But if it can't be achieved, then Commission staff has relied
on remote and aerial data.
Mr. Tonko. I would also recommend that the committee
receive more feedback on this provision from other Federal and
State agencies to understand how inadequate data might affect
their review process and the associated regulatory
requirements.
Mr. Turpin, in your testimony you state the Commission's
current review processes are thorough, efficient, and have
resulted in the timely approval of the facilities necessary for
natural gas pipelines. Generally speaking, how long does it
typically take for a pipeline permitting process or permitting
application to go through FERC's process?
Mr. Turpin. It can vary pretty widely, so there is not a
really great typical time. As I mentioned earlier, for the full
spectrum of projects filed at the Commission for pipelines 88
percent of them are issued within 1 year and that does go from
very small projects. Usually, once you begin to increase the
length of the line and the complexity of the project, the time
does tend to stretch out because there are simply more
stakeholders engaged, more issues to consider, and more
agencies to have at the table.
Mr. Tonko. But in general within a year?
Mr. Turpin. Eighty-eight percent within a year. Yes, sir.
Mr. Tonko. Which seems to be, you know, given the
importance of the review seems to be a fairly expedited process
done thoroughly. So with that Mr. Chair, I will yield back.
Mr. Olson. The gentleman yields back. The Chair calls upon
the gentleman from Ohio, Mr. Johnson, for 5 minutes.
Mr. Johnson. Thank you, Mr. Chairman. And gentlemen, thank
you for joining our panel this morning.
Mr. Katz, this committee received testimony some time back
from a developer that had difficulty with a project on an
existing nonpowered dam under the Army Corps of Engineers'
jurisdiction. Apparently, they had to perform two separate NEPA
analyses, one for the FERC license and a separate analysis
triggered by the Clean Water Act for the Army Corps. I
understand that you have an MOU with the Army Corps, but what
could FERC do to prevent this type of duplicative application
of NEPA in the future?
Mr. Katz. Well, sorry to give this answer, but ultimately
there is not anything we can do, we don't control the Corps.
But as you noted we have----
Mr. Johnson. Your MOU doesn't address that, that kind of
collaboration?
Mr. Katz. Yes, the MOU does. The MOU seeks to have the
Corps and the Commission act concurrently to the extent
possible and that is as far as we have gone. But as a legal
matter we have no authority over the Corps, so if the Corps
decides it needs to do more environmental work we can't prevent
that.
We also have a number of instances in which we have issued
licenses for projects at Corps dams and the Corps decides it
needs to take a certain amount of time whether it is to review
the physical characteristics of the dam or to issue permits
such as the ones that you refer to and the Commission does not
have any authority to do anything about that.
Mr. Johnson. Do you have a personal opinion as to the waste
and the duplication of having both the Army Corps and FERC
requiring NEPA studies on the same project?
Mr. Katz. My opinion is that agencies do need the studies
they need in order to carry out their statutory mandates, but I
don't think there should be duplicative studies and ideally
they would be done concurrently so that there is as little use
of time as possible.
Mr. Johnson. Now you would think that if you did one you
could use the same application for both agencies and do it one
time. I mean, I am a plowboy so common sense kind of reigns----
Mr. Katz. Yes. That would be hoped. And often the Corps is
a cooperating agency with the FERC when FERC does its NEPA
document and then the Commission can do its best to make sure
that everything is in the NEPA document that the Corps might
need.
Mr. Johnson. All right. I understand that one important
project parameter left unresolved until very late in the
permitting process is the water quality standard, which as you
know determines the amount of water that will ultimately be
available to pass through the turbines in a dam, a power dam.
Currently, the Corps may prescribe different water quality
standards from the FERC and the State standards, beginning in
some cases in the 6th or 7th year of the Federal permitting
process. This can cause significant problems from both a
commercial and a planning perspective.
Would you care to comment on this issue? Is that part and
parcel of the same kind of deal we are dealing with, with the
NEPA analyses?
Mr. Katz. It may be to some extent. I think that those
issues only arise where a project is located at a Corps dam.
The Corps can't prescribe water quality standards if it is at a
non-Corps dam. But yes, if a project is at a Corps dam, the
Corps essentially has the ability to require the licensee to do
whatever it is that the Corps sees fit to do.
Mr. Johnson. Having the ability is one thing, but this is
another example of duplication and in my opinion it appears to
be Government waste and wasting the time of the businesses and
those that are trying to get these projects done; would you
agree?
Mr. Katz. It can be. Our experience is that different Corps
districts behave different ways. Some Corps districts are very
welcoming to hydro and try and do everything they can to
promote hydro being built at Corps dam. Other districts don't
seem to favor hydro at their dams.
Mr. Johnson. That is kind of--I appreciate that comment.
Different Corps districts behave in different ways. Wouldn't it
be great if they all were kind of talking to one another and
doing things the same way?
Mr. Katz. Yes, I think it would. I mean, one of the things
FERC is lucky about is that we are a small agency, so if the
chairman wants to know what I am up to she can walk down the
hall and look me in the eye as opposed to I am located out in,
you know, some far region of the country. And I think it is
harder for folks in Corps headquarters to control all their
aspects.
Mr. Johnson. OK. Lastly, for how many licenses issued or
pending before the Commission has the FERC and the Army Corps
MOU been employed to unify the NEPA review process, and how
many of those instances has the Corps used a FERC generated
NEPA review when approving a project? So has there been any
crossover that you can recall where one agency used a NEPA from
the other?
Mr. Katz. There certainly have been in the past prior to
the MOU. The MOU is fairly recent so I am not certain whether
it has come into play in any cases where we have actually
issued licenses.
Mr. Johnson. Can you provide us with the language around
the NEPA analyses that is in the MOU? I would like to see that.
I would like to see how much discussion actually went into it.
Mr. Chairman, I yield back.
Mr. Katz. Yes, I would be happy to do that and we also can
let you know if there are any instances in which the MOU has
been applied.
Mr. Johnson. Thank you very much.
Mr. Walberg [presiding]. Thank you. The gentleman's time
has expired. I now recognize the gentleman from Oregon, Mr.
Schrader.
Mr. Schrader. Thank you very much, Mr. Chairman. I
appreciate that.
I guess, Mr. Turpin, Mr. Katz and others have talked about
the concurrent review process. Do you have any, see any
problems particularly with accelerating a more concurrent
review process by all the different agencies?
Mr. Turpin. No. Concurrent reviews are what is desired. I
think the rub becomes if the information needed by those other
agencies can be developed at the same time as we are doing our
review.
Mr. Schrader. That would hopefully be established whatever
process would be set up to begin with. The States would be an
outlier though as I understand. They are not subject to any
Federal regulatory authority in terms of when they get their
act together and decide to approve something?
Mr. Turpin. The States that are acting under--it is their
own authority would be preempted by the Federal permits, but
the State agencies acting on federally delegated authority for
Federal permits carry the same weight as the Feds.
Mr. Schrader. So that is something we will have to figure
out going forward it looks like.
Mr. Katz, do you agree that the bill dealing with cross-
border approvals, the new cross-border approval process that is
being suggested combines the permit process to just the segment
on the border and doesn't allow any discussion of the entire
project?
Mr. Katz. I am not certain that it does that. The
Commission would have to do whatever NEPA review is
appropriate, and I don't think that the bill precludes the
Commission from looking at other impacts.
Mr. Schrader. OK, OK. That would be my read of the bill
actually, also. While the bill says there is no cross-border
review for modifications of an existing cross-border facility,
with regard to cross-border authority are there other agencies
or regulatory authorities and permitting processes that someone
trying to modify a facility would need to abide by?
Mr. Katz. I am not aware of any. I defer to Mr. Turpin.
DOE, if there is a change in the commodity level DOE might have
to approve it, but again I defer to Mr. Turpin for a further
discussion.
Mr. Turpin. It is going to depend on what equipment is
needed for that modification. If it is a compressor station for
the case of a natural gas pipeline it will have to comply with
the Clean Air Act. I don't know enough about pump stations for
liquid lines because we don't currently deal with those.
Mr. Schrader. What about an expansion of the footprint of
the facility?
Mr. Turpin. That again it would depend on what exactly the
equipment is being installed as to if there would be Federal
oversight or not.
Mr. Schrader. OK, but not any additional land being taken
into the facility would not be an issue then. It is just the
type of equipment that would be there?
Mr. Turpin. I mean current, it is usually the installation
of additional features and increasing the footprint that drive
most of the environmental issues.
Mr. Schrader. OK. Then there is a 30-day approval, you
know, deadline for export-import of natural gas cross-border.
Do you see that hampering public input or the ability to get
the permitting process done, the approval process?
Mr. Turpin. As I read the bill the 30 days was applicable
to the DOE commodity determination and so I don't think that
would affect the FERC process.
Mr. Schrader. All right, very good.
Mr. Katz, in the legislation about promoting hydro
development in existing nonpowered dams I am not that familiar
with some of the current regulatory framework. It is being
proposed to switch to that which is necessary to protect public
safety or reasonable economic feasibility and prevent damage to
fish and wildlife. How is that language different than what the
current regulatory authority is?
Mr. Katz. The language is different to the extent that it
could be read to preclude the Commission's considering some
other resources that it now considers like flood control,
irrigation, recreation, historic preservation. The standard is
also different. The standard as I read the bill was that
measures had to be economic and essential for fish and wildlife
and that is a higher bar than currently exists.
Mr. Schrader. OK, very, very good. And with that I will
yield back, Mr. Chairman. Thank you.
Mr. Walberg. I thank the gentleman and I recognize the
gentleman from Texas, Mr. Barton.
Mr. Barton. Thank you. We have out in the audience, Mr.
Chairman, Andy Black. Andy Black is a former personal staffer
of mine and a former staffer of the committee and also former
senior official over at FERC, and he just lost his dad and I
think just got back from the funeral yesterday. So half of the
committee and me personally we are with you in your time of
sorrow. I never met your father, but I heard nothing but great
things about him. So, and we look forward to your testimony on
the next panel.
Mr. Chairman, I just have a couple of questions. Under
current law we handle permitting for oil pipelines domestically
and gas pipelines differently. Is there any real reason to do
that other than that is the way we have always done it?
Mr. Katz. I am not sure if that was addressed to me, but
no, not particularly. I mean, the same thing is true with
electric power lines. Congress sets up whatever scheme of
regulation it sees fit to do.
Mr. Barton. So it is just kind of the way it happened, but
if we are going to do a pipeline reform bill is there any
reason we couldn't use the same regulatory authority and
permitting process for oil and gas pipelines?
Mr. Katz. No, Congress has the authority to do that if it
wishes.
Mr. Barton. Good. In the Energy Policy Act back in 2005, we
tried to give your agency, the FERC, the authority to oversee
the various other agencies it had to do all the various
pipelines that Mr. McKinley was talking about earlier. That
doesn't seem to have worked too well, the delays have gone up
not down. What went wrong and what do we do to fix it? Do we
need more incentives or do we need more penalties or do we just
need better people at the FERC? What is going on? You don't
think the latter is the case.
Mr. Katz. I would never want to say that our
Commissioners--the staff is less than perfect, but the
Commissioners are perfect. I don't know that there is anything
that Congress did wrong in the bill. I think that what has
happened since then--and I will defer to Mr. Turpin if he wants
to speak to it--is that there has been an increasing emphasis
on public interest in the pipelines and opposition to
pipelines, concerns about environmental effects, you know, the
type of production methods that are used, so that back in the
day pipeline regulation approval was a fairly sleepy part of
the Commission's business.
Now it is something that a lot of people are interested in
and very vocal about, and I think that is more what is taking
more time than anything that Congress is responsible for having
done.
Mr. Barton. Mr. Turpin?
Mr. Turpin. I would agree. I would also say staff is pretty
good too. But I think that is a large part of it is the
increased public interest, I mean from a very wide audience in
the U.S. And as with the current approach, fundamentally the
Commission can engage these agencies. The Commission staff can
do the work, but all these agencies have to comply with their
own congressionally directed mandates and it is that sort of
not that I think ends up, we all end up tripping over.
Mr. Barton. Well, I am not the chairman of the committee, I
am the vice chairman, but I think we are going to do a pipeline
permitting reform bill and we would really like your agency's
input. I think it is good to have more public input. I don't
think that is a bad thing, I think that is a good thing.
But having said that you still need, once you get that
input you need to make a decision. You need to live within the
guidelines. You need to live within the deadlines. If our
deadlines are too strict maybe we need to expand them a little
bit.
But we are going to need a lot more energy infrastructure
in the next 20 to 30 years and pipelines are going to be a big
part of that. And so if we didn't quite get it right 10 or 15
years ago in the Energy Policy Act of 2005, let's get it right
this time in the Energy Infrastructure Review Act of 2017 or
2018. With that Mr. Chairman, I yield back.
Mr. Walberg. I thank the gentleman and I recognize the
gentleman from Indiana, Mr. Bucshon.
Mr. Bucshon. Thank you, Mr. Chairman.
Mr. Katz, in my district and nearby there are multiple dams
that currently don't produce hydropower but potentially could,
as you are aware. In 2013, Congress directed FERC to
investigate the feasibility of a 2-year licensing process and
develop criteria for nonpowered dams and closed loop pump
storage.
I guess you had a pretty good experience at the Kentucky
Lock and Dam project, and what elements of a 2-year pilot
program should Congress make permanent based on FERC's
experience with the 2-year pilot?
Mr. Katz. I don't want to get ahead of the Commission staff
because we are right now compiling a report that Congress
directed us to do in the 2013 statute.
Mr. Bucshon. OK, so we have to wait for the report.
Mr. Katz. Yes. As I said earlier though, even in the
absence of any kind of regulatory or statutory changes, some 25
percent of the original licenses that the Commission worked on
in the last 13 years or so have been permitted in 2 years or
less, so it can happen.
Mr. Bucshon. Understood. And for these two type of
projects, would these type of projects raise the same
environmental and wildlife issues as traditional hydro or----
Mr. Katz. The same issues get considered, but they are
generally considerably less in scope because the existing dam
has already had a certain impact.
Mr. Bucshon. So it might have an impact on the timeline
then if it was easier because of that?
Mr. Katz. Such projects tend to be easier, not as an
absolute rule but they tend to be easier.
Mr. Bucshon. Would the draft legislation relating to
nonpowered dams and pump storage in any way alter the FERC's
environmental analysis under NEPA?
Mr. Katz. I believe I answered an earlier question.
Mr. Bucshon. Probably did.
Mr. Katz. It looks as though it would in that it only calls
out fish and wildlife resources and doesn't call out flood
control, irrigation----
Mr. Bucshon. OK, that is what----
Mr. Katz [continuing]. Water supply and other things, and
also it seems to set a higher standard for the conditions that
would be imposed, a higher bar.
Mr. Bucshon. How about the Clean Water Act or the Clean Air
Act, any differences there on these type of projects?
Mr. Katz. Clean Air Act issues are almost never implicated
in hydro projects. The Clean Water Act, the legislation does
call----
Mr. Bucshon. Does the draft legislation have any impact on
that?
Mr. Katz. I don't think it would, but it is conceivable. We
would have to study that.
Mr. Bucshon. OK. I yield back, Mr. Chairman.
Mr. Walberg. I thank the gentleman and I recognize the
gentleman from Texas, Mr. Flores.
Mr. Flores. Thank you, Mr. Chairman. Mr. Chairman, thank
you for holding today's hearing. America's shale energy
revolution has dramatically improved our energy security here
at home. The U.S. is now one of the top producers of oil and
gas in the world, yet there are still existing infrastructure
challenges to deliver those resources to consumers. Modernizing
our infrastructure to efficiently and safely bring energy
resources to consumers helps to create jobs and brings lower
energy prices for hardworking American families.
So with that I would like to get into my questions. Some of
these were partially asked by Mr. Rush, Mr. Green, and Ms.
Castor. Mr. Turpin, I understand that the Commission does what
it can to encourage the participation of other permitting
agencies today to identify issues and work to resolve them.
Unfortunately, at times the other Federal agencies have chosen
to not take the responsibility seriously. They may simply
choose to just not act on a permit. In your experience, why do
some agencies choose to go that route to not work with you?
Mr. Turpin. I think it is from a global perspective of
agencies working with us it is fairly rare for somebody to
refuse to participate in the FERC pre-filing process or in
coordination with staff. Whether they choose to be, you know, a
cooperating agency under NEPA is a different question. They
have their own interests to protect in terms if they want to be
an intervener in the FERC process later.
I think in large part the rubs come down to them having
different criteria for the data they need to do their permit as
well as their own resource constraints. We are a sole purpose
agency. We look at this infrastructure. Other agencies have
multiple mandates and they have to balance their needs as best
they can.
Mr. Flores. When you look at the legislation that places
the mandate on the agencies to carry out their obligation
concurrently in accordance with the schedule established by the
Commission, do you think that legislation goes far enough or
should we try to go farther to compel coordination and timely
coordination?
Mr. Turpin. I think that is a difficult question. Trying to
compel the timely coordination requires--well, the language
always has in it the caveat of unless otherwise mandated in
other laws or unless an agency can't meet its other
obligations, and it has been in all the versions I have seen.
And so that is sort of the Gordian knot, and having the
Commission in charge of all of those mandates for these other
agencies seems a bit inefficient from our perspective.
Mr. Flores. Are you aware of strategies by pipeline
opponents like the Sierra Club and others to block access
through land for route surveys?
Mr. Turpin. I have heard of landowners blocking access, you
know, not granting survey access to pipeline companies, but not
NGOs or any kind of other organization.
Mr. Flores. OK. To the extent they do though I mean it is
pretty obvious, but can you tell the committee what impact that
has on you doing your job?
Mr. Turpin. As I said earlier, the Commission staff prefers
to have the best information, you know, from the ground data in
the ground surveys in the application, but without it we can
move to desktop data, we can move to remote data, and we can
move forward with our analysis that does have to be truthed up
later before construction. And so sometimes there are potential
implications that certain protected features won't be
discovered until after the application and then the applicant
has to do an expensive re-route or some lengthy adjustment.
Mr. Flores. OK. The permitting dashboard in the draft
legislation would consolidate the information from your agency
as well as the coordinating agencies into a simple, easy to use
and easy to access Web site. You admit it would improve
transparency, but you also say in your testimony that it would
burden staff resources and time. How do we balance the need for
transparency with scarce Government resources?
Mr. Turpin. Good question. I am still trying to figure that
one out in my role here. I think that is always the rub. We
don't have a lot of excess staff sitting around with a lot of
excess capacity. You know, we are all technical specialists and
we try to use everybody to their full capacity. So adding on,
sort of riding herd on these other agencies just does dilute
that effort, so I mean we can do it.
Mr. Flores. And with respect to this permitting dashboard,
again coming, stand out of the weeds, if the FERC didn't
collect this information who would or should or could? I mean,
you are the lead agency for permitting pipelines; aren't you
the logical owner for this project?
Mr. Turpin. Yes, we are. And as the current process we have
it is the applicant that is going out and filing for these
permits and engaging those agencies that is responsible for
collecting that data and reporting it into the record.
Mr. Flores. OK. Mr. Chairman, I yield back.
Mr. Walberg. I thank the gentleman. I now recognize the
gentleman from North Dakota, Mr. Cramer.
Mr. Cramer. Thank you, Mr. Chairman. Thanks to the
witnesses. I want to hone in a little bit on some statements
that were made earlier and see if we can't find some common
ground, because I appreciate what Mr. McNerney said earlier
about, you know, we will never solve this if one side imposes
its will on the other. I agree.
I think Ms. Castor makes a relevant point admonishing us to
see how the FPISC process works. We do have some pretty
successful pilots and I think they could be even more
successful if the interagency collaboration was more, I guess
cooperated by more agencies on Federal lands where we have seen
some permitting activity actually create efficiencies by
actually co-locating some agencies even in field offices.
But what I am wondering about on the interagency issue here
is can we find ways or even substantiate that interagency
collaboration and cooperation can accomplish two goals. One, to
streamline the permitting process so that those of us who want
to see the process shortened can be satisfied as well as find
synergies, not just efficiencies but synergies among the
agencies where there is even greater environmental oversight
and scrutiny in that short of timeframe so that there doesn't
have to be a loser but rather two winning sides?
Is that too much to hope for or can that be substantiated?
And I would ask either or both of you for your experiences.
Mr. Katz. No, I would say that what you say makes a lot of
sense and indeed is a viable and very positive goal.
Mr. Cramer. Do we have any experiences where that can be
demonstrated or----
Mr. Katz. The Commission participated a kind of ex-officio
because it wasn't any of our projects in the interagency task
force that you talked about, which I think primarily related to
getting transmission lines on Federal lands permitted. And our
impression watching it a little bit from afar was that the
agencies did a very good job of working together and doing
things concurrently and trying to solve everybody's problems at
once.
And in some projects that come before the Commission that
happens and things go very well. Other times it doesn't. I
guess the question of getting it to be consistent and to be the
rule rather than exception is perhaps the difficult thing.
Mr. Cramer. And perhaps that is more a matter of the will
than it is policy. However, Mr. Turpin, I don't know if you
have anything to add to that but is there a way to incent that
within the agencies? In other words, I think the natural
tendency is to slow-walk things if you are just the bureaucracy
doing your things sequentially, right, and you have 90 days,
generally it takes 90 days. If you hadn't noticed, Congress
usually extends their deadlines so that we can take longer.
So what I am wondering is, is there a way to properly
incent that behavior that we seek in an actual streamlining
process without violating the integrity of oversight and
scrutiny?
Mr. Turpin. I think it comes back to sort of setting the
priorities for the agencies. I mean they are given multiple
mandates. Again we are a single-focus agency so it is easy for
us to stay on the track. Other folks who have very widely
different missions to carry out have to do that balancing act
and so having that priority set for them would go a long way.
Mr. Cramer. I do wonder sometimes if we couldn't harmonize
some of that again while maintaining the integrity, but that is
beyond obviously your agency's responsibility and scope.
Since I have time, with regard to the presidential permits
in cross-border on the oil side, which is the difference maker,
right, from natural gas on international pipelines, this
national interest determination which is what the President
ultimately has to make on a, where a presidential permit is
determined, if I understood I think your answer to a previous
question, you, while consulting the national security in
Homeland Security and other agencies, State Department, you are
in essence not neglecting the national interest especially on
the security side in your process with gas pipelines; would
that be accurate?
And I don't know whether the determination or the standard
for the permit is the same, but it seems that the
considerations are the same. Is that fair?
Mr. Turpin. Yes. I mean with a natural gas process, you
know, under NGA Section 3 we do the environmental review, we
look at the facility's installation, and under the executive
orders for the presidential process we reach out to State and
Defense to get their concurrence on impacts that areas that
they oversee.
Mr. Cramer. Thank you for your work and for your testimony.
I yield back.
Mr. Walberg. I thank the gentleman. I recognize myself now
for 5 minutes of questioning. Mr. Katz and Mr. Turpin, thank
you for being here. Mr. Katz, the discussion draft would
designate hydropower as renewable energy under the Energy
Policy Act of 2005. How has hydropower development been
adversely affected by the fact that it is not always considered
renewable?
Mr. Katz. That is one, again, that I would more have to
defer to the second panel who deal with it on a day-to-day
basis. But certainly there are Government programs, tax
credits, other things that have not been available to the hydro
industry when it is not considered to be a renewable resource.
Mr. Walberg. Seems to make sense, so I guess we will wait
for that second panel. Let me ask you, as you know the small
conduit hydropower plays an important role in our Nation's
energy mix. It is a great option to add renewable generation to
existing infrastructure, it is installed almost anywhere even
in remote places. The Hydropower Regulatory Efficiency Act of
2013 created a streamlined process for qualifying conduit
facilities. What has been your experience since then?
Mr. Katz. Our experience has been that that process has
gone very smoothly. We have almost never had any comments when
someone proposed to have a qualifying project, so it has gone
very quickly. In terms of the new legislation which would cut
the comment period back to 15 days, Commission staff supports
that.
Indeed, we are not certain why it might be limited to
projects of two megawatts as opposed to the five megawatt
projects that are already covered by the act, and indeed I will
go further to say the Commission staff has previously testified
to Congress that it very well would be appropriate to exempt
all conduit projects from Commission regulation given that the
conduits themselves are subject to whatever appropriate
environmental regulation goes on when a conduit is built and
that they very rarely, if ever, have additional environmental
impact.
Mr. Walberg. So you would be supportive of Congress
shortening the time period at the very least?
Mr. Katz. We see no downside to that.
Mr. Walberg. OK, OK. Let me ask this question and both
could respond. How does the current FERC process hinder
hydropower projects upgrades such as those that would increase
deficiency capacity and output of existing plans?
Mr. Katz. I think it can vary from project to project.
Again if you have a fairly simple project that stakeholders are
comfortable with and doesn't have significant environmental
impacts it can go forward very quickly. If it is a major
project that brings into play the Endangered Species Act, the
Clean Water Act and other regulations that can significantly
delay consideration of that amendment.
Mr. Walberg. OK, thank you. I yield back my time and now
recognize the gentleman from Oklahoma, Mr. Mullin.
Mr. Mullin. Thank you, Mr. Chairman. And first of all, I
want to thank my colleague across the aisle, Gene Green, for
working with me on this issue and working together with us on
so many different issues. We have worked together in the past
and I look forward to doing it again.
Mr. Turpin, as you know the process for reviewing cross-
border infrastructure is established through a series of
executive orders, and I think you know where I am going with my
questioning here. In fact, Congress has never weighed in and
there are no current laws on the books. The draft legislation
before us today would be the first to establish a uniform and
transparent process in authorizing cross-border energy
infrastructure. Would the draft legislation change the
Commission's existing process for reviewing cross-border gas
pipelines?
Mr. Turpin. I do not believe it would.
Mr. Mullin. Would you have any concerns with that? When I
say you don't believe it would I just want to clarify that.
Mr. Turpin. Well, let me add to that. I don't believe it
would change the review of the facilities, you know, the
environmental review that we do, the current reviews that we do
under the Natural Gas Act. Under the bill of course we would
not be reaching out and coordinating with State and Defense.
Mr. Mullin. So it would basically be you would follow the
same process kind of like what Mr. Cramer was saying?
Mr. Turpin. Right.
Mr. Mullin. Does the Commission have the technical capacity
to take on the new responsibility?
Mr. Turpin. In terms of adding oil pipelines, I mean
pipelines to a large extent are pipelines.
Mr. Mullin. Agreed.
Mr. Turpin. There will be some uniqueness to the product in
it that we haven't had to deal with before, but we can get that
expertise.
Mr. Mullin. Uniqueness by?
Mr. Turpin. Natural gas, I mean as a siting matter
transport of oil is something we have not had to look at. So
there will be considerations for spills, considerations for
that sort of thing.
Mr. Mullin. Would FERC treat oil pipelines like gas
pipelines with respect to identification for the jurisdiction
purposes?
Mr. Turpin. I don't know. That would have to be set, the
policy for that would have to be set by the Commission, which
is I think what would be done in that yearlong rulemaking, and
then Commission staff would act on whatever policy the
Commission comes up with.
Mr. Mullin. Do you have a problem with the timeframe to
which we put forth with approving the permit?
Mr. Turpin. As I read it, it is 120 days after the final
NEPA document and that is not an issue.
Mr. Mullin. Not an issue. Would the draft legislation have
any effect on the NEPA or a shortcut to the Commission's
environmental review in any way?
Mr. Turpin. I do not believe so.
Mr. Mullin. OK, real quick that was all I had. I just
wanted to clarify some concerns that we have heard about this.
So Mr. Turpin, appreciate it and Mr. Chairman, I yield back.
Mr. Walberg. I thank the gentleman and I recognize the
gentleman from Missouri. Welcome back, Mr. Long.
Mr. Long. Thank you, Mr. Chairman. And Mr. Turpin, the
Promoting Interagency Coordination for Review of Natural Gas
Pipelines discussion draft requires early outreach to
permitting agencies. How does this help FERC and other agencies
coordinate to make sure their input and concerns are addressed?
Mr. Turpin. I think it allows the applicant to get out to
those agencies at the earliest possible time before they have
developed the routes, before they develop the projects so that
the agencies can identify what data needs they have, can
influence what the applicant does in the design to mitigate any
impacts, and give the applicant the most notice on what sort of
studies might be needed for when the applications are filed.
Mr. Long. OK. Can you discuss the ways that we could reduce
the uncertainty in the review schedule to make sure the reviews
are completed in a timely manner?
Mr. Turpin. I think the largest, single most crucial factor
in doing that is developing the data needed by all the
different agencies for their mandates.
Mr. Long. OK.
Mr. Katz, you mentioned in the next 15 years almost half of
licensed projects will begin the relicensing process. How can
we make sure that the relicensing projects are completed in a
timely manner?
Mr. Katz. It is a difficult ask given that there are
statutory mandates that allow other agencies to in effect set
the timeframe. I think that some of the efficiencies that are
being proposed in the current act will help.
Mr. Long. Say that again, you think that what?
Mr. Katz. I think that some of the measures provided in the
acts before us will introduce efficiency and help the
Commission move ahead to do things in as timely a manner as
possible. And I think the Commission staff and the Commission
itself will be committed to getting those licenses done as
quickly as possible, but we don't have complete control given
the exercise of authority under Federal law by State and other
Federal agencies.
Mr. Long. All right. Currently FERC can grant an extension
of just 2 years from the commencement of the project
construction. Could you expand on how the discussion draft
gives FERC flexibility on cases that require additional time to
begin construction?
Mr. Katz. Yes, the discussion draft would allow the
Commission to extend the commencement of construction deadline
for several additional years and that might help certain
projects that are having trouble sort of dotting there is and
crossing their Ts before they get started. So it would be a
help to some projects.
Mr. Long. Ok. And Mr. Chairman, that is all I have, and I
yield back.
Mr. Olson [presiding]. The gentleman yields back.
Seeing there are no further members wishing to ask
questions for the first panel, I would like to thank both you,
Mr. Turpin, and you, Mr. Katz, for being our witnesses today.
This will conclude our first panel, and we will now take a few
minutes to set up for the second panel.
[Recess.]
Mr. Olson. Welcome back, and thank you for your patience
and for taking your time to be here today. We now move into our
second panel for today's hearing. We will follow the same
format as the first panel. Each witness will be given 5 minutes
for an opening statement followed by a round of questions from
our members.
For the second panel we have the following witnesses: Mr.
Jeffrey Soth, he is a legislative director and political
director at the International Union of Operating Engineers; Mr.
Jeffrey Leahey, the deputy executive director of the National
Hydropower Association; Mr. William Robert Irvin, president and
CEO of American Rivers; Ms. Jennifer Danis, the senior staff
attorney at the Eastern Environmental Law Center; Mr. Donald
Santa, president and CEO of the Interstate Natural Gas
Association of America; and Mr. Andrew Black, president and CEO
of Association of Oil Pipe Lines.
We appreciate you all being here today. We will begin this
panel with Mr. Soth, and you are now recognized for 5 minutes
to give an opening statement.
STATEMENTS OF JEFFREY SOTH, LEGISLATIVE AND POLITICAL DIRECTOR,
INTERNATIONAL UNION OF OPERATING ENGINEERS; JEFFREY LEAHEY,
DEPUTY EXECUTIVE DIRECTOR, NATIONAL HYDROPOWER ASSOCIATION;
WILLIAM ROBERT IRVIN, PRESIDENT AND CHIEF EXECUTIVE OFFICER,
AMERICAN RIVERS, INC.; JENNIFER DANIS, SENIOR STAFF ATTORNEY,
EASTERN ENVIRONMENTAL LAW CENTER; DONALD F. SANTA, PRESIDENT
AND CHIEF EXECUTIVE OFFICER, INTERSTATE NATURAL GAS ASSOCIATION
OF AMERICA; AND ANDREW BLACK, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, ASSOCIATION OF OIL PIPE LINES
STATEMENT OF JEFFREY SOTH
Mr. Soth. Thank you, Vice Chairman Olson, Ranking Member
Rush, members of the subcommittee, it is an honor to join you
at your first legislative hearing to the 115th Congress. My
name is Jeffrey Soth. I am legislative and political director
of the International Union of Operating Engineers. The Union
represents almost 400,000 men and women in the United States
and Canada. In short, we build and maintain the cranes,
bulldozers, and backhoes that build North America.
Members of the Operating Engineers are some of the most
highly skilled, highly trained construction craft workers in
the world. We deliver training at over 86 facilities in the
United States where we employ 550 instructors. The IUOE and its
employers invest over $128 million annually in local
apprenticeship and training programs, and I want to point out
here, at no cost to the public. That is exclusively, privately
financed.
In addition to the training of local unions, the IUOE
conducts specialized national training in coordination with the
Pipe Line Contractors Association in the pipeline sector. We
invest over 5 million annually in that work to ensure the safe
installation and construction techniques in the pipeline
industry making it the safest in the world. The pipeline
training program has historically been delivered at locations
around the country where there is a large project or regional
demand for pipeline training.
What I am pleased to share with the committee that the IUOE
is building a new home for its pipeline training in Crosby,
Texas. In spring 2018, the IUOE will open our international
training and education center, $150 million training center in
the heart of the Gulf Coast. I have attached a rendering of the
facility and a site plan of the project where you can see just
how much of that property is dedicated to pipeline training.
And again this facility is being built at no cost to the
public. There are no public resources, no taxpayer dollars
whatsoever associated with the $150 million investment.
Let me turn now to employment and wages in the construction
sector and in the pipeline industry in particular. The
construction industry has the highest unemployment rate of any
industry sector at 8.4 percent. Employment in the oil and gas
pipeline sector of the construction industry is near a 5-year
low. Please see the chart attached to my testimony.
As you can tell from it, we are down about 20 percent of
total jobs in the sector since the summer of 2015. I should
point out that these are good, family sustaining jobs.
Production and nonsupervisory workers make over $30 an hour in
the pipeline industry, and compare that to $21.90 in all
private sector payrolls.
After that description and background of the IUOE's role in
training and our look at labor market information, let me turn
to the legislation before the committee and two pieces of
legislation in particular related to pipelines.
Regulatory uncertainty and procedural delays during
environmental review are hindering the growth of these good
jobs and the other benefits that go along with this domestic
energy production. Congress needs to update and streamline the
permitting and regulatory framework to ensure that the domestic
oil and gas industry flourishes in a safe and predictable way.
To put it simply, it is time to modernize the Federal code for
energy infrastructure.
That is why they IUOE supports the Cross-border Energy
Infrastructure Act and the Promoting Interagency Coordination
for Review of Natural Gas Pipelines Act. The cross-border
legislation in particular takes the important step of codifying
the process to permit a project that crosses the border. Now
that there is not a controversial project under consideration
it is the right time to make this move away from the ambiguity
of an executive order.
Frankly, it is time to legislate regarding cross-border
permits. The State Department's inspector general described the
problem in a special report in February of 2012 when it
reviewed the Keystone XL permit process. It determined that the
limited expertise and experience of State Department officials
with respect to NEPA and environmental reviews frustrated and
delayed the permitting process for KXL, perhaps even leading to
a need for a whole supplemental EIS and adding 11 months to
that process.
It is time to place responsibility for cross-border permits
in an experienced environmental agency like FERC. The
interagency coordination bill makes important reforms to
natural gas pipeline permitting. The bill will give FERC
additional tools to identify potential issues that can hinder
State and Federal agencies from conducting timely reviews.
It is an important evolution from the simple 12-month limit
legislation that has been considered in past Congresses and it
is time to more closely address, that this legislation more
closely addresses the real problems associated with permitting
delays. The IUOE encourages you to pass these two pieces of
legislation and we look forward to working with the committee
to enact them in this 115th Congress. And thank you, Vice
Chairman Olson, for the opportunity. It was a pleasure to join
you today.
[The prepared statement of Mr. Soth follows:]
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Mr. Olson. Thank you, Mr. Soth.
The Chair now calls upon Mr. Leahey for 5 minutes for an
opening statement.
STATEMENT OF JEFFREY LEAHEY
Mr. Leahey. Vice Chairman Olson, Ranking Member Rush, and
members of the subcommittee, thank you. I am pleased to be here
to discuss the importance of hydro to the electric system, its
untapped growth potential, the challenges that impede growth,
and bills before the subcommittee today.
Hydro provides six to seven percent of all electricity
generation and nearly half of all renewable generation, making
hydro the largest provider of renewable electricity. Another 42
pump storage plants make up almost all, 97 percent, of energy
storage. This system contributes to cleaner air and provides
other benefits, including river management for fish and habitat
protection, flood control, drought management, water supply,
irrigation and more.
Hydro also provides many grid benefits: base load power,
peaking generation, load following, reliability. With the
growing need for these services, hydro has increased capacity
by nearly two gigawatts since 2005.
Hydro infrastructure also brings many economic benefits.
The industry employs a work force of almost 150,000 and access
to low-cost, clean, reliable power attracts many high tech
firms and manufacturers. But hydro can do even more. The myth
is that hydro is tapped out. But that is not the case and I
direct the subcommittee to the 2016 Department of Energy
Hydropower Vision Report. This report with input from industry,
environmental groups, and State and Federal agencies outlines
50 gigawatts of growth potential by 2050.
Let me highlight two prime examples, pump storage and
building on existing infrastructure nonpowered dams and
conduits, the focus of three of the bills today. Pump storage
can rapidly shift, store, and reuse energy until there is
corresponding system demand while facilitating the integration
of variable generation. As more intermittent and renewable
generation is added to the grid and other base load generation
is lost, the need for pump storage is increasing particularly
in the West.
Of the 80,000 U.S. dams, only 3 percent generate
electricity highlighting the potential in the nonpowered dam
sector. Many of these opportunities are located in regions some
may considered unexpected, such as the Southeast and Rust Belt
States. Conduit opportunities are also available across the
country where power generating equipment can be added to
tunnels, canals, and pipes. However, projects are not being
deployed due to the uncertain, duplicative, and lengthy overall
regulatory process.
NHA member company, Missouri River Energy Services, reports
that their new project at a Corps of Engineers dam in Iowa will
come on line in 2018, having started the development process in
2005, 13 years ago. I cannot overstate how crucial it is to
enact process reforms immediately. The Nation could access huge
amounts of reliable low-cost power without sacrificing other
values.
Existing project owners are also expressing concerns. With
well over 400 projects up for relicensing by 2030, NHA is
already hearing from owners particularly in the Northeast that
the time and cost for licensing may render projects uneconomic
and result in license surrenders. Congress must address the
challenges both asset owners and developers face.
Over the last 5 years, this subcommittee has developed an
extensive record on the problems experienced by industry. The
message has been clear and consistent. Licensing takes years to
complete, requires substantial up-front costs, and contains too
much uncertainty and risk, all of which for a developer creates
a significant barrier to securing financing or capital and for
a utility makes it difficult to justify project economics.
Turning to the bills before the subcommittee today, NHA
strongly supports policies to address inefficiencies and
improve the coordination in the project approval process which
we believe will promote the hydropower resource while also
protecting environmental values. I have included specific
comments on all of the bills in my written statement and ask
permission to include for the record additional letters of
support that are submitted following this hearing.
Focusing on the Hydropower Regulatory Modernization Act, it
incorporates bipartisan proposals that NHA supports and which
were included in legislation in last Congress. It is a crucial
first step to address the barriers to developing hydropower's
untapped potential and the problems experienced in relicensing.
Empowering FERC as the lead agency to coordinate the
schedule, requiring FERC and agencies to coordinate,
facilitating concurrent decision making, early identification
of issues, and elevating disputes to leadership are
improvements that should increase transparency and
accountability and eliminate delays. However, NHA also believes
improvements to the bill are needed as the language appears to
rescind important provisions under current law.
This includes the requirement for agencies to give equal
consideration to developmental and nondevelopmental values when
crafting mandatory conditions, and the opportunity for
discovery and cross examination as part of the trial-type
hearings process. These received bipartisan support when
adopted and were backed by industry and stakeholders alike.
Finally, NHA believes continued work through last year on
some of these provisions resulted in new language that provides
further clarity and direction and should be adopted. And we
believe this hearing creates an opportunity for further
dialogue on issues documented in the record but for which
solutions were not advanced. And with that I will conclude my
testimony and I look forward to answering your questions.
[The prepared statement of Mr. Leahey follows:]
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Mr. Olson. Thank you, Mr. Leahey.
The Chair now calls upon Mr. Irvin for a 5-minute opening
statement.
STATEMENT OF WILLIAM ROBERT IRVIN
Mr. Irvin. Vice Chairman Olson, Ranking Member Rush,
members of the subcommittee, thank you for the opportunity to
testify today on the hydropower bills being considered by this
committee. My name is William Robert Irvin. I am president and
CEO of American Rivers, a national conservation organization
that works to protect wild rivers, restore damaged rivers, and
conserve clean water for people and nature. I also served as a
member of the senior peer review group for the Department of
Energy's Hydro Vision Report which was issued last year.
Let me begin by stating very clearly that while we are pro-
rivers, American Rivers is not anti-hydropower. Hydropower is
and will remain a key part of our Nation's energy portfolio.
Our staff has participated in hundreds of FERC proceedings
resulting in the generation of thousands of megawatts of
electricity and improved environmental performance at those
generating facilities. In addition, we have supported
legislation to incentivize sustainable hydropower projects.
American Rivers also recognizes that when cited and
operated responsibly, hydropower can be beneficial as a low-
carbon, renewable energy source. It is certainly better for the
climate than burning fossil fuels, but it is not carbon-free
due to the methane emissions from reservoirs. Nevertheless,
when sited and operated irresponsibly, hydropower can do great
harm to rivers and the wildlife and communities that depend on
them.
By changing the flow of rivers, hydropower dams have harmed
fish, mussels, and other aquatic species, and pushed some to
the brink of extinction. Hydropower can have toxic effects on
water quality. Hydropower dams can de-water stretches of river
and have in the past been built with callous disregard of
Native American sacred sites and ancestral lands. To prevent
these harmful impacts, we have laws in place to protect
endangered species and clean water and to give States, Tribes,
and Federal resource agencies a meaningful seat at the
hydropower licensing table.
Accordingly, in evaluating any proposed changes to the
hydropower licensing process, American Rivers, and indeed the
larger environmental community, will vigorously oppose any
effort to limit the application of the Endangered Species Act
or the Clean Water Act to hydropower dams to infringe upon
State water law and State authority to manage water rights, to
limit the protections afforded to Native Americans and the
Native American Tribes in hydropower licensing, to limit the
ability of the United States to protect federally managed
fisheries and taxpayer-owned public lands, or to limit the
authority of State agencies to protect fish, wildlife, and
other natural resources within their State.
Regrettably, as I have described in my written testimony,
the draft bills before the subcommittee fail these tests. At
the heart of each of these bills is the flawed principle that
FERC should be elevated above other Federal, State, and Tribal
agencies in the licensing process and be able to limit Federal,
State, and Tribal authorities over rivers.
Giving FERC the power to decide questions of fisheries
biology makes as much sense as giving the National Marine
Fisheries Service the authority to decide interstate
electricity tariff cases. Giving FERC the authority to decide
questions of Native American treaty rights makes as much sense
as giving the Bureau of Indian Affairs the final say over
reliability standards for interstate, high voltage
transmission. And giving FERC the final say over matters of
State water law upends the prior appropriation doctrine in the
West and challenges riparian water law that goes back to
colonial times in the East.
The draft bills before you will not improve licensing or
promote environmental protection. Instead, these bills will
lead to legal gridlock and environmental degradation. I hope
that rather than rushing these bills forward, the committee
will instead work with stakeholders, including American Rivers,
to develop legislation to facilitate responsible hydropower
development while protecting healthy rivers, wildlife, and
communities.
In my written testimony I provided some common sense
approaches to improving the licensing process without harming
the environment. If the committee chooses to convene a
stakeholder process to develop licensing reform that maintains
protection of rivers, I can assure you that American Rivers
will roll up our sleeves and get to work with all the
interested parties.
Thank you for the opportunity to testify today and I look
forward to answering any questions you may have.
[The prepared statement of Mr. Irvin follows:]
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Mr. Olson. Thank you, Mr. Irvin.
And the Chair now recognizes for 5 minutes Ms. Danis for an
opening statement.
STATEMENT OF JENNIFER DANIS
Ms. Danis. I want to thank the committee for the
opportunity to testify. My name is Jennifer Danis and I am a
senior staff attorney with the Eastern Environmental Law Center
representing New Jersey Conservation Foundation and Stony
Brook-Millstone Watershed Association.
The proposed changes contained in the Interagency
Coordination Act are unnecessary and would upset the careful
balance of cooperative federalism that exists under the Clean
Water Act, the Clean Air Act, and the Coastal Zone Management
Act. The changes would inappropriately expand FERC's natural
gas authority, attempt to undermine States' rights, and
undermine the important role that other Federal and State
agencies play in protecting natural resources for the public.
As we have already heard this morning, the proposed changes
are a solution in search of a problem because FERC approves
over 90 percent of projects within 1 year. FERC administers
applications for both Section 3 and Section 7 approvals on a
case by case basis subject to the statutory standards of the
Natural Gas Act, operating under no larger Federal energy
program. These approvals are major Federal actions under NEPA
and as such FERC is required to consider their environmental
impacts.
Yet FERC uses an extraordinarily narrow approach of its
regulatory role under NEPA. For example, FERC has expressed its
view that it is not FERC's duty to assess project purpose and
need beyond accepting the applicant's stated project goal. This
approach limits FERC's need for review excluding real analysis
of alternatives. FERC will only consider alternatives to
natural gas transmission pipelines that are other natural gas
transmission pipelines.
Similarly, FERC takes an extremely narrow approach to
environmental impact assessments. FERC's assessment of
environmental impacts routinely finds that a project's
environmental impacts will not be significant so long as other
Federal agencies or State agencies acting pursuant to Federal
law separately assess the project's environmental harm under
substantive statutes such as the Clean Water Act, the Clean Air
Act, and the Coastal Zone Management Act.
FERC considers authorizations on a case-by-case basis not
subject to any Federal energy program or regional planning. As
such, FERC's ad hoc authorizations demand robust, ancillary
Federal authorizations by agencies operating subject to
comprehensive plans to protect our water and air for future
generations. For FERC projects, the comprehensive environmental
impacts analyses required by NEPA are consistently performed by
those other Federal and State agencies in their independent
review under substantive environmental laws.
Although the proposed bill is entitled Promoting Agency
Coordination for Review of Natural Gas Pipelines, the essence
of the proposed changes would generate not resolve conflict
between and among Federal and State agencies currently
responsible for evaluating the actual impacts of Section 3 and
Section 7 projects. In fact, the proposed amendments threaten
to abrogate State and Federal powers and duties under those
laws.
Congress carefully allocated cooperative and specific roles
for the States and for the relevant Federal agencies when
enacting those substantive laws. They all explicitly recognize
the critical role that the States play in protecting water and
air quality. In fact, a key legislative purpose of the Clean
Water Act was to uphold the primary responsibility for
controlling water pollution that rests with the States.
From its inception, the 401 Certification requirement was a
mechanism to explicitly protect States' ability to regulate
water quality standards and pollution control ensuring their
ability to enforce more stringent standards than Federal ones.
Under the Clean Air Act and Coastal Zone Management Act, the
State may also designate standards more protective but not less
than Federal ones. These NGA amendments would create overt
clashes with existing Federal statutes designed to protect
water and air and to preserve the States' role in that process.
For example, the proposed amendments attempting to allow FERC
to define the scope of environmental review for the States or
agencies acting pursuant to Clean Water Act authority would
clearly run afoul of the Clean Water Act's goals.
The Clean Water Act is a model of cooperative federalism.
There is no need for Congress to disturb this careful balance.
Of the hundreds of energy infrastructure projects authorized by
FERC, there have been only three. A tiny percentage that States
have determined cannot be constructed in accordance with
controlling water quality standards. Industry cries of abusing
reserved and primary powers by the States to protect water
quality must stem from a mistaken belief that any certification
denials constitute an abuse of authority.
I see my time is coming to a close. I am happy to answer
any questions. Thank you for the opportunity to testify.
[The prepared statement of Ms. Danis follows:]
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Mr. Olson. Thank you, Ms. Danis.
The Chair now calls upon Mr. Santa for 5 minutes to give an
opening statement.
STATEMENT OF DONALD F. SANTA
Mr. Santa. Good afternoon, Vice Chairman Olson, Ranking
Member Rush, and the members of the subcommittee. My name is
Donald Santa and I am the president and CEO of the Interstate
Natural Gas Association of America, or INGAA. Our members
transport the vast majority of the natural gas consumed in the
United States through a network of approximately 200,000 miles
of interstate transmission pipelines.
These transmission pipelines are analogous to the
interstate highway system. In other words, they are large
capacity transportation systems spanning multiple States or
regions. Thank you for the opportunity to share INGAA's
perspective on the discussion draft of legislation to improve
agency coordination during the review of federally regulated
natural gas pipeline projects.
While the Federal Energy Regulatory Commission has
exclusive authority to grant the certificate required to
construct an interstate natural gas pipeline, various Federal
and State agencies are responsible for granting other
environmental and land use permits and approvals that must be
obtained before a pipeline company may commence construction.
This is not the first time that INGAA has testified before this
subcommittee on the need to improve the natural gas pipeline
permitting process.
The need for action is even greater today because the
pipeline review and permitting process has only become more
protracted and more challenging. Federal permitting agencies
are taking longer and in some cases are electing not to
initiate reviews until FERC has completed its review of a
proposed pipeline project. These disjointed, sequential reviews
cause delay and in some cases create the need for supplemental
environmental analysis. This is unnecessary and avoidable.
Regulations implementing the National Environmental Policy
Act provide for designating a lead agency to coordinate the
review of a proposed major Federal action. The lead agency in
turn identifies and works with cooperating agencies to develop
a single environmental document for the project. Congress, as
part of the Energy Policy Act of 2005, designated FERC as the
lead agency for natural gas pipeline projects subject to the
Commission's jurisdiction.
EPAct 2005 also provided a framework for FERC to coordinate
the various permitting reviews connected with a natural gas
pipeline project and to set a deadline for other agencies to
complete their work. Notwithstanding the congressional intent
expressed in EPAct 2005, it has been a challenge to get Federal
and State agencies to work cooperatively and constructively
within this framework. The recent experience of an INGAA member
company illustrates the point.
The company has proposed a pipeline that would intersect
the Blue Ridge Parkway and the Appalachian National Scenic
Trail in Virginia. The company proposed a nearly one-mile,
horizontal drill under a mountain so that the pipeline would
cause no surface disturbances, no tree clearing, and no
interference with public access to the Parkway or Trail. The
Park Service responded with indifference to the pipeline
operator's efforts to minimize the impact of its project. The
Park Service took 14 months to review a 22-page application to
survey the area. Once permission was granted, the survey work
was completed in a single afternoon.
The survey, however, is only an initial step. The Park
Service has yet to complete its extensive review of the
pipeline operator's application for a permit to drill beneath
the Parkway and Trail. We clearly need better agency engagement
and decision making than that demonstrated by the Park Service
in this example.
These kinds of permitting delays are becoming much more
frequent and are not confined to the Park Service. Because
there is no direct accountability for this lack of engagement,
agencies with limited resources are free to either ignore or to
delay their response to requests to participate in the review
of a proposed pipeline project.
Let me be clear that INGAA is not seeking diminution of the
substantive requirements connected with permits that must be
obtained to construct interstate natural gas pipeline. INGAA
simply seeks greater certainty regarding the schedule for
reviewing and acting upon applications for such permits and
better coordination among the agencies responsible for issuing
permits.
We appreciate the committee's leadership in drafting
legislation to address this need. INGAA encourages the
committee to provide even greater structure in detailed
guidance so that there is no misunderstanding about
congressional intent for the pipeline permitting process.
Legislation to achieve this result is not unprecedented or
outside the mainstream. The process created by Congress in
highway authorization legislation offers a model. INGAA
encourages you to be bold.
INGAA's written testimony includes specific recommendations
for strengthening and refining the language of the draft bill
to achieve its stated goals. We want to work with you in
strengthening this bill and make it more effective in
coordinating the necessary permitting reviews. Thank you for
the opportunity to testify today.
[The prepared statement of Mr. Santa follows:]
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Mr. Olson. Thank you, Mr. Santa.
The Chair now calls upon Mr. Black for a 5-minute opening
statement.
STATEMENT OF ANDREW BLACK
Mr. Black. Thank you, Mr. Chairman. And if you will permit,
I would like to thank Mr. Barton for his nice comments on the
sudden passing of my dad Bill Black in Houston last week. Dad
admired what he did on committee and the floor. Dad would laugh
and have me thank the Congress for entertainment over the
years, and then he would tell me to get back to work, so I
will.
I am Andy Black with the Association of Oil Pipe Lines.
AOPL represents owners and operators of liquid pipelines
transporting crude oil, refined products like gasoline and
diesel, and natural gas liquids such as propane and ethane to
American workers and consumers. The presidential permit process
for cross-border energy pipelines needs reform. The poster
child for presidential permit cross-border abuse is well known.
The Keystone XL delay from 2008 to 2015 under the previous
administration was inexcusable. No permit review process of any
kind should take that long.
While delay of the Keystone XL pipeline project garnered
widespread public attention, there were many other applications
stuck at the State Department also facing multiyear delays.
Many of those projects were simple changes of ownership filings
with no impact on the pipelines' operations or border crossing
status. Ironically, the Keystone XL NEPA environmental impact
statement conducted by the previous administration found that
building the pipeline would do more to protect the environment
and avoid greenhouse gas emissions than any alternative
including rejecting the pipeline.
According to U.S. Government statistics, more than 99.999
percent of petroleum products shipped by pipeline reach their
destination safely. The State Department review found the
alternatives to not building KXL and forcing that crude oil
onto other modes of transportation would result in 2.6 times
more crude oil released and 832 times more releases per year.
The State Department study also found the project would provide
tens of thousands of U.S. jobs in construction, manufacturing,
trade, finance, insurance, professional services, health
services, food accommodations, and more, with more than $2
billion in worker payroll.
Good paying jobs are the benefit of every pipeline project.
Whenever a major project is proposed across our international
borders or just within the U.S., thousands of jobs with
millions of dollars in worker payroll can follow and increase
tax revenues to governments. And consumers across the country
also benefit from the downward pressure on gasoline and diesel
prices that new crude oil supplies bring.
As pipeline operators, we know the ultimate reasons for
delay and rejection of the Keystone XL pipeline had little to
do with the superior safety, minimal environmental impact, new
jobs or consumer benefits of pipelines. Larger forces were at
work highjacking this project for their own political gain.
Unfortunately, Keystone XL wasn't the only victim of a
dysfunctional process.
Under the last administration we saw review of the simplest
pipeline permits with the least amount of environmental impact
grind to a halt. A prime example are the several pipelines that
run from Canada to Michigan delivering liquid petroleum gases
such as propane and butane for industrial uses in manufacturing
chemicals, plastics, and similar products, supporting good
paying jobs in Michigan and beyond.
For years, a liquid pipeline operator had presidential
permit applications pending for pipelines crossing that border.
Under current State Department guidelines, even a change in
ownership of the pipeline triggered a need to apply for a new
permit. For more than 5 years, the State Department considered
whether to issue a permit for something almost as simple as a
name change.
There were no operational changes of the pipeline, no
change in materials or any physical or environmental impacts,
just many years of review, document requests, and delays. We
believe the career staff at the State Department faithfully
executed their duties under executive authority. However, the
current system with no statutory standards or limits still left
the process vulnerable to manipulation by senior political
officials.
With no obligations under Federal law to reach a timely
decision, limit the scope of review to the border crossing, or
avoid wasteful reviews of projects with little or no
environmental impact, the current process is ripe for abuse.
The current administration has returned to the original intent
of the presidential permit process, but without reform a future
administration could return to the abuses of the past.
Liquid pipeline operators support reforming the cross-
border approval process and look forward to working with the
committee. Keys to meaningful reforms are the discussion drafts
provisions to, 1) provide a statutory time limit for permit
reviews after any applicable environmental reviews are
complete; 2) presume approval unless the pipeline is found not
in the public interest, reflecting the benefit of reducing
dependence on overseas energy suppliers; 3) limit the border
crossing permit scope of review to border crossing issues and
impacts; and 4) exempt modifications to existing cross-border
facilities because they have no impact on the environment at
the border crossing. A reformed border crossing approval
process will ensure that American workers and consumers who
want access to lower costing energy supplies are not penalized
by political manipulation. Thank you.
[The prepared statement of Mr. Black follows:]
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Mr. Olson. Thank you, Mr. Black, and thank you to all of
you for your testimony. We will begin the question and answer
portion of this hearing, and I will begin my questioning with
the 5-minute rounds of questions.
The first question is for you, Mr. Black. And also before
questions I want to echo the concerns and prayers from Vice
Chairman Barton about losing your father, Bill, this past week.
As the voice of over 850,000 fellow Texans, your family has our
thoughts and prayers in their hearts.
Mr. Black, those 850,000 Texans I work for, my bosses
called constituents, get why oil pipelines are important. But
if I am the average American, why should I care about whether
cross-border pipelines are approved in a timely way? What would
you say to those people?
Mr. Black. Most Americans want lower energy prices and
available supplies of gasoline, diesel fuel, propane. We have
got great supplies in Canada to take advantage of and Keystone
XL and all of the State approvals along the process, they just
needed Washington to approve that small border crossing. If
that border crossing had been approved on a timely basis, today
Americans in your district and elsewhere would be reaping those
benefits, but they are not.
Mr. Olson. Now is 850,000 barrels correct per day,
somewhere in that ballpark, being refined there in South Texas,
Port of Houston, Port of Beaumont, Port Arthur; is that
correct?
Mr. Black. Absolutely, supporting thousands of refinery
worker jobs.
Mr. Olson. Thank you.
The next questions are for you, Mr. Soth and Mr. Santa.
First to Mr. Soth, Crosby, Texas is not my district, but as a
Texan I say welcome, howdy. But as you know, pipelines are
delayed, companies large and small face uncertainty. Not just
the pipeline owners, but the suppliers, too. There are the
shippers trying to move their products as well. These delays
hurt those in the construction industry by looking for some
predictable work. Can you talk about how red tape and
uncertainty hurts your members and the ripple effect beyond the
pipe?
Mr. Soth. Yes, as Mr. Black mentioned those are jobs
related to Keystone XL that just simply did not occur.
Operating Engineers probably have the most labor intensity of
any union on a pipeline job, and my written testimony mentioned
those other unions engaged in the process whether that is the
Laborers' International Union of North America, the Plumbers
and Pipefitters Union, as well as the Teamsters, and those are
good jobs that just won't occur. On Keystone XL, the remaining
segment of it on both sides of the border close to 3,000
operating engineer jobs alone associated with that. And again
those are great jobs.
For us in right-to-work communities like South Dakota that
have comparatively low wages where our members would earn over
$35 an hour on the check, that is before the extensive
investments in pensions, health care for workers' families, as
well as training investments that are made there. That is the
way we finance the Pipeline Training Fund in association with
the Pipe Line Contractors Association. That is 75 cents an hour
out of every hour worked on a pipeline job that an operating
engineer would contribute into that fund for the future of the
work force and to ensure that the workers have the skill
necessary to make that industry and that specific pipeline as
safe as can be.
Mr. Olson. Thank you. Mr. Santa, how does red tape and
uncertainty hurt your members?
Mr. Santa. Mr. Olson, it leads to capital investment being
parked on the sidelines. For example, we took a look at the
projects that are being held up by the lack of a quorum at the
FERC and our back-of-the-envelope calculation was that there
were about $14 billion worth of pipeline projects that had been
sidelined because of that.
The delays also have a multiplier effect because, for
example, in some cases certain activities can occur only in
certain months of the year due to environmental considerations,
like tree clearing. So if one misses that window for tree
clearing, maybe the certificate comes 2 months late, but tree
clearing can't occur for another 6 months. It also affects, as
Mr. Soth said, all of those pipeline contractors and workers
who are on the sideline.
And finally, there is an effect on consumers in terms of
more gas pipeline projects bring competitively priced gas that
brings down home heating bills, electricity bills because gas
is being used so much for electric generation, and also all of
the inputs that natural gas is used within manufacturing
processes that provide jobs and make the United States
competitive.
Mr. Olson. One quick question out of curiosity. You
mentioned a pipeline in Virginia that is going to be put a
thousand feet under the ground, is that correct, or a mile
underground?
Mr. Santa. The horizontal length of the drilling that will
go beneath the mountain is going to be approximately one mile.
Mr. Olson. One mile. Keystone is 50 feet, correct? How much
does that cost going down one mile as opposed going 50 feet
down which is very safe?
Mr. Santa. I do not have that figure, but I do know that it
adds considerably to the cost of the project. But the intent
there was to minimize the environmental impact of it and create
a path that would enable the project to get built.
Mr. Olson. In Texas we say that is a whole lot of money.
And my time has expired. I yield to the Ranking Member Mr. Rush
for 5 minutes.
Mr. Rush. I want to thank you, Mr. Chairman.
Mr. Black, I want to also join and extend my condolences to
you and your family on behalf of your father. I know that it
is--I admire your courage to come here in the midst of your
mourning and your grieving to appear before this committee. I
have a recently departed wife and so I know what it means and I
know how you feel. So thank you.
I have a question, Mr. Chairman, for both Ms. Danis and Mr.
Irvin. In your professional opinion, do you believe that
requiring other agencies to defer to FERC on the scope of
environmental review would help expedite the natural gas
permitting and hydropower licensing process leading to fewer or
more licenses; and the second part of the question is, are FERC
staff equipped to determine the scope of environmental review
over and above the experts in other agencies with jurisdiction
over these same issues?
Ms. Danis. We heard testimony earlier this morning from
FERC itself that FERC is not versed in other agencies' review
obligations under their substantive environmental statutes. So
allowing a nonenvironmental agency or requiring a
nonenvironmental agency to define the scope of review for other
sister Federal agencies or States' agencies acting under
delegated Federal authority would inevitably generate more
conflict, more litigation, and end up in really a morass of
permitting difficulties as the agencies' responsible for
implementing comprehensive environmental review programs, such
as the Clean Water Act or the Clean Air Act, are required to
report to FERC or to explain to FERC why they must require in-
depth inquiries of their own that exceed those that FERC would
require or look at under the Natural Gas Act.
Mr. Irvin. As I said in my statement, Mr. Rush, giving FERC
primacy over other Federal resource agencies, over State
agencies, and over Tribes in these issues would only lead to
additional litigation and environmental degradation. The
Federal resource agencies have the expertise on things like the
Endangered Species Act, Tribes' certainly very important
concerns that they want to uphold whether it be with regard to
fish and wildlife resources or things like sacred and ancestral
sites, and the States have great expertise and authority in
evaluating water quality certification under the Clean Water
Act.
There is also a well-established body of law under the
Federal Power Act that deals with this interaction among the
various agencies. And the courts have been very clear that the
resource agencies, the Federal resource agencies and the States
have the authority to enforce the Clean Water Act and the
Endangered Species Act and that FERC needs to defer to those
agencies in doing that. If as these bills would do, you upset
that well established body of law you have got to figure out
how is it going to work going forward which invariably will
lead to additional litigation.
Mr. Rush. I want to ask Mr. Soth. I come from a district
that has very high unemployment, and notwithstanding these
matters that we are discussing now in terms of the pipeline,
how do you foresee in your training programs, how do you deal
with the question of diversity in your training programs,
because my experience as a member of the city council in
Chicago is that we have always had problems diversifying so
many unions, trade unions, in Chicago. So how do you see this
going forward, the issue of diversity in your training and your
employees?
Mr. Soth. Apprenticeship, Congressman, is really one of the
key methods by which we bring new entrants into the industry,
and it is a key method to increase the diversity of the union.
Within our apprenticeship programs at the IUOE, 23 percent of
apprentices are people of color. We have eight percent of women
in our construction. Eight percent of apprentices are women in
our construction programs.
And that is an objective for our leadership to pursue
diversity and, really, apprenticeship is that primary method
and tool by which we increase our numbers of people of color
and women in the trade.
Mr. Olson. The gentleman's time has expired. The Chair
calls upon the gentleman from Virginia, Mr. Griffith, for 5
minutes.
Mr. Griffith. Thank you very much, Mr. Chairman, I do
appreciate it.
And Mr. Santa, you may be aware of this, but I am going to
use you for a minute as an example. I am always talking about
my district which is the 9th congressional district of Virginia
and that sometimes the policies of the previous administration
related to coal didn't take into account that every mountain is
different.
In relation to the pipeline that you are referencing, it is
a perfect example of why you have to look at every mountain a
little bit differently, because not only does it affect the
Appalachian Trail and the Blue Ridge Parkway as you mentioned,
and you mentioned it reduced the environmental risk, for those
who don't know and I am sure you do know, but that was all
about a salamander that lives on one mountain in Virginia. And
the mountains in Virginia, the Appalachians in Virginia have
lots of those kinds of things that happen, a salamander that
might only live in one or two mountain areas.
The same is true for our mineral deposits, and sometimes
one mountain will have lots of gas in the coal mine and the
next mountain won't have any gas at all and they can be very
close together. So you gave me a perfect example to explain to
folks what I have been talking about for years. You have got to
look at every mountain a little bit differently, which is why
we ought to leave the Clean Water Act and allow the States to
make a lot of these determinations because every mountain is
different, every river is different.
And that brings me to rivers, Mr. Irvin. You indicated, and
I am not going to ask you to give me a dissertation today. But
if you could send me the information on how you think that the
bill or one of the bills that we are talking about today
impacts riparian rights in the East I would greatly appreciate
it. Because it is of interest to me because we were talking
earlier today and a couple of us got together down here and
they were talking about how the rivers belong to everybody
except there are exceptions.
Because in my district there is a part of the river that
the king gave the entire river not just a piece of it, not just
the water, the whole river, and as a result of that there are
people who can actually keep other folks from floating down the
river because they own that surface right there, so it is very
interesting. But if you could forward that to me I would
greatly appreciate it.
Mr. Irvin. We will be happy to do that, Congressman. And
each State has the responsibility for water rights and water
law in their States, and it varies from State to State, with a
big difference between the West and the East.
Mr. Griffith. Yes, sir.
Mr. Irvin. That is why changing the law to give FERC
authority or primacy over States when they are seeking to
protect their rivers and waters is so problematic.
Mr. Griffith. And not only do we have kings' grants in
Virginia, but obviously the eastern law is based on the English
common law and the western law is based on the European
continental methods or models.
Mr. Leahey, now with the subject I was really supposed to
talk about in my questions, but I do find that your testimony--
and sometimes when you get late in a hearing, you think maybe
it is not making any difference; we are paying attention--but
the closed loop hydropower: My region is very interested in
this because we believe it is a way that we can bring life back
to some--obviously you aren't going to have hundreds or
thousands--but a couple of abandoned coal mines in our area. So
I would ask you to discuss what you believe might be some of
the possibilities for using that kind of technology or that
kind of a system in our abandoned mines.
Mr. Leahey. Sure, absolutely. And as FERC testified earlier
today, they have already approved one project that has a very
similar configuration, a different type of mine than a coal
mine. We have seen a growing list of proposed projects across
the United States for both open loop and closed loop pump
storage in the type of arrangement that you are talking about,
so we see that there is great potential for these types of
projects.
One thing that I would like to say with regards to the
modernization bill is that we do not read that bill to repeal
any of the authorities of the States, the Tribes, or the
agencies. They still have those responsibilities and NHA
believes those are appropriate responsibilities under those
laws. What we believe the bill tries to do is get FERC in
charge of putting together the coordination of the schedule.
And as others have talked about on this panel and as I said
in my testimony, when you have projects that are going not just
2 years, 4 years, 6 years, but 8, 10, 12, or 14 years from
concept to construction and operation that is almost a death
knell for those projects.
Mr. Griffith. And I appreciate that. And I will take a look
at that language very carefully after having reviewed Mr.
Irvin's information, because I am very interested in property
rights and the historical rights of the various States.
Likewise on the SHORE Act, which you all have not taken a
position on.
One of the reasons that I really like that act it was
introduced previously by my colleague Robert Hurt. He decided
to retire, and since I am affected by it too I picked up the
language that has previously been approved by the House. But
one of the reasons I am so interested in it is I did some
property right cases on the lake one time and they don't have
all the power that--they didn't acquire as much as they thought
they acquired when they did the deeds back in the 1950s and
they are, I think, stepping on some property rights, so I will
be looking at that too.
Mr. Leahey. Well, and Congressman, we would be happy to
work with you on that bill going forward. Like I said in my
testimony, we just want to be sure that the safe operation of
the project is, and our members are able to continue to do
that.
Mr. Griffith. And I think we can have both interests
secured in the end, but I appreciate it very much. And with
that Mr. Chairman, I yield back.
Mr. Olson. The gentleman yields back. The Chair now calls
upon the gentleman from California, Mr. Peters, for 5 minutes.
Mr. Peters. Thank you, Mr. Chairman. First, I want to start
by acknowledging my Duke classmate. It is traditional for you
to talk about Duke Basketball with Mr. Santa. We skipped over
that part, but I think we will leave it to another time.
I have some questions about hydro. I want to ask Mr.
Leahey, you know, there has been concern about whether there is
a patchwork of State regulations that talk about whether
hydropower counts as renewable. The draft legislation that we
are considering today attempts to take that on. Are you
satisfied that this draft clarifies that so that all hydro is
considered renewable?
Mr. Leahey. I believe there is a sense of Congress in the
provision that would say that all hydro is renewable and then
it would go back and amend the EPAct of 2005 definition to
include all hydro as renewable. I think that is very important.
And to the extent that other statutes and regulations parry off
of that definition, then I think that will create, it will do
what it is intended to do which is to make hydro renewable. If
there are other statutes or regulations which have their own
definitions then I am not sure, we may have to do some more.
Mr. Peters. And you just mentioned that there is in your
written testimony there is discussion of the avoided greenhouse
gas emissions from hydro. Mr. Irvin made a comment about
methane. Have you tried to quantify exactly how much greenhouse
gas we avoid by using hydro?
Mr. Leahey. There is research that is being done by the
Department of Energy and internationally. I would note that the
International Panel on Climate Change has not regulated in this
area or made recommendations in this area because of the fact
that the science is not there yet. In addition, there is this
issue with regards to net emissions of reservoirs. There is
some of this degassing that happens naturally, and we would
also point out that reservoirs are multi-use, right, so a
project is not--any emissions, if there are any, should not be
ascribed to the hydro generation when it is also potentially
being used for water supply for cities or for irrigation for
farms.
Mr. Peters. OK, and any research that you had on that if
you could forward it to us would be great. It is my
understanding that about 40 percent of the U.S. Army Corps'
hydropower fleet is 50 years old or older and increasingly that
the Army Corps is engaging in public-private partnerships to
finance many of its projects. Do you see an opportunity for
that in the hydropower realm?
Mr. Leahey. It is probably the largest opportunity, near
term opportunity that we have. Of the projects that have been
identified by the Department of Energy, 80 of the top 100
projects are on Army Corps of Engineers' dams.
Mr. Peters. Do you see that the law authorizes today those
partnerships, public-private partnerships, to finance those
improvements?
Mr. Leahey. Most of the financing, in my understanding most
of the financing that is being done is being done by the
private entity and then coming on to the Corps facility. There
might be some opportunities for additional public-private
partnerships with the Corps directly.
Mr. Peters. Yes, I just want to make sure. Does the law
authorize this for the hydro facilities? Do you think it does?
Mr. Leahey. I would have to get back to you on that one. I
know that there are some differences between what the Corps can
do with----
Mr. Peters. Apparently there is some concern within the
Army Corps that it doesn't, and if you think it needs to be
changed we would appreciate knowing that.
Mr. Leahey. I think there are some changes that are needed.
I would just need to get back to you on what those specifics
are.
Mr. Peters. Thank you.
And then I ask Mr. Irvin. I just think we argue a lot about
process. And I don't want to give an misimpression about my
interest in hydro, I want resources to be protected, but I see
a concern in the amount of time it takes. So with my minute
left, do you have ideas about how we could reduce the time it
takes to get these permits and these hydro facilities operating
and still protect resources? Is there a way we can reduce the
amount of time?
Mr. Irvin. Certainly. We have laid out several of these in
my written testimony, Mr. Peters. They include things like
presumptive inclusion in the FERC study of plans of studies
requested by Federal, State, and Tribal agencies, do that up
front. Promoting memoranda of understanding between FERC, the
Tribes, and the States to improve the coordination, again do
that up front.
There is a need to increase appropriations to the agencies.
I know that that isn't always a popular topic, but the fact is
that they need more money and staff in order to do a better
job. And we also can have improved coordination between FERC
and the Army Corps of Engineers on these various projects.
Mr. Peters. Yes. And I would just say I would hope we can
have more conversation about this. A lot of this is not really
changing the process. I think it is adding more to the process
and it provides--I think it is still difficult for me to
understand in an objective way what improving coordination
means and how we force that from this room.
So I will look forward to more conversation about it and
hope that we can come up with a way that advances this interest
that I have in reducing greenhouse gases, but also protecting
rivers which is what we all want. And Mr. Chairman, thank you
for the time.
Mr. Olson. The gentleman's time has expired. The Chair
would like to inform the gentleman and Mr. Santa that my wife
is a 1985 Duke graduate, so the NCAA basketball tournament was
a very, dark, dark time in the Olson house.
The Chair now calls upon the gentleman from Missouri, Mr.
Long, for 5 minutes.
Mr. Long. Thank you, Mr. Chairman. I am glad I came to this
hearing today because I didn't even know they played basketball
at Duke.
[Laughter.]
Mr. Long. Mr. Santa, you mentioned in your testimony that
the pipeline review process is disjointed. I didn't know if
that was meant as a pun or not, but that being said could you
discuss why the process is disjointed and do you believe that
the discussion draft adequately addresses this issue to
encourage a more coordinated review process?
Mr. Santa. Thank you for the question, Mr. Long. As Vice
Chairman Barton observed earlier, I mean the discussion draft
is trying to get at what the Congress and this committee was
very influential and it did in the Energy Policy Act of 2005,
in finding a way to affect that congressional intent.
I think that the process is somewhat disjointed because as
was noted by Mr. Turpin earlier there are other Federal and
State agencies that have got multiple mandates, and for them at
times issuing these permits that are essential to construct
pipeline infrastructure may not be a high priority. They may
not have the resources to do it. And as I noted in my
testimony, there are times when there is quite a bit of
unreasonable delay that affects the ability to construct these
projects on a timely basis.
I do think that the discussion draft would improve the
process. In our testimony we offer some examples for ways that
it can be strengthened, so we think the committee is headed in
the right direction with the discussion draft and look forward
to working with the committee on perfecting it.
Mr. Long. And the current regulations provide for
establishing deadlines for final permitting determinations.
Could you discuss how effective this current process is?
Mr. Santa. It unfortunately has not been very effective.
One of the problems is that notwithstanding that being part of
the 2005 law, there wasn't really anything put in there for
effective enforcement in it. The only recourse was for the
pipeline applicant to take that permitting agency to court.
That is awfully difficult because effectively you are suing the
agency from whom you are trying to get the permit, and also the
standard of review applied by Federal courts of appeal tends to
be pretty permissive and highly deferential to the agencies.
And so, in the limited instances where pipelines have chosen to
litigate under that provision, it has not been very satisfying.
Mr. Long. Do you believe the discussion draft that it
provides accountability for failure to meet the deadlines?
Mr. Santa. I believe that it does to the extent that it
requires those agencies that have not met the deadlines to
report to the Congress. It provides a process for attempting to
resolve it within the administration and also requires them to
specify a plan for what they can do to complete their work.
It is a challenge, because as has been noted by the
witnesses on the committee those other agencies are acting
pursuant to their particular legal mandates. We respect that
but we are also looking for a process that will give us more
predictability and more timeliness in terms of obtaining
permits that are needed.
Mr. Long. OK, thank you. And with that Mr. Chairman, I
yield back.
Mr. Olson. The gentleman yields back and the Chair reminds
the gentleman the last time Duke played Missouri in the
Tournament was March 17th of 2001 in the East Regional Final:
Duke 94, Missouri 81.
Mr. Long. I didn't know they played basketball in Missouri.
[Laughter.]
Mr. Olson. Seeing that there are no further Members wishing
to ask questions for the second panel--oh, I am sorry. I am
sorry, Paul. I apologize. The Chair now calls upon the
gentleman from New York, Mr. Paul Tonko, for as much time as he
wants.
Mr. Tonko. Rescued by the buzzer. Thank you, Mr. Chairman.
Ms. Danis, as you know, the Interagency Coordination
discussion draft would allow remote surveying data to be
considered by agencies. Can you explain how aerial data may be
insufficient?
Ms. Danis. Aerial data, as we heard testimony earlier this
morning, provides an extremely limited view of what is on the
ground. It cannot be accurate with respect to wetlands
delineation. It cannot be accurate with respect to endangered
species, vernal ponds, seeps, vegetation, other things that
require detailed onsite surveys.
In the provision in the amendments for aerial survey data,
requiring ancillary Federal authorizations to consider those
data simply decreases efficiency because it in essence asks,
for example, States under 401 Certification to consider an
application based on guesswork the first time, and then to go
back and to reconsider that same application once they can make
a true determination of what the onsite environmental impacts
would be. It is a very inefficient way of approaching it.
And one way to increase efficiency and reduce delay in the
permitting processes would be to require the applicants to come
to the table with completed applications. First, when they
approach FERC and to not put FERC in the position of routinely
asking for deficiency, submitting deficiency notices, asking
for additional environmental data, but to come to the table
from the outset with a well-conceived plan supported by data.
Mr. Tonko. Thank you. And in addition to perhaps not
providing the sort of accuracy we need, do you also see that
requiring agencies would be ultimately caused to spend more
time perhaps and more resources in reviewing applications
because of the concerns you just mentioned?
Ms. Danis. It would, because each agency under their
enabling statutes retains the authority to determine when they
have sufficient and verified data to make that assessment. This
would inevitably increase those agencies' resource expenditure
to consider applications that are substantially incomplete from
an environmental groundtruthing perspective.
Mr. Tonko. Thank you.
And Mr. Irvin, in the licensing study improvement section,
I believe it is page 19 of the Hydropower Policy Modernization
discussion draft, we would place the onus on agencies rather
than applicants to prove that a study is not duplicative. How
might that undermine an agency's ability to get the information
that agency needs especially when dealing with a potentially
short timetable?
Mr. Irvin. Well, agencies are of course stretched thin for
all of the work that they have to do and anytime you put the
burden of proof on the agency to basically to disprove
something you are adding to that burden and you are making it
much more difficult for them to carry out their
responsibilities. And what we are talking about here is a
licensing process where a private entity wants to do something
to make money at it and it seems fair to require that going
through that licensing process they bear the burden of making
the case for why they are entitled to a license.
Mr. Tonko. Would there be any reason that the burden of
proof should not fall on the applicant when asked to meet study
requests by agencies?
Mr. Irvin. Not that I can think of.
Mr. Tonko. OK, thank you. And Mr. Irvin, again, at least in
some cases delays in hydropower application and evaluation seem
to be primarily caused by failure to provide all of information
necessary for Federal and State agencies to do their jobs. How
important is it to get this information and include all
interested stakeholders early on in the process?
Mr. Irvin. It is absolutely crucial. If you pick the right
site and you get the information lined up, the statistics show
that the process through FERC is actually fairly expeditious, a
couple of years to get a license. What often happens is that an
applicant will choose to go through the traditional licensing
process which takes longer. And also it sometimes is actually
in the interest, particularly in a license renewal situation,
for the applicant to have the process take longer, because what
happens then is that each year they get a 1-year extension of
their existing license they don't have to undertake any of the
environmental mitigation that would be required once they get a
new license, and so continuing the process for a long time
actually may be in the interest of the applicant.
That is obviously not a preferred outcome. We want to get
through these processes. We want to get the new requirements in
place. We want the applicant to get their license
expeditiously. We can do that through the existing processes.
We don't have to weaken existing environmental law in order to
achieve that.
Mr. Tonko. Thank you.
Mr. Chair, is there an opportunity for one more quick
question?
Mr. Olson. Yes, sir, absolutely.
Mr. Tonko. Thank you.
Mr. Irvin and Ms. Danis, though you provided testimony on
completely different subjects, your statements were remarkably
similar in that they both focused much of their time on the
relationship between the legislation before us and the Clean
Water Act and how that legislation would undermine it.
Specifically, you both focused on how the bills would harm
States' rights under Section 401 of the Clean Water Act as well
as water rights generally.
So my question to each of you is, it seems to me that these
bills are in a large measure attempts to make significant
changes to Section 401 of the Clean Water Act and to a somewhat
lesser degree in Section 7 of the Endangered Species Act. Would
you agree with that assessment?
Mr. Irvin. Absolutely. That is one of the primary problems
of these bills, is that it undermines both the Endangered
Species Act and the Clean Water Act, and in particular for the
Clean Water Act the State authority to decide what qualifies
for a water quality certification.
Mr. Tonko. Thank you, and Ms. Danis?
Ms. Danis. I agree with what Mr. Irvin just said, and
additionally it is really important that those comprehensive
and well-thought-out national policies that are embodied in the
Clean Water Act and the Clean Air Act are not scuttled for the
purposes of consideration of private applicants' projects on a
case-by-case basis, but really affect the Natural Gas Act goals
of balancing those interests.
Mr. Tonko. Thank you very much.
With that Mr. Chair, I yield back.
Mr. Olson. Thank you, Mr. Tonko. We saved the best for
last. Now seeing there are no further members wishing to ask
questions for the second panel, I would like to thank our
witnesses, Mr. Soth, Mr. Leahey, Mr. Irvin, Ms. Danis, Mr.
Santa, and Mr. Black for being here today.
As we conclude, I would like to remind everybody here----
Mr. Rush. Mr. Chairman?
Mr. Olson. Yes, sir.
Mr. Rush. Mr. Chairman, I began this hearing with some very
serious concerns about the status of our chairman, Fred Upton.
Have you heard, is he all right?
Mr. Olson. Chairman Fred Upton is fine. He is doing well.
He has been working on the healthcare bill. God bless Fred
Upton.
As we conclude, I would like to remind everybody here that
my Houston Rockets are looking to go two games to zero up
against the San Antonio Spurs. Tipoff is at 9:30 p.m., so take
a nap.
I would also like to ask unanimous consent to submit the
following documents for the record: a letter from the Edison
Electric Institute; a letter from the Modesto Irrigation
District and Turlock Irrigation District of California; a
letter from the Southern California Public Power Authority; a
letter from the Public Utility District No. 1 of Chelan County,
Washington--I hope I pronounced that right; a letter from the
Jordan Hydroelectric Limited Partnership; a letter from the
County of Pulaski, Virginia; a letter from the NECA, the
National Electrical Contractors Association; a letter from
Public Utility District No. 1 of Okanogan County, Washington; a
letter from the American Public Power Association; a letter
from the National Electrical Contractors Association; testimony
of Kevin Colburn on behalf of the American Whitewater; a series
of letters collected by the Hydropower Reform Coalition; a
letter from the Western Governors' Association; a letter from
Mayor Linda Dahlmeier of Oroville, California; a letter from
the Hydropower Reform Coalition; and finally, the FAST-41
Federal Permitting Improvement Steering Council Fiscal Year
2016 Annual Report to Congress.
That is it. I would ask unanimous consent they be submitted
for the record. Without objection, so ordered.
[The information appears at the conclusion of the
hearing.]\1\
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\1\ Some of the information does not appear at the conclusion of
the hearing but has been retained in committee files and is available
at http://docs.house.gov/Committee/Calendar/
ByEvent.aspx?EventID=105916.
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All Members, that they have 10 business days to submit
additional questions for the record. I ask witnesses to submit
their response in 10 business days of receipt of those
questions. Without objection, this subcommittee is adjourned.
[Whereupon, at 1:14 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
Prepared statement of Hon. Fred Upton
Today the subcommittee begins what I expect will be a
thoughtful and deliberative process to examine legislation
addressing pipeline and hydropower infrastructure
modernization. We will review 10 bills, some of which have
already been introduced, while others remain in the form of a
discussion draft as we continue to work out the details. This
committee has developed an extensive record on the issues these
bills address. As some will recall, hydropower and gas pipeline
infrastructure modernization were included in the energy bill
conference last Congress. We began this Congress by picking up
where we left off, with hearings examining the challenges and
opportunities to expanding hydropower generation and promoting
pipeline infrastructure improvement and expansion. We've heard
from a variety of stakeholders, including job creators,
contractors, labor, Tribal interests, consumers, and private
citizens affected by development. Permitting pipeline and
hydropower infrastructure often requires extensive consultation
with more than a dozen Federal and State agencies. Today, we
will hear from the Federal Energy Regulatory Commission, which
is the coordinating agency for these reviews. As we move
forward, we will continue to engage with States and other
Federal permitting agencies that have a participating role to
ensure that we are balancing the need to update and modernize
our infrastructure with important safety, environmental, and
consumer protections.
The legislation before us today takes important strides
toward modernizing our Nation's energy infrastructure. The
hydropower policy modernization discussion draft encompasses
many of the bipartisan reforms that received support in both
the House and the Senate last Congress. The draft would
designate FERC as the lead agency for hydropower licensing and
encourage greater coordination and cooperation among the dozens
of agencies involved in the permitting process. We are also
examining discussion drafts that would promote new hydropower
development at existing nonpowered dams and the development of
closed-loop pumped storage projects, like the one in Ludington,
Michigan, my home State. As we've heard in testimony before the
committee, these projects are a win-win; minimal environmental
impact, new investments, jobs, and added benefits to the grid.
Another bill would streamline the permitting process for small
conduit hydro, which is an emerging source of renewable energy
that can be bolted on to existing infrastructure to provide
flexible and reliable power.
We are also taking a close look at legislation to improve
the process to permit interstate natural gas pipelines and
cross-border energy infrastructure. The discussion draft
promoting interagency coordination for review of natural gas
pipelines will streamline the process and increase public
transparency. Together, these reforms will bring more certainty
to the permitting process, which will encourage investments,
create jobs, and lower prices for consumers--especially those
that are already paying too much for energy due to pipeline
bottlenecks and capacity shortages.
The discussion draft promoting cross-border energy
infrastructure would, for the first time, enshrine in law a
uniform and transparent process to authorize crossborder oil
and natural gas pipelines and electric transmission facilities.
As we've all seen with the Keystone XL pipeline, the current
presidential permit process is broken beyond repair. The draft
legislation would bring predictability and transparency to the
process. It will allow the technical experts at FERC and DOE to
review proposed projects without politics getting in the way.
Importantly, the draft legislation will not touch bedrock
environmental laws like NEPA, the Clean Air Act, or the Clean
Water Act. It will also preserve and even strengthen
opportunities for stakeholders and property owners to have
their voice heard.
Together, these 10 bills represent the beginning of an
ambitious effort to modernize our energy infrastructure,
increase access to affordable and reliable energy, and lower
prices for consumers. I want to thank the witnesses for
appearing before us today, and I look forward to their
testimony.
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