[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]



                 HEARING ON ``MODERNIZING THE NATURAL GAS
                  ACT TO ENSURE IT WORKS FOR EVERYONE''

=======================================================================

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON ENERGY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________


                            FEBRUARY 5, 2020

                               __________

                           Serial No. 116-95





                 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]






      Printed for the use of the Committee on Energy and Commerce

                   govinfo.gov/committee/house-energy
                        energycommerce.house.gov

                               ______
                                 

                 U.S. GOVERNMENT PUBLISHING OFFICE

50-300 PDF                WASHINGTON : 2024
















                    COMMITTEE ON ENERGY AND COMMERCE

                     FRANK PALLONE, Jr., New Jersey
                                Chairman

BOBBY L. RUSH, Illinois              GREG WALDEN, Oregon
ANNA G. ESHOO, California              Ranking Member
ELIOT L. ENGEL, New York             FRED UPTON, Michigan
DIANA DeGETTE, Colorado              JOHN SHIMKUS, Illinois
MIKE DOYLE, Pennsylvania             MICHAEL C. BURGESS, Texas
JAN SCHAKOWSKY, Illinois             STEVE SCALISE, Louisiana
G. K. BUTTERFIELD, North Carolina    ROBERT E. LATTA, Ohio
DORIS O. MATSUI, California          CATHY McMORRIS RODGERS, Washington
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, Vice     BILL JOHNSON, Ohio
    Chair                            BILLY LONG, Missouri
DAVID LOEBSACK, Iowa                 LARRY BUCSHON, Indiana
KURT SCHRADER, Oregon                BILL FLORES, Texas
JOSEPH P. KENNEDY III,               SUSAN W. BROOKS, Indiana
    Massachusetts                    MARKWAYNE MULLIN, Oklahoma
TONY CARDENAS, California            RICHARD HUDSON, North Carolina
RAUL RUIZ, California                TIM WALBERG, Michigan
SCOTT H. PETERS, California          EARL L. ``BUDDY'' CARTER, Georgia
DEBBIE DINGELL, Michigan             JEFF DUNCAN, South Carolina
MARC A. VEASEY, Texas                GREG GIANFORTE, Montana
ANN M. KUSTER, New Hampshire
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
A. DONALD McEACHIN, Virginia
LISA BLUNT ROCHESTER, Delaware
DARREN SOTO, Florida
TOM O'HALLERAN, Arizona
                                 ------                                

                           Professional Staff

                   JEFFREY C. CARROLL, Staff Director
                TIFFANY GUARASCIO, Deputy Staff Director
                MIKE BLOOMQUIST, Minority Staff Director






                         Subcommittee on Energy

                        BOBBY L. RUSH, Illinois
                               Chairman

SCOTT H. PETERS, California          FRED UPTON, Michigan
MIKE DOYLE, Pennsylvania               Ranking Member
JOHN P. SARBANES, Maryland           ROBERT E. LATTA, Ohio
JERRY McNERNEY, California, Vice     CATHY McMORRIS RODGERS, Washington
    Chair                            PETE OLSON, Texas
PAUL TONKO, New York                 DAVID B. McKINLEY, West Virginia
DAVID LOEBSACK, Iowa                 ADAM KINZINGER, Illinois
G. K. BUTTERFIELD, North Carolina    H. MORGAN GRIFFITH, Virginia
PETER WELCH, Vermont                 BILL JOHNSON, Ohio
KURT SCHRADER, Oregon                LARRY BUCSHON, Indiana
JOSEPH P. KENNEDY III,               BILL FLORES, Texas
    Massachusetts                    RICHARD HUDSON, North Carolina
MARC A. VEASEY, Texas                TIM WALBERG, Michigan
ANN M. KUSTER, New Hampshire         GREG WALDEN, Oregon (ex officio)
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
A. DONALD McEACHIN, Virginia
TOM O'HALLERAN, Arizona
LISA BLUNT ROCHESTER, Delaware
FRANK PALLONE, Jr., New Jersey (ex 
    officio)








                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Jerry McNerney a Representative in Congress from the State 
  of California, opening statement...............................     2
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     3
    Prepared statement...........................................     4
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     5
    Prepared statement...........................................     7
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................     8
    Prepared statement...........................................    10
Hon. Bobby L. Rush, a Representative in Congress from theprepared 
  statement......................................................   131

                               Witnesses

Cheryl Lafleur, Chairman (Former), Federal Energy Regulatory 
  Commission.....................................................    11
    Prepared statement...........................................    14
    Answers to submitted questions...............................   181
Michael E. McMahon, Senior Vice President, General Counsel, and 
  Secretary, Boardwalk Pipelines, LP.............................    17
Prepared statement \1\
    Answers to submitted questions...............................   190
Richard Worsinger, Treasurer, Board of Directors, American Public 
  Gas Association................................................    18
    Prepared statement...........................................    20
    Answers to submitted questions...............................   192
Susan Tierney, Senior Advisor, Analysis Group, INC...............    32
    Prepared statement...........................................    34
N. Jonathan Peress, Senior Director, Energy Markets and Utility 
  Regulation, Environmental Defense Fund.........................    79
    Prepared statement...........................................    81
Answers to submitted questions \2\
Maya Van Rossum, Leader, Delaware Riverkeeper Network............    92
Prepared statement \3\
Gene Barr, President and CEO, Pennsylvania Chamber of Business 
  and Industry...................................................    93
    Prepared statement...........................................    96

----------
\1\ The information has been retained in committee files and also 
  is available at https://docs.house.gov/meetings/IF/IF03/
  20200205/110468/HHRG-116-IF03-Wstate-McMahonM-20200205.pdf.
\2\ Mr. Peress did not answer submitted questions for the record 
  by the time of publication.
\3\ The information has been retained in committee files and also 
  is available at https://docs.house.gov/meetings/IF/IF03/
  20200205/110468/HHRG-116-IF03-Wstate-vanRossumM-20200205.pdf.
David Mallino, Legislative and Political Director, Laborers 
  International Union of North America...........................   104
    Prepared statement...........................................   106
David Bookbinder, Chief Counsel, Niskanen Center.................   111
Prepared statement \4\
Jennifer Danis, Staff Attorney, Environmental Law Clinic, 
  Columbia University School of Law..............................   112
Prepared statement \5\

                           Submitted Material

Report ``Pipeline Cost Recovery Report'' Natural Gas Supply 
  Association, by Richard Worsinger, submitted Mr. Rush \6\
Statement of February 4, 2020, to Mr. Rush and Mr. Upton, 
  Industrial Energy Consumer of America, by Paul N. Cicio, 
  President, submitted by Mr. Rush...............................   132
Letter of February 3, 2020, to the Subcommittee on Energy and 
  Committee on Energy and Commerce, from the Coalition, submitted 
  by Mr. Rush....................................................   143
Letter of February 4, 2020, to Committee and Energy and Commerce, 
  from Congressional Research Service, submitted by Mr. Rush.....   146
Letter of March 7, 2016, by Ross Eisenberg, Vice President, 
  Energy and Resources Policy, National Association 
  Manufacturers, submitted by Mr. Rush...........................   156
Letter of February 4, 2020, by Rachel Jones, Vice President, 
  Energy and Resources Policy, National Association 
  Manufacturers, submitted by Mr. Rush...........................   158
Research ``Energizing Manufacturing Natural Gas and Economic 
  Growth,'' submitted by Mr. Rush................................   160
Report ``The Economic Benefits of Natural Gas Pipeline 
  Development on the Manufacturing Sector,'' submitted by Mr. 
  Rush \7\
Letter of February 4, 2020, to Mr. Pallone, et al., from Roseanna 
  Sacco, submitted by Mr. Rush \8\
Letter of February 4, 2020, to Mr. Pallone and Mr. Walden, by 
  Brendan Mysliwiec, Director of Federal Policy and Legislation, 
  Appalachian Trail Conservancy, submitted by Mr. Rush...........   168
Letter of February 5, 2020, to Mr. Rush and Mr. Upton, by Denver 
  Riggleman, Member of Congress, submitted by Mr. Rush...........   175
Letter of January 30, 2020, to Mr. Butterfield and Mr. Long, from 
  Associations Group, submitted by Mr. Rush......................   177
Letter to Mr. Griffith, from Karolyn Givens, submitted by Mr. 
  Rush...........................................................   179

----------
\4\ The information has been retained in committee files and also 
  is available at https://docs.house.gov/meetings/IF/IF03/
  20200205/110468/HHRG-116-IF03-Wstate-BookbinderD-20200205.pdf.
\5\ The information has been retained in committee files and also 
  is available at https://docs.house.gov/meetings/IF/IF03/
  20200205/110468/HHRG-116-IF03-Wstate-DanisJ-20200205.pdf.
\6\ The information has been retained in committee files and also 
  is available at https://docs.house.gov/meetings/IF/IF03/
  20200205/110468/HHRG-116-IF03-Wstate-WorsingerR-20200205-
  SD001.pdf.
\7\ The information has been retained in committee files and also 
  is available at https://docs.house.gov/meetings/IF/IF03/
  20200205/110468/HHRG-116-IF03-20200205-SD006.pdf.
\8\ The information has been retained in committee files and also 
  is available at https://docs.house.gov/meetings/IF/IF03/
  20200205/110468/HHRG-116-IF03-20200205-SD007.pdf.









 
                 HEARING ON ``MODERNIZING THE NATURAL GAS
                  ACT TO ENSURE IT WORKS FOR EVERYONE''

                              ----------                              


                      WEDNESDAY, FEBRUARY 5, 2020

                  House of Representatives,
                            Subcommittee on Energy,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:00 a.m., in 
room 2322 Rayburn House Office Building, Hon. Bobby L. Rush 
(chairman of the subcommittee) presiding.
    Members present: Representatives Rush, Peters, Doyle, 
Sarbanes, McNerney (vice chair, presiding), Tonko, Loebsack, 
Butterfield, Welch, Schrader, Kennedy, Veasey, Kuster, Kelly, 
Barragan, O'Halleran, Pallone (ex officio), Upton (subcommittee 
ranking member), Latta, Rodgers, Olson, McKinley, Griffith, 
Johnson, Bucshon, Flores, Hudson, Walberg, Duncan, and Walden 
(ex officio).
    Staff present: Jeffrey C. Carroll, Staff Director; 
Catherine Giljohann, FERC Detailee; Waverly Gordon, Deputy 
Chief Counsel; Tiffany Guarascio, Deputy Staff Director; Omar 
Guzman-Toro, Policy Analyst; Zach Kahan, Outreach and Member 
Service Coordinator; Rick Kessler, Senior Advisor and Staff 
Directory, Energy and Environment; Brendan Larkin, Policy 
Coordinator; Jourdan Lewis, Policy Analyst; Elysa Montfort, 
Press Secretary; Joe Orlando, Staff Assistant; Lino Pena-
Martinez, Staff Assistant; Alivia Roberts, Press Assistant; Tim 
Robinson, Chief Counsel; Medha Surampudy, Professional Staff 
Member; Rebecca Tomilchik, Staff Assistant; Tuley Wright, 
Energy and Environment Policy Advisor; Jennifer Barblan, 
Minority Chief Counsel, Oversight and Investigation; S. K. 
Bowen, Minority Press Secretary; Theresa Gambo, Minority Human 
Resources/Office Administrator; Peter Kielty, Minority General 
Counsel; Ryan Long, Minority Deputy Staff Director; Mary 
Martin, Minority Chief Counsel, Energy and Environment and 
Climate Change; Brandon Mooney, Minority Deputy Chief Counsel, 
Energy; Kate O'Connor, Minority Chief Counsel, Communications 
and Technology; Brannon Rains, Minority Legislative Clerk; and 
Peter Spencer, Minority Senior Professional Staff Member, 
Environment and Climate Change.
    Mr. McNerney [presiding]. The committee will now come to 
order. Today we will hear from a number of witnesses on 
modernizing the Natural Gas Act to ensure that it works for 
everyone. Before we begin today's opening statements, I would 
like to make a few announcements about today's proceedings.
    First, I would like to remind everyone in the audience that 
any manifestation of approval or disapproval of committee 
proceedings is in violation of the rules of the House and of 
this committee. Prohibited acts include holding signs, yelling 
statements from the audience, and any other acts that could 
disrupt today's proceedings. I ask all persons of the audience 
to refrain from such actions during today's hearings.
    Second, I would like to acknowledge that Congresswoman 
Fletcher from Texas is scheduled to be here who has joined us 
for today's hearings. We are happy to have her, and under the 
committee rules our colleagues are welcome to join us for our 
other hearings, although they are unable to give opening 
statements or question witnesses.
    The Chair now recognizes himself for 5 minutes.

OPENING STATEMENT OF HON. JERRY Mc NERNEY, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    The Natural Gas Act was enacted in 1938, created to 
regulate the interstate transport of natural gas. Today we 
convene this hearing to further examine this, the function of 
this legislation, and its broad impact on our communities. To 
this day, the Federal Energy Regulatory Commission continues to 
manage pipeline applications through their authority under this 
act.
    However, in recent years, the Commission's administration 
of the act has come under scrutiny. Specific concerns include 
issues related to rehearing processes, towing orders, imminent 
domain, landowner rights, and the impact of its infrastructure 
on climate change. For example, FERC's ability to protect 
natural gas customers against unjust and unreasonable rates is 
compromised by its inability to set a refund date, and unlike 
the Commission's ability to do so under the Federal Power Act 
for electric utilities.
    This inequity exists because Congress amended the Federal 
Power Act in 1988 to provide FERC with refund authority in 
electric rates and, as yet, passed a subsequent fix to the NGA 
to provide refund authority on par with the Federal Power Act. 
Further, disagreements exist among FERC Commissioners, 
stakeholders, and natural gas pipeline companies as to what 
extent, if at all, FERC must consider the climate impacts of 
its pipelines as a part of its determination that the project 
is or is not in the public interest.
    I thank our witnesses for their participation in today's 
hearing and look forward to discussing how to make sure this 
law is working in support of everyone's interest.
    The Chair now recognizes Mr. Upton, ranking member of the 
Subcommittee on Energy, for 5 minutes for his opening 
statement.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Well, thank you, my friend and chairman, for 
holding today's hearing to examine the role of natural gas in 
our economy and FERC's responsibilities under the Natural Gas 
Act. So, we know that pipelines are indeed the safest, most 
efficient way to move energy long distances, and they are 
certainly vital to our nation's economy. Over 2-1/2 million 
miles of energy pipelines crisscross the nation already, and 
the need for safe and reliable energy infrastructure continues 
to grow.
    Natural gas is an abundant resource across the country, and 
new discoveries in extraction methods, thanks to fracking and 
directional drilling, have led to a dramatic rise in domestic 
production. America is now the world's leading producer of 
natural gas, and we are certainly reaping the benefits. The 
economy is stronger, the shale boom has created millions of 
jobs, and we are more energy secure in fact, independent and 
natural gas is helping to reduce carbon emissions both at home 
and abroad.
    In Michigan, we have cut our emissions by over 25 percent 
in the last decade thanks to natural gas. The Natural Gas Act 
is the principal federal law that regulates the sale and 
transportation of natural gas in interstate commerce. And while 
the natural gas industry has undergone remarkable changes over 
the decades since its passage in 1938, the law has withstood 
the test of time and does remain sound. Through the passage of 
the Natural Gas Act and its amendments, Congress recognized the 
need to establish a framework to encourage competition within 
the natural gas industry, protect consumers from monopoly 
pricing, and promote interstate commerce. As a result, 
pipelines today are subject to significant federal oversight 
and regulations.
    Under the Natural Gas Act, FERC has jurisdiction over 
virtually all aspects of interstate pipeline operations. Before 
a pipeline is constructed, FERC must conduct a rigorous 
environmental review and issue a certificate that finds the 
pipeline is necessary in the public interest. FERC also has the 
obligation to ensure that consumers are protected, and the 
rates charged for interstate pipeline services are just and 
reasonable.
    FERC has ample authority under current law to require 
prospective changes in the rates charged by a pipeline company 
when it can be demonstrated that the rates are no longer just 
and reasonable. For example, following the passage of the Tax 
Cuts and Jobs Act, FERC required all 129 jurisdictional gas 
pipelines to make informational filings, and many operators 
ended up lowering their rates for customers.
    FERC's regulatory oversight extends beyond pipeline siting 
and rates. If a pipeline operator wants to shut down a pipeline 
facility that is uneconomic, they have got to seek permission 
and approval from FERC in order to protect consumers from 
service interruptions or rate increases.
    Despite the fact that pipelines are the safest, most 
efficient form of transportation and despite the fact that 
natural gas is helping to reduce CO2 emissions across our 
economy, it has become increasingly difficult and costly to 
make it through the FERC siting process. Pipeline opponents are 
challenging projects at virtually every turn, using every tool 
to delay or block pipeline projects. States are getting more 
involved, too, by delaying or withholding Clean Water Act 
permits. Increasingly, the courts are being asked to adjudicate 
these cases, which could have broad implications for the 
Natural Gas Act.
    FERC, to its credit, does seem to be doing what it can to 
make informed and careful decisions. Just last week, FERC 
issued a key decision clarifying what is the congressional 
intent that eminent domain authority under the Natural Gas Act 
applies to state land. To be clear, states do not have a veto 
authority over rights-of-way on state lands when an interstate 
pipeline has been determined to be necessary and in the public 
interest.
    In a separate action, FERC created a new division to focus 
specifically on landowner issues and to be more responsive to 
the public, a good thing. It appears our current framework is 
working, but as we move forward, I am going to certainly 
continue to remain open-minded about what, if any, changes 
might be necessary to improve the act.
    Mr. Chairman, while I look forward to hearing from our 
witnesses today, for sure, I would be remiss not to mention 
that we have unfinished work to reauthorize the Pipeline Safety 
Act, which expired last September. As you know, PHMSA's 
authorization expired back then, and work on the 
reauthorization bill appears to have been stalled between our 
two committees. Members on this side of the aisle are eager to 
get the bill back on track to send to the Senate and then to 
the President. I would like to think that we might be able to 
get a commitment on this important bill before the day is over, 
and with that I yield back.
    [The prepared statement of Mr. Upton follows:]

                 Prepared Statement of Hon. Fred Upton

    Thank you, Mr. Chairman, for holding today's hearing to 
examine the role of natural gas in our economy and the Federal 
Energy Regulatory Commission's (FERC) responsibilities under 
the Natural Gas Act.
    Pipelines are the safest, most efficient way to move energy 
long distances, and they are vital to our nation's economy. 
Over 2.7 million miles of energy pipelines crisscross the 
nation already, and the need for safe and reliable energy 
infrastructure continues to grow.
    Natural gas is an abundant resource across the U.S., and 
new discoveries and extraction methods--thanks to hydraulic 
fracturing and directional drilling--have led to a dramatic 
rise in domestic production.
    America is now the world's leading producer of natural gas, 
and we are reaping the benefits. Our economy is stronger, the 
shale boom has created millions of jobs, we are more energy 
secure, and natural gas is helping to reduce carbon emissions 
both at home and abroad. In Michigan, we've cut our emissions 
by over 25 percent in the last decade.
    The Natural Gas Act is the principal federal law that 
regulates the sale and transportation of natural gas in 
interstate commerce. While the natural gas industry has 
undergone remarkable changes over the decades since its passage 
in 1938, the law has withstood the test of time and remains 
sound.
    Through the passage of the Natural Gas Act and its 
amendments, Congress recognized the need to establish a 
framework to encourage competition within the natural gas 
industry, protect consumers from monopoly pricing, and promote 
interstate commerce. As a result, pipelines today are subject 
to significant Federal oversight and regulations.
    Under the Natural Gas Act, FERC has jurisdiction over 
virtually all aspects of interstate pipeline operations. Before 
a pipeline is constructed, FERC must conduct a rigorous 
environmental review and issue a certificate that finds the 
pipeline ``necessary in the public interest.''
    FERC also has the obligation to ensure that consumers are 
protected and that rates charged for interstate pipeline 
services are ``just and reasonable.''
    FERC has ample authority under current law to require 
prospective changes in the rates charged by a pipeline company 
when it can be demonstrated that the rates are no longer just 
and reasonable. For example, following the passage of the Tax 
Cuts and Jobs Act, FERC required all 129 jurisdictional gas 
pipelines to make informational filings, and many operators 
ended up lowering their rates for customers.
    FERC's regulatory oversight extends beyond pipeline siting 
and rates. If a pipeline operator wants to shut down a pipeline 
facility that is uneconomic, they must seek permission and 
approval from FERC in order to protect consumers from service 
interruptions and rate increases.Despite the fact that 
pipelines are the safest, most efficient form of 
transportation, and despite the fact that natural gas is 
helping to reduceCO2 emissions across our economy, it has 
become increasingly difficult and costly to make it through the 
FERC siting process.
    Pipeline opponents are challenging projects at virtually 
every turn, using every tool to delay or block pipeline 
projects. States are getting more involved too, by delaying or 
withholding Clean Water Act permits. Increasingly, the courts 
are being asked to adjudicate these cases, which could have 
broad implications for the Natural Gas Act.
    FERC, to its credit, seems to be doing what it can to make 
informed and careful decisions. Just last week, FERC issued a 
key decision clarifying what is the Congressional intent, that 
eminent domain authority under the Natural Gas Act applies to 
state land. To be clear, States do not have ``veto'' authority 
over rights-of-way on state lands when an interstate pipeline 
has been determined to be necessary and in the public interest. 
In a separate action, FERC created a new division to focus 
specifically on landowner issues and to be more responsive to 
the public.
    It appears our current framework is working, but as we move 
forward, I will continue to remain open minded about what, if 
any, changes may be necessary to improve the Natural Gas Act.
    Mr. Chairman, while I look forward to hearing from our 
witnesses today, I would be remiss not to mention that we have 
unfinished work to do reauthorize the Pipeline Safety Act. As 
you know, PHMSA's authorization expired in October and work on 
the reauthorization bill appears to have stalled. Members on 
this side of the aisle are eager to get that bill back on track 
and send it over to the Senate. Can we get a commitment to 
return to the Pipeline Safety bill before moving on to other 
energy bills?
    With that, thank you. I yield back.

    Mr. McNerney. The gentleman yields back. The Chair now 
recognizes Mr. Pallone, chairman of the full committee, for 5 
minutes for his opening statement.

OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Chairman.
    Today's hearing is long overdue. For the first time in many 
years, the committee will take a broad look at the Natural Gas 
Act and how the Federal Energy Regulatory Commission implements 
its many provisions and not just those dealing with 
infrastructure permitting and siting. It has been too long 
since this committee explored pricing and what consumers pay 
for natural gas. Customers have little recourse to request 
refunds for many overpayments they make. Meanwhile, pipelines 
get to use certain pricing provisions in the law to thwart the 
inadequate consumer protections in other parts of the act.
    Representatives Butterfield and Long have introduced 
bipartisan legislation to help address this problem. They 
propose a simple revision to the Natural Gas Act mirroring 
their refund authority for electric consumers in the Federal 
Power Act, and I commend them for their important efforts to 
protect consumers. Of course, it is impossible to ignore the 
issue of pipelines, their placement, and their impact on 
climate change and landowners. FERC has done itself no favors 
by taking actions that have stoked the controversy surrounding 
these matters.
    Last week, Chairman Rush, Tonko, and I released the Clean 
Future Act, our climate plan to achieve a hundred percent clean 
economy. That bill makes clear that FERC should be considering 
the climate impacts of pipeline proposals, and this is 
necessary because several Commissioners still act as if FERC 
need not consider climate change as part of its public interest 
determination. They are essentially ignoring the court's 
decision in the Sabal Trail case that specifically told FERC to 
look at greenhouse gas emissions.
    FERC isn't even considering the climate in its National 
Environmental Policy Act reviews. It is alarming that FERC 
looks at all other environmental impacts of pipeline projects, 
yet refuses to take climate change seriously. The Natural Gas 
Act provisions in the Clean Future Act also highlight the need 
for a regional review of pipeline projects. FERC must take a 
more holistic view of the pipelines' infrastructure already 
serving particular regions in order to determine whether new 
infrastructure is really needed. I am concerned FERC is simply 
approving duplicative pipelines with 60-year spans under the 
guise of market need, even when those pipelines are not really 
necessary.
    The Atlantic Coast and Mountain Valley pipeline projects 
clearly illustrate the need for regional review. Both pipelines 
cross roughly the same areas in the Mid-Atlantic region and, in 
some instances, impact the same communities and landowners. 
Well, why do we need that duplication? And while work on both 
pipes has been halted, much of the land damage has already been 
done because FERC allowed these duplicative projects to be 
begin construction.
    Last week, just after we announced this hearing, FERC 
announced it was creating a new division to expedite landowner-
related pipeline appeals known as rehearings. Now that sounds 
good, but we will have to see if FERC is really getting the 
message. The fact is, FERC's process for siting and 
constructing intrastate pipelines is not working, especially 
for landowners. FERC should ensure a fair and equitable process 
for those seeking to protect their property, but the current 
process really only considers the needs of the pipeline 
companies.
    And today, we will also discuss issues surrounding the 
eminent domain. FERC recently put forward a declaratory order 
supporting the use of eminent domain to take state-owned lands 
for PennEast, a proposed pipeline between Pennsylvania and New 
Jersey. For an independent regulatory agency to help a private 
party seize state lands to build a pipeline is as wrong as it 
is bizarre, and FERC should leave the constitutional question 
on state sovereign immunity to the courts instead of pushing 
the Trump administration's fossil fuel agenda.
    And before I yield, to--I wanted to yield a minute or so to 
Mr. Butterfield, but I wanted to welcome Representative Lizzie 
Fletcher of Texas, who has tremendous knowledge of the 
industry. Thank you for joining us. And I also want to insert 
for the record a letter, Mr. Chairman, from the Industrial 
Energy Consumers of America, highlighting several critical 
issues, including pricing, reliability, and the need for 
greater scrutiny of natural gas exports to ensure they serve 
the public interest.
    [The prepared statement of Mr. Pallone follows:]

             Prepared Statement of Hon. Frank Pallone, Jr.

    Today's hearing is long overdue. For the first time in many 
years, the Committee will take a broad look at the Natural Gas 
Act and how the Federal Energy Regulatory Commission (FERC) 
implements its many provisions, not just those dealing with 
infrastructure permitting and siting.
    It has been too long since this Committee explored pricing 
and what consumers pay for natural gas. Customers have little 
recourse to request refunds for any ``overpayments'' they make. 
Meanwhile, pipelines get to use certain pricing provisions in 
the law to thwart the inadequate consumer protections in other 
parts of the Act. Representatives Butterfield and Long have 
introduced bipartisan legislation to help address this problem. 
They propose a simple revision to the Natural Gas Act mirroring 
the refund authority for electric customers in the Federal 
Power Act. I commend them for their important efforts to 
protect consumers.
    Of course, it is impossible to ignore the issue of 
pipelines, their placement, and their impact on climate change 
and landowners. FERC has done itself no favors by taking 
actions that have stoked the controversy surrounding these 
matters.
    Last week, Chairmen Rush, Tonko, and I released the CLEAN 
Future Act, our bold climate plan to achieve a 100 percent 
clean economy. That bill makes clear that FERC should be 
considering the climate impacts of pipeline proposals. This is 
necessary because several Commissioners still act as if FERC 
need not consider climate change as part of its public interest 
determination. They are essentially ignoring the court's 
decision in the Sabal Trail case that specifically told FERC to 
look at greenhouse gas emissions. FERC isn't even considering 
the climate in its National Environmental Policy Act reviews. 
It is alarming that FERC looks at all other environmental 
impacts of pipeline projects yet refuses to take climate change 
seriously.
    The Natural Gas Act provisions in the CLEAN Future Act also 
highlight the need for a regional review of pipeline projects. 
FERC must take a more holistic view of the pipeline 
infrastructure already serving particular regions in order to 
determine whether new infrastructure is truly needed. I am 
concerned FERC is simply approving duplicative pipelines, with 
60-year lifespans, under the guise of ``market need'' even when 
those pipelines are not really necessary.
    The Atlantic Coast and Mountain Valley pipeline projects 
clearly illustrate the need for regional review. Both pipelines 
cross roughly the same areas in the mid-Atlantic region and, in 
some instances, impact the same communities and landowners. Why 
do we need that duplication? And while work on both pipes has 
been halted, much of the land damage has already been done 
because FERC allowed these duplicative projects to begin 
construction.
    Last week, just after we announced this hearing, FERC 
announced it was creating a new division to expedite landowner-
related pipeline appeals, known as rehearings. Now, that sounds 
good, but we'll have to see if FERC is really getting the 
message. The fact is FERC's process for siting and constructing 
interstate pipelines is not working--especially for landowners. 
FERC should ensure a fair and equitable process for those 
seeking to protect their property, but the current process 
really only considers the needs of pipeline companies.
    Today, we will also discuss issues surrounding eminent 
domain. FERC recently put forward a declaratory order 
supporting the use of the eminent domain to take state-owned 
lands for PennEast, a proposed pipeline between Pennsylvania 
and New Jersey. For an independent regulatory agency to help a 
private party seize state lands to build, a pipeline is as 
wrong as it is bizarre. FERC should leave the constitutional 
question on state sovereign immunity to the courts instead of 
pushing the Trump Administration's fossil fuel agenda.
    Before I yield back my time, I want to welcome 
Representative Lizzie Fletcher of Texas, who has tremendous 
knowledge of the industry. Thank you for joining us this 
morning. I also want to insert for the record a letter from the 
Industrial Energy Consumers of America highlighting several 
critical issues, including pricing, reliability, and the need 
for greater scrutiny of natural gas exports to ensure they 
serve the public interest.
    Thank you.

    And I would like to yield my remaining minute to Mr. 
Butterfield.
    Mr. Butterfield. Thank you very much, Mr. Chairman. I won't 
take the full minute, but thank you for yielding time. And let 
me join with you in thanking the four witnesses for your 
testimony today.
    Mr. Chairman, I will take an extra second, if I can, to 
welcome my constituent and neighbor, Rich Worsinger. Rich is 
the director of Wilson Energy, the municipally-owned electric 
and natural gas utility in my hometown of Wilson, North 
Carolina. Rich has over 35 years of experience in the utility 
industry, nearly 20 of that has been in the eastern part of our 
state. He understands the industry and the challenges that 
utilities like Wilson Energy face in providing energy to their 
ratepayers. Rich will be a valuable voice in today's hearing, 
and I thank him so very much for coming.
    Thank you, Mr. Chairman. I yield back.
    Mr. Pallone. I yield back.
    Mr. McNerney. The gentleman yields back. The Chair now 
recognizes Mr. Walden, ranking member of the full committee, 
for 5 minutes for his opening statement.

  OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr. Walden. Good morning, Mr. Chairman, and I want to 
welcome our witnesses and our guests today, and we appreciate 
you holding this hearing. Members will get a great opportunity 
to examine the role of natural gas and the challenges and 
opportunities to upgrade and modernize our nation's natural gas 
pipeline system. Abundant and affordable domestic natural gas 
has enabled the United States to become the world's number one 
energy producer while simultaneously leading the world in 
carbon emissions reductions.
    U.S. consumers are benefiting from low and stable natural 
gas prices. Our economy is benefiting from the jobs and 
investments in new infrastructure and manufacturing, and the 
world is benefiting from a more reliable and stable trading 
partner. Over the last decade, the United States has become 
more energy secure than ever before. It wasn't long ago when we 
thought we were running out of natural gas. Today, we are 
energy independent. We are net exporters of natural gas, and 
our prices remain historically low and stable.
    Now, we didn't get here because of some government mandate 
or regulation; we owe it to technological innovation and 
American ingenuity to unlock natural gas resources that once 
were inaccessible. All 50 states are benefiting from the 
affordable, reliable resources right here in our own backyard. 
We don't have to depend on Russia or the Middle East for 
imports anymore. With energy independence, we are creating 
millions of American jobs, good-paying American jobs, and our 
economy and energy security is stronger than ever before.
    Cheap, domestic natural gas is also helping bring jobs back 
to the United States, where it is used as both a fuel and 
feedstock in manufacturing. American natural gas is also good 
for the environment. Our carbon emissions have plummeted as 
more natural gas is used to generate electricity, and our 
trading partners around the world are lowering their emissions 
by switching from dirtier sources and unstable suppliers of 
energy.
    Thanks to cleaner-burning natural gas, America is leading 
the world in carbon emission reductions, beating the 
projections of both Waxman-Markey cap and trade bill that some 
of us had to suffer through the markup on here a few years ago 
and the Paris Climate Agreement. This goes to show why 
Republicans continue to reject carbon taxes and the very 
restrictive regulations of many on the other side of the aisle, 
some of whom want to keep all this energy in the ground, quote 
unquote.
    We are focused on innovation. We are focused on market-
driven solutions because they have delivered real results for 
the American people and for our friends and allies. As the 
United States continues to emerge as the world's global energy 
superpower, we must also modernize our infrastructure, 
especially this vast network of pipelines that we rely upon to 
move energy safely from where it is produced to where it is 
consumed, and we have a lot of work to do.
    Due to pipeline bottlenecks, they recently had to import 
Russian LNG into Boston Harbor--amazing. Pipelines are simply 
the safest, most efficient way to move energy. Congress 
recognized this fact back in 1938 with the passage of the 
Natural Gas Act. And while the industry has undergone 
tremendous change, this statute continues to guide our policy 
today. Natural gas pipelines are highly regulated, as they 
should be. Federal Energy Regulatory Commission reviews 
pipelines to ensure they are necessary in the public interest.
    FERC also reviews pipeline rates to ensure they are just 
and reasonable. Pipeline developers are required to complete a 
rigorous permitting process, sometimes lasting several years, 
with multiple federal and state agencies, as we will hear from 
our witnesses today. The pipeline permitting process has become 
increasingly complex and very challenging, not to mention 
expensive. FERC and gas pipeline companies have been taken to 
court by some landowners and environmental groups over property 
rights in the scope of environmental reviews. States like New 
York and New Jersey are attempting to delay or block pipelines 
by withholding federal permits and challenging the use of 
eminent domain. Ironically and unfortunately, without access to 
natural gas, some of these states continue to use heating oil, 
which is more expensive for consumers and produces more 
greenhouse gas emissions.
    Through these challenges, FERC has done a good job of 
carrying out its responsibilities under the Natural Gas Act. 
The record has shown FERC to be focused on protecting 
interstate commerce and fair competition. FERC has also done a 
good job of balancing the public interest with private property 
rights, and the announcement of a new division to respond to 
landowner requests is a testament to their commitment, and I 
applaud that.
    I plan to use today's hearing to explore these issues 
through the lens of the consumer and ask some important 
questions, what is necessary to continue to maximize the 
benefits of natural gas pipelines for the consumer, for the 
American economy, and for the security of our nation?
    And, Mr. Chairman, as you know, we have another 
subcommittee meeting convening downstairs, and then we have the 
corona virus all-member briefing over in the Capitol at 11 
o'clock, so I know some of us will be going to all three of 
those things. So, I state that at the head end, and I return 
nine seconds.
    [The prepared statement of Mr. Walden follows:]

                 Prepared Statement of Hon. Greg Walden

    Thank you, Mr. Chairman, for holding today's hearing to 
provide Members with an opportunity to examine the role of 
natural gas and the challenges and opportunities to upgrade and 
modernize our nation's natural gas pipeline system.
    Abundant and affordable domestic natural gas has enabled 
the United States to become the world's number one energy 
producer while simultaneously leading the world in carbon 
emissions reductions. U.S. consumers are benefiting from low 
and stable natural gas prices. Our economy is benefitting from 
the jobs and investments in new infrastructure and 
manufacturing, and the world is benefitting from a more 
reliable and stable trading partner.
    Over the last decade; the U.S. has become more energy 
secure than ever before. It wasn't long ago when we thought we 
were running out of natural gas. Today, we are energy 
independent we are net exporters of natural gas--and our prices 
remain historically low and stable.
    We didn't get here because of government mandates or 
regulations; we owe it to technological innovation and American 
ingenuity for unlocking natural gas resources that were once 
inaccessible.
    All 50 states are benefitting from the affordable, reliable 
resources right here in our own backyard. We don't have to 
depend on Russia or the Middle East for imports anymore. With 
energy independence, we are creating millions of American jobs, 
and our economy and energy security is stronger than ever 
before. Cheap, domestic natural gas is also helping to bring 
jobs back to the United States, where it is used as both a fuel 
and feedstock in manufacturing.
    American natural gas is also good for the environment. Our 
carbon emissions have plummeted as more natural gas is used to 
generate electricity, and our trading partners around the world 
are lowering their emissions by switching away from dirtier 
sources and unstable suppliers of energy.
    Thanks to cleaner-burning natural gas, America is leading 
the world in carbon emissions reductions--beating the 
projections of both the Waxman-Markey cap and trade bill and 
the Paris Climate agreement. This goes to show why Republicans 
continue to reject carbon taxes and more regulations. We are 
focused on innovation and market-driven solutions that have 
delivered real results.
    As the United States continues to emerge as the world's 
global energy superpower, we must also modernize our 
infrastructure--especially the vast network of pipelines that 
we rely on to move energy from where it is produced to where it 
is consumed. We have a lot of work to do due to pipeline 
bottlenecks; we recently had to import Russian LNG into Boston 
Harbor.
    Pipelines are simply the safest, most efficient way to move 
energy. Congress recognized this fact back in 1938 with the 
passage of the Natural Gas Act, and while the industry has 
undergone tremendous change, this statute continues to guide 
our policy today.
    Natural gas pipelines are highly regulated. The Federal 
Energy Regulatory Commission (FERC) reviews pipelines to ensure 
they are``necessary in the public interest.'' FERC also reviews 
pipeline rates to ensure they are ``just and reasonable.''
    Pipeline developers are required to complete a rigorous 
permitting process, sometimes lasting several years, with 
multiple Federal and State agencies. As we will hear from our 
witnesses today, the pipeline permitting process has become 
increasingly complex and challenging.
    FERC and gas pipeline companies have been taken to court by 
some landowners and environmental groups over property rights 
and the scope of environmental reviews. States like New York 
and New Jersey are attempting to delay or block pipelines by 
withholding Federal permits and challenging the use of eminent 
domain. Ironically and unfortunately, without access to natural 
gas, some of these states continue to use heating oil which is 
more expensive for consumers and produces more greenhouse gas 
emissions.
    Through these challenges, FERC has done a good job carrying 
out its responsibilities under the Natural Gas Act. The record 
has shown FERC to be focused on protecting interstate commerce 
and fair competition. FERC has also done a good job balancing 
the public interest with private property rights and; the 
announcement of a new division to respond to landowner requests 
is a testament to their commitment.
    I plan to use today's hearing to explore these issues 
through the lens of the consumer and ask the important 
questions. What is necessary to continue to maximize the 
benefits of natural gas pipelines for the consumer, for the 
American economy, and for the security of our nation?
    With that, I look forward to hearing from the witnesses, 
and I yield back the balance of my time.

    Mr. McNerney. I thank the ranking member of the full 
committee for his comments. The Chair would like to remind 
Members that pursuant to committee rules, all Members' opening 
statements shall be made part of the record.
    I would now like to welcome our first panel of witnesses 
for today's hearing. The Honorable Cheryl LaFleur, former chair 
of the Federal Energy Regulatory Commission; Mr. Mike McMahon, 
Senior Vice President, General Counsel, and Secretary, 
Boardwalk Pipelines, LP, who is testifying on behalf of the 
Interstate Natural Gas Association of America. Thank you.
    Richard Worsinger, Treasurer, Board of Directors, American 
Public Gas Association; and Dr. Susan Tierney, Senior Advisor 
of the Analysis Group, Inc. Thank you to the witnesses for 
joining us today. We look forward to your testimony. Before we 
begin, I would like to explain the lighting system. In front of 
you is a series of lights. The light will initially be green at 
the start of your opening statement. The light will turn yellow 
when you have 1-minute remaining. Please begin to wrap your 
testimony at that time. The light will turn red when your time 
has expired.
    Ms. LaFleur, you are now recognized for 5 minutes.

STATEMENTS OF CHERYL LaFLEUR, CHAIRMAN (FORMER), FEDERAL ENERGY 
    REGULATORY COMMISSION; MICHAEL E. MCMAHON, SENIOR VICE 
PRESIDENT, GENERAL COUNSEL, AND SECRETARY, BOARDWALK PIPELINES, 
LP; RICHARD WORSINGER, TREASURER, BOARD OF DIRECTORS, AMERICAN 
  PUBLIC GAS ASSOCIATION; AND, SUSAN TIERNEY, SENIOR ADVISOR, 
                      ANALYSIS GROUP, INC.

                  STATEMENT OF CHERYL LaFLEUR

    Ms. LaFleur. Thank you very much, Chairman McNerney, 
Ranking Members Walden and Upton, and members of the committee. 
I am Cheryl LaFleur. I am honored to appear before you today. 
From 2010 through 2019, I was a Commissioner and, at times, 
chairman of the Federal Energy Regulatory Commission, but I am 
here today as a private citizen. I am going to focus on two 
aspects of the Natural Gas Act: Section 7 that grants the 
authority to build pipelines, and Section 5, petitions for rate 
reduction.
    When the Natural Gas Act was passed in 1938, and for 
decades after that, the nation's supply of natural gas was 
thought to be confined to geographically-constrained regions in 
the Southwest and the Gulf of Mexico, mostly. The purpose of 
the act, as demonstrated in its language and legislative 
history was to make sure that limited gas got shared with other 
regions of the country that needed the gas. FERC, over time, 
established a practice of using market signals to decide 
whether there was need for a pipeline. If the proposed pipeline 
had contracts to sell the gas to people who would buy the gas, 
in essence, the need for the pipeline was presumed, and the 
Commission worked on other aspects of the application. That 
system seemed to work pretty well, or at least with much less 
controversy than today for a very long time.
    In recent years, however, as the committee knows, the gas 
supply situation has changed dramatically. New extraction 
technology has allowed gas to be extracted from vast shale 
plays spanning multiple states in the Southwest, Midwest, and 
Mid-Atlantic regions. This far greater availability has made 
gas cheaper, a fuel for electric generation, and increasingly 
an export commodity.
    With these changes, FERC's pipeline regime developed in a 
different era has come under public attack and has been heavily 
debated at the Commission itself. One key issue is how the 
Commission determines need. I have believed for some time that 
given the much greater availability of gas and the result and 
potential for overbuilding pipelines, FERC should no longer 
rely simply on the existence of contracts. Instead, FERC should 
build a factual record on the need for the gas, the proposed 
end uses, and the regional need, and look at multiple pipelines 
if they are in the same region, and that would allow FERC to 
balance the benefits and costs better.
    Another controversial issue is how FERC considers the 
climate impacts of pipelines. Now gas has a complicated 
relationship with climate. It is an improvement over coal, 
heating oil, and it helps work with renewables, but on the 
other hand, it has its own greenhouse gases and methane 
emissions. In 2017, the DC Circuit Court of Appeals ruled that 
FERC was required to consider downstream greenhouse gas 
emissions of pipelines. How to apply that case has been the 
subject of considerable disagreement among the Commissioners.
    In April 2018, FERC issued a notice of inquiry to take a 
comprehensive look at the pipeline process, including need, how 
to do environmental review, and other issues. They haven't done 
anything on that since, and I believe although FERC is very 
busy, it is time for FERC to return to that notice of inquiry 
and look at those issues because a new process that was 
developed in hopefully a bipartisan manner at the Commission 
would be fairer and more efficient than one that is dictated by 
court order successively that is done piece by piece.
    Secondly, on Section 5 reform under the National Gas Act, 
if a pipeline wants to increase rates, it files a Section 4 
case at FERC, and FERC sets a refund date, usually 5 months 
later. And once all the trial has happened and they decide what 
the rate is, the customers pay that new rate, usually higher, 
as of the refund date. But if a customer or FERC wants to 
reduce rates, FERC doesn't have the power under Section 5 of 
the act to set a refund date, so rates aren't changed until the 
entire end of the case, which can be years later after 
discovery and trial and then the new rate goes into effect. 
Because no refund date is set, pipelines have an incentive, a 
natural commercial incentive, to make the litigation last as 
long as they can, to not settle the case, to avoid cutting 
rates, and to discourage people from being Section 5 cases.
     This was highlighted when you all passed the Tax Cuts and 
Jobs Act in 2017. The committee was able to take relatively 
prompt action to make sure that electric companies gave back 
the tax savings to their customers, but on the gas side, it was 
much harder and slower, and in some cases unsuccessful, to have 
the pipelines give back the tax cuts to their customers. So I 
have long believed that Congress should amend Section 5 of the 
Natural Gas Act to allow FERC to set a refund date.
    Thank you, and I look forward to your questions.
    [The prepared statement of Ms. LaFleur follows:]

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    Mr. McNerney. I thank the witness.
    Mr. McMahon, you are now recognized for 5 minutes. McMahon, 
excuse me.

                  STATEMENT OF MICHAEL McMAHON

    Mr. McMahon. Good morning, Chairman and ranking members and 
members of the committee. I am Mike McMahon of Boardwalk 
Pipelines, and I am testifying on behalf of the Interstate 
Natural Gas Pipeline Association. I appreciate the opportunity 
to speak today and look forward to answering any questions you 
may have. My remarks will focus on three key elements. First, 
the Natural Gas Act is working. Second, modifications to 
Section 5 of the Natural Gas Act lead to a natural question, 
why now? Third, predictability and stability that the Natural 
Gas Act affords are critical in keeping costs low to consumers.
    The Natural Gas Act has been a catalyst for significant 
pipeline infrastructure buildout that has occurred across the 
United States over the last 15 years. The infrastructure 
development has benefited the economy by significantly 
decreasing the cost of natural gas paid by consumers; spurring 
industrial manufacturing growth; bringing back a significant 
number of jobs to the country; providing an alternative source 
of fuel for the generation of electricity; reducing greenhouse 
emissions. This infrastructure has provided the reliability and 
flexibility necessary to partner and support increasing levels 
of electricity generated from renewables. All this has occurred 
under the current framework provided by the Natural Gas Act.
    With respect to modification of Section 5 of the Natural 
Gas Act, FERC is actively utilizing its statutory authority to 
review pipeline rates. As a result of the Tax Cuts and Jobs 
Act, FERC recently required all jurisdictional pipelines to 
file a cost and revenue study similar to those used by the 
Commission when they are conducting a Section 5 investigation. 
In more than 60 percent of those cases, FERC found there was no 
further need to review the pipelines' rates. In approximately 
30 percent of those cases, pipelines either volunteered to 
reduce their rates, initiated their own Section 4 rate case, or 
filed settlements with their customer.
    FERC initiated Section 5 proceedings against six pipelines 
as a result of the exercise. The average unadjusted return on 
equity for those pipelines that elected not to modify their 
rates in which the Commission found that there was no further 
review needed was, on average 6.5 percent. This process is not 
the only time that FERC has reviewed pipeline rates. Since 
2009, the Commission has brought twenty-five Section 5 cases 
against natural gas pipelines. All but two of those cases have 
been settled or dismissed within a 6-month window, indicating 
the desire by all parties to resolve Section 5 cases in an 
exponential manner.
    Finally, since 2005, our industry has spent over 110 
billion dollars in new infrastructure, which has brought low-
cost natural gas to consumers and energy security to the United 
States. That investment has been made possible through the 
capital attainment in the financial markets and is based 
largely on the predictability and stability that the Natural 
Gas Act affords. Modifications to the act that change the 
predictability and stability increase costs to pipeline 
operators, and ultimately ends up in higher rates to consumers.
    Looking forward, natural gas is a vital part of how we meet 
the country's climate goals. Congress should avoid upsetting 
the current balance between consumers' and investors' interests 
provided by the Natural Gas Act's longstanding rate-making 
principles that continue to work in today's competitive market. 
I thank you, and I look forward to the opportunity to answer 
any of your questions.
    [The prepared statement of Mr. McMahon follows:]
    Mr. McNerney. Thank you.
    Mr. Worsinger, you are now recognized for 5 minutes.

                 STATEMENT OF RICHARD WORSINGER

    Mr. Worsinger. Thank you. Mr. Chairman, Ranking Member 
Upton, and members of the subcommittee, I appreciate this 
opportunity to testify before you today on behalf of the City 
of Wilson, North Carolina, and the American Public Gas 
Association. My name is Rich Worsinger, and I am the director 
of the municipal utility in the city of Wilson that goes by the 
name of Wilson Energy. Our not-for-profit distribution utility 
serves some 35,000 electric customers and 15,000 gas customers. 
We are focused on providing safe and affordable services to our 
customers.
    APGA is the national association for the nearly 1,000 
publicly-owned, not-for-profit natural gas distribution 
systems, ultimately representing the interests of natural gas 
consumers. We, therefore, commend the subcommittee for its 
focus on providing the Federal Energy Regulatory Commission, or 
FERC, with the tools they need to protect consumers from 
monopoly pipelines.
    There exists an unnecessary disparity between the Federal 
Power Act and the Natural Gas Act, which have many parallel 
provisions to accomplish the same goal, just and reasonable 
rates for energy transmission. Under the Federal Power Act, if 
a rate complaint is filed and FERC later rules that the rates 
paid by the customers are unjust and unreasonable, FERC has the 
authority to make a just and reasonable rate effective too when 
the complaint case began. That means customers receive refunds, 
including interest, of the overcharges. This is not only fair 
but tempers the tendency of the transmission provider to 
overcharge in the first place.
    FERC does not have the same authority under the Natural Gas 
Act. A finding that rates are too high and must be lowered can 
be made effective only after that determination, prospectively. 
There is no good reason to treat these energy consumers 
differently. This inequity exists because Congress amended 
Section 206 of the Federal Power Act in 1988 to provide FERC 
with refund authority in electricity rate complaint cases. 
Congress did not pursue a mirrored change to Section 5 of the 
Natural Gas Act in large part because gas pipelines then were 
required to have their pipeline rates reviewed every three 
years. But that requirement ended in 1992, and a subsequent fix 
to the Natural Gas Act has never passed.
    Lack of refund authority has caused billions of dollars in 
overcharges to natural gas consumers in all these years. These 
are dollars that could have gone into local businesses in a 
community, or into paying food bills and mortgages or into 
investing in a child's education. Instead, they have flowed 
upstream to the pipelines' coffers. Perhaps the best example 
has been the Tax Cuts and Jobs Act of 2017, that lowered the 
federal tax rate dramatically on corporations, including 
regulated natural gas pipelines.
    When the tax rate took effect January 1, 2018, pipeline 
costs went down instantly. Did consumers of interstate 
pipelines get lower rates at that time? No. FERC identified 
many pipelines that had excessive earnings, yet it took over a 
year for consumers to get fair rates because the Natural Gas 
Act Section 5 does not mirror the Federal Power Act Section 
206.
    The issue is particularly important to public gas systems 
because about 95 percent of them, including my system, are 
served by just one pipeline. We must rely on FERC to determine 
that our monopoly pipeline is not overcharging us, but the 
current system allows pipelines to keep overcharges rather than 
refunding them to ratepayers. Of course, we support sensible 
new gas transmission pipeline infrastructure. This change will 
not affect the ability of pipelines to source capital to 
expand. All the FERC Commissioners that have supported this 
modernization certainly did not see such an impact. There are 
no valid reasons for this statutory inequity to continue.
    I thank you for this opportunity to testify and look 
forward to working with the subcommittee to provide this 
critical consumer safeguard, and both the city of Wilson and 
the American Public Gas Association fully support H. R. 5178. 
Thank you.
     [The prepared statement of Mr. Worsinger follows:]

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    Mr. McNerney. Thank you.
    Dr. Tierney, you are now recognized for 5 minutes.

                   STATEMENT OF SUSAN TIERNEY

    Ms. Tierney. Thank you, Mr. Chairman, Ranking Member, and 
members of the subcommittee. My name is Susan Tierney from 
Analysis Group in Denver, and I am a former utility and 
environmental regulator.
    Much has changed in the decade since the Natural Gas Act 
was enacted. Americans now wholeheartedly enjoy the benefits of 
low-cost natural gas, and FERC's approvals of pipelines have 
supported that outcome. Even so, the nation's energy systems 
are in transition. For example, with one exception, every 
member of this subcommittee comes from a state with a goal to 
reduce greenhouse gas emissions or rely on zero carbon supply 
or renewable energy, and yet FERC continues to approve 
pipelines affecting states that anticipate much lower use of 
gas in the future.
    Over the past two decades, FERC has approved 487 pipelines 
and has rejected two. These projects total an amount of 
capacity that is nearly double the all-time peak day for gas 
use in the United States. Over one-third of the approved 
pipelines have occurred in the last three years alone. My 
testimony reflects my review of hundreds of comments that were 
filed in response to FERC's notice of inquiry about the changes 
FERC should make in its 1999 policy statement.
    Stakeholders are clearly sharply divided about the views 
for need for change. Oil companies, gas companies, trade 
associations, business groups, labor unions, politicians from 
gas-producing states all argue that things are working fine. 
Others, including states' attorneys general, state regulators, 
politicians from states affected by pipeline projects and 
concerned about carbon emissions, other academics, 
environmental organizations, libertarian think tanks, and 
individual citizens, think FERC should change how it reviews 
its projects.
    Notably, the U.S. Supreme Court has found that the 
principal purpose of the Natural Gas Act is not to promote 
natural gas development at any cost or in any way, but rather 
to do so to encourage the orderly and reasonable development of 
the natural gas system. The NGA directs FERC to approve gas 
projects only if they are required for the public convenience 
and necessity. FERC's approach needs to be updated to reflect 
current conditions and to ensure that the agency carries out 
its duties in a way that credibly satisfies the public interest 
purpose of the NGA.
    A key element of building confidence in FERC's review would 
be for FERC to change its near-exclusive reliance on precedent 
agreements as the basis for determining whether new projects 
are needed. When FERC reviews a pipeline application, the 
agency looks to see if the applicant has an agreement with 
someone who wants to purchase capacity on that pipeline. FERC 
treats such agreements as decisive in determining that a 
pipeline is needed. But such agreements reflect the private 
interest of two parties, and a precedent agreement alone cannot 
universally demonstrate that a pipeline project is needed to 
meet the public convenience and necessity.
    FERC's current approach undervalues the many other factors, 
such as demand forecasts, availability of capacity in regional 
pipelines, impacts on landowners, and so forth, that are 
relevant when reviewing whether an approval of a particular 
pipeline serves the public interest. FERC's reviews should 
compare the anticipated benefits of a project against its 
anticipated economic and environmental costs. These are real 
costs with gas pipelines that are not reflected in the prices 
paid by parties who use and benefit from the project.
    As an economic regulator, FERC should use a more fulsome 
need analysis that relies on a more fulsome and systematic 
benefit-cost framework. FERC's overreliance on precedent 
agreements is especially problematic in cases where pipeline 
developers use eminent domain to take land for their projects. 
Taking land cannot be for the purpose of serving private 
interests. FERC should give great weight to the interests of 
landowners, and FERC should give great weight to the views of 
states that especially will be impacted in one way or another 
by the pipelines that go through them.
    Finally, FERC should consider both the direct and indirect 
environmental impacts associated with the gas that is 
transported across the pipelines. Other agencies that review 
bridges look at the impacts of vehicles on the bridges; FERC 
should do the same for its pipelines as well and review the 
impacts of gas. Finally, FERC should quantify and monetize 
greenhouse gas emissions impacts wherever reasonably feasible 
to do so. Emissions introduce greenhouse gas, and serious 
climate impacts on public health, infrastructure, and economic 
activity. Thank you very much.
    [The prepared statement of Ms. Tierney follows:]

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    Mr. McNerney. We have now concluded the opening remarks. We 
will move to member questions. Each Member will have 5 minutes 
to ask questions of our witnesses. I start by recognizing 
myself for 5 minutes.
    Commissioner LaFleur, you were an early proponent of 
Section 5 refund reform, writing back in 2010 a concurrence 
that you support legislation action to append the Natural Gas 
Act to align it with the Federal Power Act. Could you talk a 
little bit more about your experience with the Tax Cuts and 
Jobs Act and the difference between FERC providing refunds 
under the Federal Power Act versus a process under the Natural 
Gas Act?
    Ms. LaFleur. Yes, thank you, Mr. Congressman.
    When the tax cut was passed, FERC looked at the electric 
companies, the transmission companies that are covered by the 
Federal Power Act, and they all either had formula rates where 
the tax rates immediately or the next time they did, their 
formula automatically went down to customers, or if they had 
stated rates, FERC promptly filed Section 206s to require them 
to recomputed their stated rates for the lower taxes.
    With the pipeline companies, it is extremely a long, slow 
process to file a 205. FERC did not have the resources to file 
a Section 205 against the several hundred pipelines it 
regulates. And also, so FERC came up with a process where we 
made up a new form, Section 501, that required the pipelines to 
report in what their revenues would be with the new tax law in 
effect, and staff took several months to go through all of 
those forms and figure out which ones were most overearning, 
and then as to those had to start Section 205.
    So, because of all that, it took actually more than a year, 
sometime before the 30 percent that actually reduced their 
rates, reduced their rates, and had there been the refund 
authority, I think FERC could have much more promptly delivered 
those savings to customers.
    Mr. McNerney. Thank you.
    Ms. Tierney or Dr. Tierney, you note in your testimony that 
FERC could rely on a cost-benefit analysis to determine project 
need. You also note that doing so would better align FERC with 
responsibilities under the Natural Gas Act. Could you explain 
the basic framework behind this analysis and how it would be 
well-suited?
    Ms. Tierney. Sure. Under the Natural Gas Act, again, which 
has a public interest test, FERC today only relies on precedent 
agreements. FERC could identify the review of the opportunities 
and benefits associated with providing natural gas into a 
market. This is the kind of review that FERC and states do 
routinely when they are looking at new facilities.
    Additionally, FERC could look at the dollar costs 
associated with infrastructure investment, other impacts in the 
areas that are going to be served by the pipeline, as well as 
the environmental impacts. And balancing both those 
environmental impacts and economic benefits and costs would be 
a great improvement over today.
     Mr. McNerney. So, how exactly does the precedent agreement 
rule work? It is not a rule, but how does that work these days?
    Ms. Tierney. A precedent agreement is an indication that a 
customer has an intention to purchase gas service, gas 
transportation service on a pipeline. The pipeline relies upon 
that as part of its application to FERC for a certificate of 
public convenience and necessity, which is an approval of the 
pipeline.
    If FERC--although FERC has in its 1999 policy statement 
said that it would rely on a lot of relevant factors, gas 
demand, other pipeline capacity, and so forth, if there is a 
precedent agreement in place, FERC, in effect, checks the box 
that the project is needed. And there are instances where there 
are affiliated companies who are both the buyer and the seller 
of gas who are putting those precedent agreements in place, and 
they are particularly instances, where FERC should be doing a 
more fulsome review of the project's public interest benefits 
and cost.
    Mr. McNerney. Thank you. And again, Commissioner LaFleur, 
can you speak to the importance of jointly considering the 
impacts of multiple proposed pipelines for the same region?
     Ms. LaFleur. Yes. And I think a good example of this is 
the Atlantic Coast and Mountain Valley pipelines which are both 
going through very, very similar routes with a similar start 
point across West Virginia and North Carolina. I think there is 
a concern that if pipelines are considered seriatim, just 
looking at whether someone has, including as Dr. Tierney said, 
an affiliate, someone has signed up to buy the gas, you could 
result in the situation where two pipelines, in these cases 
very large pipelines, are sited right near each other. But they 
both, if you look at them in a vacuum, look like they are 
needed, but when you look collectively at how much gas the 
state of North Carolina or wherever is going to need, you can 
see that they could have much more readily been combined into 
one pipeline.
    Under the National Environmental Policy Act, you are 
supposed to look at alternatives, and I think FERC should look 
more holistically on whether there are better alternatives than 
building every single pipeline that comes along.
    Mr. McNerney. Thank you. The Chair's time has expired. The 
Chair now recognizes the ranking member of the subcommittee for 
his 5 minutes.
    Mr. Upton. Thank you again, Mr. Chairman.
    So, Mr. Worsinger and Mr. McMahon, a question for you. So, 
what percentage of a consumer's bill is the transmission charge 
in the pipeline, of the pipeline cost versus the rest of the 
rate that they may pay usually on a monthly basis? It is a 
transmission charge to actually transfer that energy on the 
pipeline; is that right?
    Mr. McMahon. In my testimony, Congressman, I put a chart in 
there that said EIA estimated it at 12 percent in this current 
low-price environment.
    Mr. Upton. So, is that about the right standard in North 
Carolina? Is that about what it is?
    Mr. Worsinger. Well, first, you are asking me to estimate 
something I don't have exact facts for, but I would suggest it 
is more than 12 percent, maybe closer to 25 percent, but it 
certainly is significant.
    Mr. Upton. Yes, because I just know for, you know, we have 
a lot of natural gas in Michigan, and I know that when the tax 
cut bill passed a few years ago, at least in Michigan, it was 
almost, I mean, within a couple of months, I mean there was a 
reduction to consumers across the board that went through the 
state regulatory commission approval. And, I didn't ask them, 
you know, the timing or the percentage in advance of the 
hearing.
    Mr. McMahon, how does FERC establish the pipeline rates to 
make sure that they are ``just and reasonable,'' the term there 
all of us have used, as the natural gas requires?
    Mr. McMahon. When a pipeline files a rate case, it presents 
all of its costs, so you are going to have the cost to operate 
and maintain are part of the cost, the cost to kind of do the 
back office. You know, currently, there are costs for cyber, so 
all the costs, including your taxes, property taxes, all that 
are added up. And then what happens is then you look at your 
throughput, and then you basically divide your cost over 
throughput, and as a result of that, you get a per-unit rate.
    So let's say you have a thousand dollars and a hundred 
units; you would have a ten-dollar rate, so that is the rate 
that would be established assuming that there is one maximum 
applicable rate, and that would be the rate you could charge. 
So you have your cost, your return, and all that, then divide 
it by throughput equals the rate. That is kind of a simple way 
of thinking about it.
    Mr. Upton. And there is a public process, is that right, 
where----
    Mr. McMahon. Yes.
    Mr. Upton [continue]. Consumers can weigh in?
    Mr. McMahon. Yes. When a pipeline files its rate case, it 
gives notice to all of its customers, so all of the customers 
have the ability to participate in that proceeding. You have in 
certain regions of the country, you have the state utility 
commissions participating or state advocates participating, and 
then you have FERC staff who participates in the litigating 
proceeding and more and more as a consumer protection agency-
type of advocate.
    Mr. Upton. Now I know that, you know, if we look, really, 
after the last 15 years, 20 years,' fracking, et cetera, we 
have got the abundance, you know, we now can export it, which 
we couldn't do it before. We have sped up that process through 
bipartisan legislation that President Obama signed into law. 
And I know as it relates to Michigan, we, and I think you cited 
this, I still say ``Commissioner'' on the floor.
    Ms. LaFleur. That is OK.
    Mr. Upton. You know, we have a renewable percentage that we 
are going to exceed, and it is going to continue to get better, 
which is good. We are phasing out coal in Michigan, and natural 
gas is coming in big time. In fact, I worked on some permitting 
processes that will allow any new company in one of my small 
towns, eight traffic lights, and a $1.1 billion new facility 
that will be online in about a year. It is incredible 600 
people working to put this up. Obviously, it is going to be 
cleaner. It is going to be replacing coal. Sadly, we have a 
nuclear plant that is closing down, but it will, you know, 
pitch in for that to agree.
    But, where I am getting to is a number of companies in 
communities because that are seeing, you know, it is supply and 
demand, there is more, supply/demand is still growing, but the 
costs are coming down, so a number of utilities are now asking 
consumers to actually lock in at a rate that is lower per term 
than it has been over the last couple of years. And again, that 
is, they are working through the public service commissions--
that is what they call it in Michigan.
    So, it seems as though the process is working, and the 
costs are significantly less, whether it be farmers or others--
I guess I am finishing with a statement instead of a question. 
It is my time, and we have a new chairman who is being rough on 
me, so anyway, I yield back.
    Mr. Peters [presiding]. Thank you, Mr. Upton. I will ask a 
question.
    Mr. Upton. Yes.
    Mr. Peters. But, first, I want to say I think it would be 
hard to argue that the proliferation of natural gas displacing 
coal hasn't been good from an environmental perspective if for 
no other reason than getting rid of the metals that are 
polluting the atmosphere. And I do think that you know, people 
claim credit for as a result of that for lower carbon 
emissions, but what we don't talk about is methane. And 
actually, one of the most damaging climate change agents are 
the short-lived climate pollutants, including methane.
    So, I want to ask Ms. LaFleur and Dr. Tierney is whether 
you believe that under the Natural Gas Act, considering the 
ruling in 2017, is it within the jurisdiction of FERC to 
regulate methane as a condition of permit approval?
    Ms. LaFleur. FERC--thank you for the question. FERC has the 
authority to consider methane and, in fact, the methane leaks--
I know that is not a word everyone likes. But the methane 
emissions from pipelines are considered a direct environmental 
effect to the pipeline, and they are carefully toted up on the 
environmental impact statement.
    So that is not the part that is in dispute, which is the 
greenhouse gases at the end. FERC doesn't, however--and FERC 
can place conditions on the construction----
    Mr. Peters. Right.
    Ms. LaFleur [continue]. To make sure that the construction 
limits methane emissions, but long-term safety regulations 
under the jurisdiction under PHMSA, the Pipeline, and Hazardous 
Materials Safety Administration, so FERC doesn't regulate 
methane once the pipeline goes into service.
    Mr. Peters. Dr. Tierney?
    Ms. Tierney. I am not a lawyer, so I am just going to 
respectfully refrain from making a legal opinion about what 
FERC is authorized to do.
    Mr. Peters. OK.
    Ms. Tierney. But I could observe that when other federal 
agencies, such as the Department of Transportation, are looking 
at the environmental impacts of using a road or a bridge, they 
use the emissions associated with vehicles going across that 
bridge. You could imagine that FERC could use a similar 
approach when it is looking at the indirect emissions 
associated with the gas that is transported.
    Mr. Peters. Right.
    Ms. Tierney. There are methane emissions associated with 
producing gas and consuming gas, and those ought to be taken 
into consideration.
    Mr. Peters. There are methane emissions at production, at 
transmission, and at--or delivery, I suppose.
    Ms. Tierney. Yes.
    Mr. Peters. So, I suppose that is true. But what I am 
trying to get at here is, you know, whether you can, it seems 
clear that you can consider the impacts of methane as you 
discuss a pipeline, but you don't have the authority to say, 
listen, as a condition of this approval, we want you to use 
better equipment, better pumps to--and we want you to monitor 
methane, is my impression.
    Commissioner, is that what you believe?
    Ms. LaFleur. I believe FERC--not we, but FERC has the 
authority to set rules on the construction of methane, and I 
guess FERC could say----
    Mr. Peters. Construction of pipeline.
    Ms. LaFleur [continue]. This pipeline is not in the 
construction of the pipeline, and how much methane they 
released and FERC could say, we don't find this in the public 
interest because you don't have enough methane control. Come 
back with a better plan.
    Mr. Peters. OK.
    Ms. LaFleur. But FERC can't directly regulate the operation 
once it----
    Mr. Peters. This is the thing that concerns me. It strikes 
me we are asking FERC to do macro regulation, macro policy at a 
micro level, and pipeline by pipeline. But to me, and I think 
that is the most important thing if we are going to, if you 
want to make any deal with natural gas as a bridge fuel, a so-
called bridge fuel, we have to deal with methane.
    And so maybe, Mr. McMahon, I would leave it to you, what do 
you think the industry can do to make sure that we are not 
emitting methane, and how do you think it should be monitored, 
and how do you think it should be controlled?
    Mr. McMahon. Well, the industry is fully committed to 
reducing methane emissions, and one of the things that we have 
undertaken over the last several years is reviewing of all of 
our operations. You know, what equipment do we have, especially 
in compressor stations, that can be updated or modernized; 
where are the potentials for leaks, enhancing our testing and 
using different technologies to test for leaks?
    The other things almost every pipeline I am aware of is 
very much concerned about is what is called loss and not 
accounted for, that gas which just you can't find and where 
that is coming at----
    Mr. Peters. I only have 30 seconds.
    Mr. McMahon. OK.
    Mr. Peters. Let me just say the price of natural gas is 
cheap. That is why it doesn't regulate itself. I mean, I just 
don't believe this notion that lost gas is a huge loss to the 
industry. It is not like gold.
    So here is my suggestion. If the industry is serious about 
it, we would love your help with the Super Pollutants Act, 
which would impose monitoring and emission regulations on new 
sources and existing methane sources. We would love to work 
with you on that because I think to me that is the base problem 
I have with natural gas right now.
    And my time has expired. I now recognize the gentleman from 
Ohio, Mr. Latta.
    Mr. Latta. Well, thank you, Mr. Chairman, and thanks for 
holding today's very important hearing. And also, thanks to our 
witnesses for being with us today.
    By 2040, global energy demand is expected to grow by 28 
percent. The market in India alone is valued at $2.7 trillion 
by 2040. If the United States is to play a role in meeting 
future global energy demand, our nation must develop 
increasingly advanced technologies that will out compete our 
rival nations. A homegrown U.S. advance to the energy economy 
will shape and even lead such a market, furthering our energy 
security, geopolitical influence, and economic opportunities 
abroad.
    I recognized the importance of these opportunities when I 
introduced House Res.597, which calls the United States to 
support and not limit access to all domestic energy resources 
in an effort to achieve full energy security. As we build out 
our technologies, significant new infrastructure will be needed 
to meet the challenges like new gas pipelines, CO2 pipelines, 
and also high-voltage pipelines.
    If I could start, Mr. McMahon, with you. In your testimony, 
you speak about the substantial benefits that have resulted 
from the growth in natural gas development and the wider energy 
renaissance in our country. Would you go into more detail about 
what you have seen and how companies have reinvested in their 
communities as a result of the growth?
    Mr. McMahon. Yes. In one of the areas that operate along 
the Gulf Coast, you see a true resurgence in the manufacturing 
process and where natural gas is being used as a feedstock, you 
know, big companies associate there, the job growth that has 
occurred in those areas. I know that in recent areas in the 
Marcellus and Utica areas, which are, you know, in your home 
state as well, you are seeing people moving projects and 
industries that typically are found on the Gulf Coast in to 
take advantage of those resources.
    So what we have seen is a resurgence of the manufacturing 
chemical that used to be done offshore because people would be 
using crude oil to crack, to make those products are now using 
the natural gas and the natural gas products, and they are 
moving them out of the Gulf Coast into more local areas, and 
you are seeing tremendous job growth in those areas.
    Mr. Latta. Well, that is very important because in my 
congressional district, I have 60,000 manufacturing jobs, and I 
mean, we make everything, so when you are thinking about from 
steel to float glass, and you go right down the line to very 
small companies that are out there manufacturing. And also, not 
only manufacturing for something in this country, but also for 
export.
    And, you know, I think it is important that as you look at 
that because of those multiple reasons why companies look to, 
you know, come into an area, they look at things like, you 
know, what is out there. And one of the things that I know when 
I have talked to the hundreds and hundreds of companies that I 
have visited in very short periods of time over the last 
several years, you know, cost of energy is always at the top of 
their list and then, also, the availability into the future of 
that energy.
    And so, when you are looking at that, you know, how are we 
going to make sure that when someone is looking at an area that 
we can say that they have that energy that they have it into 
the future because again I think what you said that, you know, 
you are bringing it from different parts of the country to 
other areas, how important it is then for companies to make 
sure that they have that energy locally?
    Mr. McMahon. Well, that is where we work with our customers 
to make sure that we bring natural gas to the communities and 
to the areas. That is the reason you have seen such an 
expansion of the interstate pipeline system. You know, where it 
used to primarily move gas from the south to the north, it is 
now moving gas east-west, north-south, and south-north. So we 
have been moving pipelines to attach to new manufacturing and 
new demand centers as they grow, and so the Natural Gas Act has 
given us the flexibility to meet the changing needs and 
location of manufacturing and production.
    Mr. Latta. Thank you.
    Dr. Tierney, how can FERC and other federal agencies better 
support this infrastructure buildout, and how can these 
agencies better coordinate with state and local entities?
    Ms. Tierney. Well, to begin with, as I mentioned in my 
original statement, I believe that FERC should do a better job 
of taking into consideration state objectives. Many states are 
quite interested in developing their gas resources. Others are 
interested in reducing reliance on natural gas. Those 
considerations, I believe, are things that FERC should be 
looking at when it is considering whether a project is needed.
    But I also think in light of the comment that you made 
earlier about the important global trends that are going on in 
energy use, one can think about the role of U.S. manufacturing 
and U.S. production and innovation in selling products to those 
other nations that don't rely on importing things like gas or 
oil over time, but then can use renewable resources in those 
locations as well.
    Mr. Latta. Well, thank you very much, Mr. Chairman. My time 
has expired, and I yield back.
    Mr. Peters. Thank you. The Chair now recognizes the 
gentleman from Iowa, Mr. Loebsack, for 5 minutes.
    Mr. Loebsack. Thank you, Mr. Chair. I want to thank 
Chairman Rush and Ranking Member Upton for holding this hearing 
today, and I want to thank you to the witnesses, a big thank 
you to the witnesses for being here as well. I really 
appreciate this.
    Although Iowa does not produce any natural gas, natural gas 
accounts for over one-fifth of the total energy consumed in our 
state. And nearly 60 percent of the natural gas delivered in 
Iowa is consumed in the industrial sector and plays a critical 
role in supporting also the production of clean-burning 
biofuels. So we use natural gas to help produce ethanol, and 
what have you, which are also a key economic driver in our 
rural communities, as you know. Additionally, over half of Iowa 
residents use natural gas as their primary heating fuel to heat 
their homes. Iowans regularly face, as you know, some of the 
harshest winters, although this winter hasn't been so bad, so 
my costs haven't been quite so high.
    But it is absolutely critical that folks who rely on 
natural gas to heat their homes are not facing unnecessarily 
high costs when they are doing so. We have heard from several 
witnesses today regarding how modernizing Section 5 of the 
Natural Gas Act to allow for refund authority aligned with what 
already exists under the Federal Power Act could help put more 
power in the hands of natural gas consumers, which is something 
I think a lot of us are interested in doing and when it comes 
to fighting for just and reasonable rates. And I know my 
colleague, Mr. Butterfield, has recently introduced bipartisan 
legislation on this issue as well.
    So I want to start out, Commissioner LaFleur, I would like 
to start with you. Do you agree with Mr. McMahon's and I will 
get to you, Mr. McMahon, when this is over, so tell me if I am 
misrepresenting you. But do you agree with Mr. McMahon's 
testimony on why Section 5, as fair as it is, specifically 
argues that because pipelines have negotiated rates, there is 
no need for Section 5 reform and that any potential rate 
reductions would not flow to consumers? So, just if you would 
comment on that.
    Ms. LaFleur. No, I respectfully disagree. First of all, 
when FERC does use its Section 5 authority, FERC looks closely 
at what percentage of the pipelines as on negotiated versus 
stated rates, and it is certainly true that there are pipelines 
with a lot of negotiated rates where this doesn't matter. But 
people like Mr. Worsinger's customers and public gas and other 
customers of gas distribution companies often pay the stated 
rate, and so it would matter to them to have the Section 5 
reform.
    Also, at least in--I used to run a gas distribution company 
although a long time ago, and as Congressman Upton said 
earlier, the state regulators make you give back the money if 
you pay more or less to the pipeline companies. Maybe not that 
same day, but the next time you have a rate case, which is 
required on a regular basis, the distribution companies would 
be required to reduce their rates because they are regulated, 
you know, in Des Moines or all of the state capitals.
    Mr. Loebsack. Right, OK. Yes.
    And I would like to go to you, Mr. Worsinger, then, if you 
would like to respond.
    Mr. Worsinger. Yes. Thank you, Congressman.
    I think the best way to talk about this is to refer to the 
Tax Cuts and Jobs Act of 2017. I have the honor of not only 
overseeing the City of Wilson's gas system but I also look 
after their electric system. With our electric system, our 
electric wholesale provider had their costs reduced by the Tax 
Cuts and Jobs Act. They lowered our rates effective January 1, 
2018. We immediately got the results of those lower costs.
    Our gas transmission pipeline took over a year for them to 
reduce rates, and they did not do a refund because they didn't 
have to and that not only affected the city of Wilson, there 
are actually eight municipally-owned gas systems in the state 
of North Carolina all served by that one pipeline who did not 
get the reduced rates for over a year. And what happened to 
that money that was the costs were reduced, and the pipelines 
kept it.
    Mr. Loebsack. Right.
    Mr. McMahon, would you like to respond?
    Mr. McMahon. Yes. There are a couple of points is, to be 
clear, I would agree with Commissioner LaFleur that if somebody 
is paying the stated rate and the stated rate goes down, they 
get a benefit. But over 60 or closer to 70 percent on most 
pipelines now are people who are not paying the stated rate, so 
they wouldn't, unless the rate fell below their contract 
levels, they would not get a benefit. There would be nothing to 
refund to those customers, so I want to be clear on that.
    There has been both Mr. Worsinger and Commissioner LaFleur 
have mentioned their frustration about the tax cut. But I would 
like to remind the committee that FERC has had a longstanding 
policy when it comes to pipeline rates of not allowing single 
issue rate adjustments, so if the pipeline, if the rates had 
gone up, we wouldn't have been able to go in and ask just for a 
price increase because our taxes went up. We would have to file 
a full-blown Section 4 case.
    This is different than the electrics who, as Commissioner 
LaFleur said, are on some type of index-based or formula rates.
    Mr. Loebsack. Right. I did have a question connected to 
that, but I ran out of time, and I will yield back now. Thank 
you. Thank you all again.
    Mr. Peters. Thank you. The Chair now recognizes the 
gentleman from Michigan, Mr. Walberg, for 5 minutes.
    Mr. Walberg. Thank you, Mr. Chair, and thanks to the panel 
for being here. The state of Michigan has one of the largest 
natural gas deposits in the entire nation--we are, thankful for 
that--with almost 1.1 trillion cubic feet of underground 
natural gas storage. As harsh winters affect my state, natural 
gas and its ability to be stored in our underground capacity 
make energy demand a lot easier to plan for. It is no surprise 
that more than 75 percent of households rely on natural gas, my 
own included, to heat their homes in Michigan.
    Combined with its low environmental impact and its strong 
reliability, natural gas is a great alternative for powering 
our country. There is no question the impact that natural gas 
has had on the everyday lives of Michiganders and our state's 
economy. As decisions related to the future of the energy grid 
of the nation are considered, policies looking to further 
increase production and expansion of natural gas infrastructure 
are critical.
    And so, Mr. McMahon, it seems that some of the policies in 
the Clean Future Act offered by my colleagues on the other side 
might lead to a decrease in new pipeline infrastructure. Do you 
think that instead, we should be encouraging oil and gas 
production and construction of new natural gas pipelines in 
this country?
    Mr. McMahon. I think that we--the natural gas pipeline 
industry plays an important role in the growing economy of this 
country and the providing of jobs. As you have seen, over the 
last 15 years, we have been allowed to build pipelines, and 
then that has spurred the economy. As more natural gas is 
produced, there are markets, you know, in foreign countries 
where I think LNG would be a great benefit to the global 
climate concerns, and I think continued production of natural 
gas will keep the costs low to consumers; increase the 
availability of manufacturing for the manufacturing sector 
especially since gas serves both as a fuel and a feedstock in a 
number of processes.
    Mr. Walberg., Which certainly means we need a growing labor 
force in that area as well. And so, you know, my constituents 
include many skilled trade workers employed by the energy 
industry all across the district. Can you discuss the type of 
jobs that the natural gas pipeline industry provides for 
employees and contractors and the type of jobs and extent 
numbers of jobs that are needed at this point in time?
    Mr. McMahon. Well, on the construction side as when a 
pipeline is being built is, if you think of a single 
construction spread of somewhere around 30 miles of pipeline, 
those typically employ 500 skilled laborers ranging anywhere 
from equipment operators to welders to other types of skilled 
and those are good-paying, you know, jobs with good benefits. 
The industry itself, while we have become less employee- 
intense out in the field, you know, where we do have field 
operations again, those are good paying jobs with good 
benefits.
    But as we start building infrastructure, if you are 
building a big pipeline, you may have two to three thousand 
people employed at any given time working on that pipeline. And 
then obviously in the communities where the pipeline is being 
built, you know, they are getting the benefit of a kind of an 
uplift of sales of all the employees in those areas.
    Mr. Walberg. It was interesting to see some major 
construction of pipelines going through my district, a couple 
of large ones, and the numbers of employees, the level of pay, 
and wages that were there with benefits. And the extent of the 
time period that they were employed on those pipelines gave 
encouragement to be able to talk with younger people and say, 
if you are looking for a career, there are all sorts of options 
there. So we want to see that continue.
    Thank you, Mr. Chairman. I yield back.
    Mr. Peters. Thank you. The Chair now recognizes the 
gentleman from Massachusetts, Mr. Kennedy, for 5 minutes.
    Mr. Kennedy. Thank you, Mr. Chairman. I want to thank 
Chairman Rush and Ranking Member Upton for convening this 
hearing, and I thank our witnesses for testifying and your 
presence here.
    Today, in the United States, nearly 80 percent of black 
Americans live within 30 miles of a coal plant, breathing in 
toxic chemicals and living with health consequences of our 
deference to fossil fuels. More than 80 percent of Latinos live 
in American counties where at least one federal air pollution 
law has been violated. In cities across our country, low-income 
communities suffer from extreme heat zones and a lack of tree 
canopy and air conditioning, raising the risks of asthma and 
heart disease for people already living in areas with limited 
access to quality, affordable health care.
    Now, I know we are here today to discuss modernizing the 
natural gas infrastructure, but I don't believe we can 
effectively do that without acknowledging the fundamental flaws 
in our nation's energy policies because far too often, our 
system rewards industry interests at the expense of public 
interest and American lives. We are well aware of the need for 
a comprehensive approach to climate change, but by no means can 
we simply ignore the climate risks that we ask ratepayers and 
communities to continue to pay for the--and ask them to 
continue to pay for the consequences.
    So, Commissioner LaFleur, broadly speaking, is FERC 
required to consider the environmental effects of a proposed 
infrastructure project during its public interest 
consideration?
    Ms. LaFleur. Yes, I believe so. First of all, FERC has to 
consider the environmental impacts when it does the 
environmental review under the National Environmental Policy 
Act, but it is also a key part of balancing the cost and 
benefits to determine the public interest, and I believe the 
law already allows that the public interest can include climate 
impacts. That is what the DC Circuit said.
    Mr. Kennedy. Do you believe that FERC must consider the 
environmental impact then when approving a natural gas project, 
to be more specific?
    Ms. LaFleur. Yes.
    Mr. Kennedy. So, I am concerned, Madam Chair. One of your 
former colleagues recently wrote in a concurring opinion that 
he ``respectfully disagrees with the Supreme Court's finding'' 
that FERC is required to consider environmental effects during 
its approval process. Would you agree with that statement?
    Ms. LaFleur. No. Well, I disagree on two counts. First of 
all, my reading of the law is that the public interest standard 
is robust enough to allow FERC to consider things that were not 
known in 1938, like climate impact; other things that were not 
known in 1938 are certainly considered.
    Mr. Kennedy. Is FERC free to disregard----
    Ms. LaFleur. I also don't think FERC can gainsay what the 
courts say. Yes, I am sorry.
    Mr. Kennedy. No, no. I was interested in understanding 
whether that FERC can ignore a Supreme Court finding.
    Ms. LaFleur. FERC has to follow what the courts tell it.
    Mr. Kennedy. And is that then if I can ask, given the 
articulation of one of your former colleagues, how am I 
supposed to interpret that?
    Ms. LaFleur. I think he has an honest disagreement of 
belief of how he reads the Natural Gas Act, which is why there 
is a process for appealing from FERC, and courts can tell FERC 
they did it wrong, as the Sierra Club case, the Sabal Trial 
case said, and several other recent cases.
    Mr. Kennedy. OK, so does the--excuse me. Does the Natural 
Gas Act need to be amended to clarify a public interest 
determination to include a consideration of all environmental 
impacts, including climate change?
    Ms. LaFleur. I think that would be an excellent addition to 
the law because I think a recent statement of congressional 
intent is always extremely valuable. But I think I wouldn't 
want anyone to argue if it doesn't pass that wasn't already in 
there because public interest is a very broad standard.
    Mr. Kennedy. Given that it is a broad standard, 
Commissioner, that kind of leads to my next question. Climate 
change is an issue that has gotten rather politicized over the 
course of the past several years, given the fact that it is a 
broad standard. Do you think specifying and laying out some 
details to consider with that standard would be helpful or 
hurtful?
    Ms. LaFleur. Yes. I think the more clarity is, there is 
less room--FERC is a creature of statute, and the clearer the 
statutes are, the less room there is for FERC to--the less 
wiggle room to misinterpret the statute.
    Mr. Kennedy. And when it comes to the issue of pipeline 
siting, do you believe that that issue has become politicized 
within the agency?
    Ms. LaFleur. I think there has been just a lot of partisan 
voting at FERC, unfortunately, over the last several years. I 
was a part of that. It takes two sides to be partisan, so I am 
not pointing fingers at anyone, but there are just big 
disagreements about climate change and the future of the 
generation mix, and this issue is one of them.
    Mr. Kennedy. Ms. Tierney, and then back to you afterward, 
Commissioner, if I have time. Could FERC adapt and apply a 
metric like the social cost of carbon to a significant 
determination of greenhouse gas emissions under NEPA?
    Ms. Tierney. I certainly think FERC has the authority to do 
that. Again, I am not a lawyer, but there are ways to monetize 
these impacts on infrastructure, and on people, and that is 
what the social cost of carbon does, so yes.
    Mr. Kennedy. And what is impeding FERC from doing so?
    Ms. Tierney. Different interpretations about the importance 
of doing that.
    Mr. Kennedy. OK, yield back. Thank you.
    Mr. Peters. The gentleman's time has expired. The Chair now 
recognizes the gentleman from West Virginia, Mr. McKinley, for 
5 minutes.
    Mr. McKinley. Thank you, Mr. Chairman. West Virginia has 
really been impacted in the last few decades with the 
expiration--with the Marcellus, Utica, and eventually the 
Rogersville, so we are keen on this what is happening in the 
Mid-Atlantic area as we try to get more gas out of the ground 
and try to move it around.
    So, but what we are concerned about is the infrastructure 
and very concerned about the impact this legislation could have 
on the infrastructure. Because EIA came out with, they had 
their report, and one of the items that they brought about 
their attention focus was on the cost of the gas to the 
consumer, which one was one of the six major things is the 
availability and the capacity of transmission pipelines to move 
gas, natural gas from producing areas, storage facilities, and 
trading hubs to distribution.
    We have a problem with this and that here it is in West 
Virginia with all that gas, be it we are in the middle of the 
run of the cost across this country in gas rates. So we have 
got to find if that is accurate; we have got to find a way to 
build transmission pipelines. And I am concerned that through 
this legislation, we are going to see a reduction of that, and 
that is ultimately going to hurt manufacturing and consumers 
with it. I mean, there have been billions of dollars invested 
in the Mid-Atlantic area, I think. According to my statistics, 
124,000 jobs have been created with it. All that investment is 
also helping out those counties to help out on schools, first 
responders, health care, and on and on and on.
    So, I am really concerned about whether or not this 
legislation the impact it could have on it to slow things down. 
This is a chance for an economic recovery in the Mid-Atlantic 
and the Appalachian area, and we are seeing people try to stop 
it using; they are fighting the commerce clause of the 
Constitution, preventing us from having pipelines across state 
lines. I think that ultimately will be played out with it.
     So if we are trying to prevent this inhibiting effect that 
this legislation has, Mr. McMahon, if I could focus in on you 
just a little bit, what is your opinion? Do you think that this 
could jeopardize the economic development in the Mid-Atlantic 
and those producing areas of natural gas?
    Mr. McMahon. You know, as I said in my opening statement, 
the thing that pipelines really need is stability and 
predictability; if we know what the rules are, we are going to 
abide by the rules. And to get a project built, as you are 
aware, it takes time, so it takes about a year before you ever 
get to FERC and then the FERC process.
    So if midstream the rules change, you might have projects 
that are hung up because the rules have changed, and they 
didn't get, so that is the reason we keep saying that the 
Natural Gas Act has worked well. It is not broken. It doesn't 
preclude, as the courts are telling us what we should and 
shouldn't do, certain reviews. I think that the more 
restrictive you make it, the more concern you rightfully have 
that it is going to inhibit or slow down the buildout of 
necessary infrastructure.
    Mr. McKinley. Let me build up a little bit. I am going to 
switch gears with you just a little bit because, in the Mid-
Atlantic area and this Appalachian and West Virginia area, we 
have been producing quite a bit of natural gas liquids, ethane, 
and the like.
    The question here would be if these are the feedstocks for 
petrochemical manufacturing and could diversify the economy in 
West Virginia, eastern Ohio, parts of Pennsylvania, and 
Virginia if we could have a storage hub of these products there 
so that a secondary hub that we have comparable to what is 
going on in the Houston market, so instead of the liability, 
the exposure we have of that storage hub with these ethane 
storage in West Virginia, do you have an opinion about that, 
about the possibility of having a second petrochemical, not 
competing, but just a secondary hub?
    Mr. McMahon. Well, on the liquid side, that is kind of 
outside INGA's kind of bailiwick since we are kind of natural 
gas transmission operators. But, you know, the development of 
hubs and pricing centers for either natural gas or natural gas 
liquids, I think, is beneficial to the entirety of the 
industry.
    Mr. McKinley. OK. Mr. Chairman, I yield back the balance of 
my time.
    Mr. Peters. Thank you. The Chair now recognizes the 
gentleman from Pennsylvania, Mr. Doyle, for 5 minutes.
    Mr. Doyle. Thank you, Mr. Chairman. I want to thank the 
Chair and Ranking Member Upton for holding this hearing.
    Natural gas is a vital fuel for our economy. It is 
essential to keep the lights on all over the country, and in 
western Pennsylvania, it has been a tremendous economic driver 
providing good-paying jobs and cheap energy that helps 
businesses grow. It also has helped lower carbon emissions from 
the power sector as it has replaced coal as the main power 
source in many parts of the country.
    Unlike in western Pennsylvania, most places do not have 
abundant natural gas reserves. They need pipelines to get the 
gas, and the buildout of pipeline infrastructure is vital to 
providing cheap natural gas around the country. However, we 
must make sure that we strike the right balance between 
developing this vital infrastructure and ensuring that 
landowner rights are not being trampled and that we are 
accounting for climate change, and that ratepayers are not 
being overcharged.
    Mr. Worsinger, you mention that 95 percent of APGA members 
are captive to a single interstate natural gas pipeline. How 
does this weigh on a natural gas customer's decision to file a 
Section 5 complaint against the one pipeline it needs to get 
its gas from?
    Mr. Worsinger. The cost to bring forth a Section 5 filing 
is very expensive, something that most of APGA's members would 
not be able to afford. It would far exceed, probably, their 
cost, annual gas transmission cost for a couple of years, so it 
is not likely that they would do that.
    But let me just add we support the construction of the 
Atlantic Coast pipeline. That is going to bring the gas from 
your area down to our area in eastern North Carolina, where we 
desperately need it. One of the other congressmen mentioned 
about having a float glass plant in his area. There was one 
that was considering eastern North Carolina. Unfortunately, we 
did not have the natural gas capacity for that plant, and that 
plant ended up being constructed in Canada. We need these 
pipelines for that.
    Mr. Doyle. Thank you.
    Commissioner LaFleur, if Congress were to reform the 
Natural Gas Act to include refund authority, do we also need to 
look at conforming changes to Section 4 of the Natural Gas Act, 
and do you believe that giving FERC refund authority alone 
would suppress the incentive to build the needed pipelines?
    Ms. LaFleur. I am not aware of any mirroring changes that 
need to be made in Section 4 because there already is a robust 
refund authority. And I don't believe on the electric side in 
Section 206, where there has been refunding authority for a 
long time, that has suppressed the development of the 
transmission industry. I think, as Mr. McMahon has testified, a 
lot of customers are on negotiated rates. It would clearly have 
an impact, but it would be a new secure, stable regime, a 
different one than they have now.
    Mr. Doyle. Thank you.
    Dr. Tierney, could you provide us with some more detail on 
what you believe FERC should consider? You said in your written 
testimony FERC should expand its determination of significant 
versus nonsignificant impacts and broaden its definition and 
consideration of project alternatives while doing its NEPA 
assessments. Can you just expand on that a little bit?
    Ms. Tierney. Sure, I would be happy to. I would just focus 
on two things. One of them is that FERC does not spend 
sufficient attention on no pipeline alternatives--excuse me, a 
no--excuse me, I am really sorry--no pipeline as an alternative 
to the proposed pipeline. I really apologize. And as 
Commissioner LaFleur said, there are instances where there is 
underutilized capacity in a region that could be taken 
advantage of, and as you said in a balancing test of whether or 
not you actually could use today's infrastructure without the 
environmental impacts, that would be a great thing that FERC 
could do. Let me stop there because I know you have limited 
time.
    Mr. Doyle. Yes.
    Mr. Chairman, I thank you, and I will yield back.
    Mr. Peters. The gentleman yields, and the Chair now 
recognizes the gentleman from Virginia, Mr. Griffith, for 5 
minutes.
    Mr. Griffith. Thank you very much, Mr. Chairman. What I 
would like to do, first, is ask for unanimous consent to submit 
a letter for the record from Mrs. Irene Leach of Elliston, 
Virginia, that was sent yesterday to the chairman and the 
ranking member of this committee and subcommittee.
    Mr. Peters. Without objection so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Griffith. All right, I appreciate that. In that letter, 
Mrs. Leech, who I have known for many years, expresses 
frustration about landowner rights, and because co-location 
wasn't looked at, and maybe it wouldn't have helped her on one 
of them, but she currently lives in the pathway or near the 
pathway of the Mountain Valley pipeline with a family farm that 
has been in the family for over 100 years in the pathway of the 
Atlantic Coast pipeline.
    And this is a problem, and she extols; I encourage you all 
to read the letter. She extols the problems that her family has 
had and their concerns. On top of that, I have heard from 
numerous constituents. But, most importantly, and refresh the 
committee's mind, they have heard this before and, Ms. LaFleur, 
you have probably heard it before too. But when Mountain Valley 
first came to the area, I learned about it when a member of the 
board of supervisors in one of the affected counties called me 
and said, ``Morgan, there are surveyors all over the county 
saying that there is some kind of gas pipeline coming through, 
what do you know?''
    The local folks didn't know anything. I didn't know 
anything. This has got to change. Landowner's rights have to be 
respected. And, accordingly, I will tell you that, you know, 
this brought a number of us together. After not receiving an 
additional hearing, FERC turned us down for an additional 
hearing; I sent it to the chairman. Ms. LaFleur, you were not 
chairman at that time, but I sent several requests to the 
chairman, along with then-Congressmen Goodlatte and Hurt, to do 
an additional hearing. Not to change the decision, per se, but 
the landowners felt they weren't being heard. One additional 
hearing in Virginia, two would have been great, but we would 
have accepted one. We got nothing.
    So, when you can't go to your local officials, you can't go 
to your state officials, and you can't go to your federal 
officials and feel like you are ever being heard, reforms do 
need to happen. Accordingly, Tim Kaine and I introduced 
similar, not identical, but similar legislation in the House 
and the Senate. Whenever you can bring Tim Kaine from his side 
of the political spectrum and Morgan Griffith from my side of 
the political spectrum together, you have done something. I am 
not sure it is a good something, but you have done something.
    And my bill is H.R. 173, and it amends the Natural Gas Act 
to create greater transparency and additional public input. It 
requires FERC to hold public meetings in each county in which 
the project will be located and restates U.S. federal policy 
that the taking of property through eminent domain be limited 
in situations in which the taking is for the public, not 
private use which is modeled after a George W. Bush executive 
order. It also requires the taking of land under a conservation 
easement be given compensation for the lost conservation value 
of the land.
    Mr. McMahon, last week, FERC announced a reorganization and 
a new division dedicated to addressing landowner issues. 
Obviously, they have started to hear after five or six years of 
haranguing. Do you support FERC's actions to process filings by 
affected landowners more quickly?
    Mr. McMahon., I do.
    Mr. Griffith. And you want it to be simpler, correct?
    Mr. McMahon. Yes. I think that it is a good thing that they 
address those issues more quicker. I think where it gets 
complex is, you know, from going back to my predictability and 
stability, if you have got landowner issues that are getting 
resolved before the environmental issues, you still don't know 
what the final outcome is going to be unless they are both 
kinds of done on the same course.
    Mr. Griffith., And I appreciate that. I mean, clearly, 
landowners need to feel like they are at least being heard, and 
some of their concerns are being addressed. And when you get a 
blank stare or no answer for a long period of time, that does 
not help the landowner.
    Are there other steps that FERC or Congress could take to 
improve the process to further address landowner concerns? And 
I will raise that for anybody who wants to address it. I will 
start with you, Mr. McMahon, and then Ms. LaFleur.
    Mr. McMahon. Yes. I think one of the things is the industry 
is evolving, and we still have to get better. There is no we 
can't say anything but that. But what we are trying to do is, 
the last thing I know from our perspective is somebody like you 
hear about it, a project, for the first time from somebody 
other than us, that is one of the big changes we are trying to 
make is get more transparent with local and state officials.
    Mr. Griffith. I am going to switch gears because I have 
just got a little bit of time.
    Ms. LaFleur, at some point, we have to decide if we are 
going to do co-location; we have to decide who makes that 
decision. Does that belong to FERC, or does that belong to 
somebody else?
    Ms. LaFleur. I think it belongs to FERC under the Natural 
Gas Act. And I dissented on the Mountain Valley and ACP 
pipelines because they were so close in route. I think the step 
FERC took last week is a good step, assuming they follow 
through. It basically just does the rehearings faster so 
landowners can appeal, but I think there is a lot more that has 
to be done to make sure that the construction permits and 
eminent domain are sequenced to protect the landowner's rights.
    Mr. Peters. The gentleman's time has expired.
    Mr. Griffith. I yield back.
    Mr. Peters. The Chair now recognizes the gentleman from 
Maryland, Mr. Sarbanes, for 5 minutes.
    Mr. Sarbanes. Thank you, Mr. Chairman. Thank you to the 
panel. I want to ask some questions about Section 401 of the 
Clean Water Act, which empowers states and authorized tribes to 
issue water quality certifications that must be included within 
certain federal permits and licenses like natural gas pipeline 
projects. As you know, the Supreme Court upheld that this power 
is ``essential'' in the scheme to preserve state authority to 
address the broad range of pollution that threatens our 
nation's waters.
    Commissioner LaFleur, do you think Section 401 is an 
important part of the pipeline permitting process?
    Ms. LaFleur. Yes. When FERC issues a certificate, there are 
usually numerous conditions that are attached to what the 
pipeline has to do, and one of them is to get state water 
quality; almost always, in either a hydro or a pipeline case, 
there is almost always a state water quality certificate 
required.
    Mr. Sarbanes. Thank you.
    Ms. LaFleur. Sometimes numerous.
    Mr. Sarbanes. Right, and that is very important. In the 
recent Hoopa Valley case, the DC Circuit struck down the common 
industry practice of withdrawing/resubmitting, which is a 
method used to annually reset the 1-year time period for states 
to act. The case didn't delve into the scope of states' 
conditioning authority, but it did interpret a 1-year maximum 
time period for a state to decide on a water quality 
certification application.
    Again, Commissioner LaFleur, while the court case concerned 
a hydroelectric project, do you think the Hoopa Valley decision 
has implications on gas pipelines as well?
    Ms. LaFleur. Yes. After the Hoopa Valley case, which found 
that FERC was arbitrary and capricious for not finding a waiver 
in that case, FERC unanimously, all four Commissioners, ruled 
that the State of New York had waived its authority in the 
constitution pipeline. And we looked closely; I looked closely 
at Hoopa Valley to find a loophole that we wouldn't have to say 
that New York waived, but the court was pretty clear that that 
1-year filing and refilling was not kosher.
    Mr. Sarbanes. Yes. I have some concerns about where that 
leaves us because, in addition to the Hoopla Valley decision, 
the EPA has proposed a rule that would severely limit the 
authority of states to issue water quality certifications that 
protect their local water quality. It limits a state's ability 
to place conditions on a permit to protect their resources and 
narrowly interprets that 1-year time period in which states are 
required to act. It is kind of putting like a straitjacket on 
the process you would want to see for kind of thoughtful review 
and input at the state level. So now, if a state exceeds its 
time period without making a decision, the state would waive 
the authority it had under Section 401, and that is an 
interpretation that completely ignores common instances where 
states need more information to make an informed and thoughtful 
decision.
    Do you have any concerns with EPA's proposed changes to the 
Section 401 authorities, and it more likely or is the potential 
that this restrictive interpretation of a 1-year time period 
could result in states denying certifications in an attempt to 
avoid accidentally waiving their Section 401 authority? In 
other words, there is kind of a catch-22 potential here.
    Ms. LaFleur. Yes, I am not a big expert on the Clean Water 
Act, but I am concerned that the new EPA proposal really is 
inconsistent with the whole spirit of the Clean Water Act, and 
I just think it is a further example of how divided and 
polarized everything is. The states feel powerless to stop 
these pipelines that are coming through, so they are using 
their 401 authority, and then EPA is maybe overreacting by 
really cutting back the whole 401, not just stopping pipelines 
that will really hurt states' legitimate water interests, which 
is, you know, an overreaction maybe to an overreaction.
    And yes, I do think states are going to say no because they 
don't want to be caught in the 1-year rule, so as the year is 
ending, they are going to say no, and maybe pipelines that are 
needed won't get built because states will say no because they 
have to say no. So I think a little more moderately balanced 
approach would be better than we are now.
     Mr. Sarbanes. I appreciate that. And, you know, Maryland 
is experiencing this in one situation in particular. And, you 
know, that Section 401 authority, I mean, it is there for a 
reason, but it can only be meaningful for states in terms of 
protecting their water resources if there is some careful 
balance struck here, and I do have concerns that it is not 
happening. We want our federal agencies to work cooperatively 
with states and tribes, implement and enforce science-based 
water quality standards, and not impede their ability to 
fulfill those obligations under the Clean Water Act.
    So it is an important issue, one we will continue to bring 
attention to, and I thank you for your testimony, and I yield 
back.
    Mr. Peters. The Chair now recognizes the gentleman from 
Texas, Mr. Flores, for 5 minutes.
    Mr. Flores. Thank you, Mr. Chairman.
    Mr. McMahon, thank you for being here, and thank all the 
panel for being here today. I would like to talk about the 
impact of natural gas and its prices on electricity rates 
across the country. Data from the Energy Information 
Administration shows that residential consumers in my home 
state pay about 12 cents per kilowatt-hour as of November 2019, 
while in the same timeframe, residential consumers in the New 
England states had almost double the rate at 21 cents per 
kilowatt-hour. The abundant network for natural gas-fired 
electricity contributes significantly to our low electricity or 
our attractive electricity rates, while the thinner 
availability of pipeline networks of natural gas in the 
Northeast is contributing to higher prices for consumers.
    Mr. McMahon, you mentioned in your testimony that 
amendments to Section 5 of the Natural Gas Act could impact a 
pipeline's ability to modernize and expand its infrastructure. 
Can you drill into that a little bit for us?
    Mr. McMahon. Yes. It goes back to what I have said earlier 
about being predictable and stable; it is making a retroactive 
refund on something where you have been following the rules, so 
a pipeline is charging its just and reasonable rate it has been 
charging and somebody complains, all of a sudden you have to go 
back from the date that the rate is found to be unjust and 
reasonable and refund dollars that you really had no control 
over because you were following the rules. It creates 
uncertainty, and any time you create uncertainty in today's 
financial markets; it can affect your cost of capital. So if a 
lender or others are seeing that rates become more unstable, 
more uncertain, and revenue streams become more uncertain, it 
is going to affect your cost of capital, and if those costs go 
up, it may affect your investment decision on marginal or not 
as good of projects.
    Mr. Flores. Does reduce access to pipeline infrastructure 
adversely impact the electricity rates?
    Mr. McMahon. Yes.
    Mr. Flores. OK. And so if pipeline infrastructure is being 
blocked for some reason in a particular geographic area, where 
do those states, where do those areas, those consumers get 
their energy?
    Mr. McMahon. On the electric side, Congressman, I am not 
really good on how the, you know, electrons flow, but, you 
know, I think what you are seeing is the constraints that are 
in the Northeast is the pipeline capacity that exists has 
become very valuable and very constrained.
    Mr. Flores. Right.
    Mr. McMahon. And so, until those constraints are relieved, 
then the electric industry is going to have to move electrons 
around to meet those needs.
    Mr. Flores. And so homes have to use heating oil to heat 
their homes, and electricity is obtained from legacy coal-fired 
plants, all of which contribute to higher prices for those 
consumers and which contribute to higher carbon emissions to 
the environment. So I appreciate the panel being here; thank 
you. I yield back the balance of my time.
    Mr. Peters. The gentleman yields. The Chair now recognizes 
the gentleman from Texas, Mr. Veasey, for 5 minutes.
    Mr. Veasey. Thank you very much, Mr. Chair. I wanted to ask 
Commissioner LaFleur a question. In your testimony, you 
discussed the evolution of the Natural Gas Act to reflect our 
nation's changing energy priorities. Specifically, you 
mentioned the notice of inquiry FERC opened to take a 
comprehensive look at the pipeline process. You wrote that the 
development of a better process, ideally through a bipartisan 
consensus order, would be a more fair, clear, and efficient one 
than the one handed to FERC through court orders.
    Can you speak a little bit more about what that new process 
might look like? And I would also like for Ms. Tierney to 
answer that as well.
    Ms. LaFleur. Well, thank you for the question. As Dr. 
Tierney said, FERC has received literally thousands of comments 
in that docket. And I think if FERC would have to look at the 
several areas that are covered in the notice of inquiry; how it 
looks at need; how it does its environmental review, and how it 
does landowner rights; how it does the balancing test.
    I think in each one, FERC would have to come up with, we 
couldn't just say, oh, we will consider it all, put it in a big 
stew pot, and we will come up with public interest. That 
wouldn't give anyone any certainty or predictability, and FERC 
would have to come up with new standards. For example, if you 
are looking at need, one thing I have said is if a state 
regulator said the pipeline is needed to serve customers, that 
carries a lot of weight with me as opposed to just like we are 
bringing it to market and we will see who wants it.
    So, look at the different types of, you know, look at the 
different cases that have come in and set new standards, but 
that is what FERC does. FERC has developed new policies on all 
kinds of things as the nation's energy system evolved.
    And similarly, with environmental, you would look at, OK, 
if we are going to look at greenhouse gases, what kind of 
information--one of things FERC would really have to look at is 
what do we ask pipelines to come in with? Now we just ask them, 
come in with your route, come in with your construction plans, 
et cetera, come in with your who has the precedent agreements.
    FERC would have to ask, what do you know about what the end 
uses are going to be? How long will they be there for? Then you 
could ask the state, how long do you think you will be burning 
gas or whatever? They would have to come up with new rules, not 
something that they would just do casually, but I think it is 
within the authority and within the competency of the agency.
    Mr. Veasey. Yes, thank you.
    Ms. Tierney?
    Ms. Tierney. I would say just what she said. I would very 
much agree with that, and I would just make one more 
suggestion. Right now, FERC adopts, in many cases, provides a 
very thorough record. Not complete but thorough record of 
environmental impacts, but it does not bring that into its 
review of whether a project is needed and whether it is needed 
in light of state policies that would call for a reduction in 
greenhouse gas emissions over time.
    So, right now, the 1999 policy statement identifies that 
FERC will look at all relevant factors, but FERC is not doing 
that. So even going back to the actual letter of the original 
statement in 1999 would be better than today because today, the 
box is checked if you have a precedent agreement, and that is 
not consistent with the public interest test.
    Mr. Veasey. Yes, good.
    Commissioner, what role do you think that FERC should play 
in the public understanding of exactly how the pipeline process 
works and the everyday role that pipelines play in our lives? 
And what I mean by that is, obviously the groups that come up 
here are very well-funded, whether they are from the fossil 
fuel industry or whether they are from consumer groups. They 
know what they are talking about. They understand exactly the 
role that pipelines play. But just the everyday person out 
there, whether it is, you know, this time of year particularly, 
you know, where you are going to get your natural gas from or 
how you are going to heat your home, the expansion of 
manufacturing in this company, climate change, all of those 
different things that these groups that are well-organized know 
about, but I really don't think that the average person really 
understands that well, and what role do you think the agency 
should play in really helping educate the American public?
    Ms. LaFleur. I think that I think, and this is something I 
have thought a bit about, FERC should put more effort into 
making it easier for members of the public to participate in 
its cases potentially through more technology, through a more 
user-friendly website or other ways that people who are like 
Representative Griffith's constituents who are directly 
impacted by something can come into FERC more easily. FERC has 
worked on that, but there is still a way to go.
    As far as general education, I think FERC has a role. I 
think state commissions have a role. Often, the people who care 
the most are either the ones who are building the pipeline or 
the ones who it is going through their farm. But what about the 
people on the end that need the gas to heat their schools? 
Sometimes they are not on the docket anywhere. And I think 
those people need to be informed through FERC, through their 
state agencies, and through the industry of, you know, what the 
interests are.
    Mr. Peters. The gentleman's time has expired. The Chair now 
recognizes the gentlewoman from Washington, Mrs. McMorris 
Rodgers, for 5 minutes.
    Mrs. McMorris Rodgers. Thank you, Mr. Chairman. I 
appreciate everyone being here today. The shale revolution over 
the past decade has made the United States the global leader in 
natural gas production. It is striking to me when I was first 
elected to Congress, there was a lot of concern about the 
rising cost of natural gas and our dependence upon other 
countries for a natural gas supply, and today, we are one of 
the largest exporters of natural gas in the world.
    This renaissance of natural gas production has created 
hundreds of thousands of jobs, decreased prices of energy and 
home heating, increased American energy independence, and 
reduced emissions. We should all be proud of this responsible 
and innovative use of our natural resources. As countries like 
China and Russia seek to use their energy resources to pressure 
other countries, America must counter their influence with our 
natural gas exports. China is building hundreds of coal-fired 
plants in developing nations as part of its Belt and Road 
Initiative. Russia continues to use its natural gas, which is 
almost 50 percent higher in lifecycle greenhouse gas emissions, 
to influence European countries.
    If we expand our LNG infrastructure, EIA estimates our 
exports can more than double by 2050. By replacing these coal 
plants in Asia, our LNG can reduce GHG emissions by up to 54 
percent. Calls to ban fracking, block pipelines, and reduce our 
natural gas exports will result in the loss of hundreds of 
thousands of jobs, increased energy prices, increased 
emissions, and the spread of authoritarian influence globally. 
Instead, we should be focusing on continuing to modernize and 
build our infrastructure so that we can meet the world's 
growing demand for our clean natural gas.
    Mr. McMahon, the U.S. has, arguably, the most highly 
developed and technologically advanced pipeline network in the 
world. Combined with our tremendous shale resources, do you 
believe the U.S. has the global energy advantage when it comes 
to the price and supply of natural gas?
    Mr. McMahon., I do.
    Mrs. McMorris Rodgers. And as a follow-up, how have 
pipeline and LNG exports helped our trading partners reduce 
their carbon emissions?
    Mr. McMahon. Well, as the pipeline industry has built out 
the infrastructure, the LNG facilities, a lot of them which 
were originally designed to be import terminals, are now 
exporting cargo. So providing LNG to the world, it is allowing 
us to put our natural gas at work in other parts of the 
country, or I should say the world, where they are burning, you 
know, coal, fuel oil, and other things. So I think it has been 
a very big boon to us to be able to export clean energy to the 
world.
    Mrs. McMorris Rodgers. Well, and as I mentioned earlier, I 
believe that we need to be expanding our LNG infrastructure to 
increase exports to markets such as Asia. FERC is the lead 
agency for siting interstate natural gas pipelines, and many 
state and federal agencies have a role to play. They may review 
aspects of an application, or they may be required to issue 
separate permits.
    To Mr. McMahon again, are you concerned that some states 
are using their permitting authority to block pipelines for 
political reasons?
    Mr. McMahon. What I will say is that over the last five or 
six years, we see it becoming increasingly more difficult to 
build pipelines in certain areas by the inability to obtain the 
necessary permits.
    Mrs. McMorris Rodgers. So, what suggestions do you have to 
improve the coordination for quicker decisions?
    Mr. McMahon. Well, I think that it is kind of twofold is 
the pipelines we typically build are those in interstate 
commerce, and those are crossing multiple state lines. The idea 
is that the Commission has found that the pipeline is in the 
public convenience and necessity, and it needs to be in 
interstate commerce. And it becomes very frustrating, and it 
kind of goes back to my stability and predictability is if you 
are getting all the way out, and you hit a roadblock because a 
state is holding up permits or refusing to issue or denying 
permits, then, you know, you may be getting to where the gas is 
actually very much needed, but it is blocked.
    Mrs. McMorris Rodgers. Right, right. And, unfortunately, 
that is happening too much today.
    Mr. McMahon. It is happening more than it ever has in my 
career.
    Mrs. McMorris Rodgers. Well. Well, our pipeline 
infrastructure has been so important not just to Americans but 
also to the rest of the world, so I appreciate everyone being 
here and appreciate the hearing today. I will yield back.
    Mr. Rush. The gentle lady yields back. The Chair now 
recognizes himself now for 5 minutes for the purposes of an 
opening for questioning the witnesses.
    Ms. Tierney, Hi.
    Beg your pardon?
    Ms. Tierney. Good morning, Mr. Chair.
    Mr. Rush. Good morning. Good morning. As part of its public 
interest review, FERC relies on precedent agreements to 
determine pipeline needs during the application review process. 
Do you think that this is sufficient to determine pipeline 
need, and what other factors should be included?
    Ms. Tierney. Thank you for that question. I certainly think 
that it is relevant to know in a FERC review of whether or not 
a pipeline is needed to see if there is a precedent agreement. 
It is potentially very relevant as part of many different 
things that FERC should take into account.
    The other kinds of things are in the market for where there 
is demand for natural gas. Is that market located in a state 
where the state has adopted a policy to eliminate fossil fuel 
over time in that market? FERC might be interested to know 
whether there would be stranded costs of a pipeline in that 
circumstance and whether or not it would be a bad idea to allow 
yet another pipeline into a region.
    So demand is one thing, environmental and other state 
economic development policies, a variety of things; those 
things could support the need for a project or be against the 
need for a project in light of other pipelines that are already 
serving a region.
    Mr. Rush. There is a small municipality, very small, in 
Illinois. It is a town called Pembroke, Illinois.
    Ms. Tierney. OK.
    Mr. Rush. In Pembroke, Illinois, there are, I am not sure 
what the population is, but they have no access to natural gas 
at all, and Reverend Jesse Jackson, Sr., is really making that 
a public issue because the people are existing without any of 
the things that we take for granted.
    And I think does FERC assess there are citizens across the 
nation who may be dwelling in places, and cities and that how 
they are still in the Dark Ages as it relates to pipelines and 
access to modern conveniences such as pipelines?
    Ms. Tierney. I do think that FERC could take into 
consideration what is going on in a particular part. Am I 
assuming this is in the metropolitan area of Illinois?
    Mr. Rush. No, it is not.
    Ms. Tierney. It is not, OK.
    Mr. Rush. It is in the rural area.
    Ms. Tierney. OK.
    Mr. Rush. So my point is that we hear about, we have a lot 
of discussions about deserts.
    Ms. Tierney. Yes.
    Mr. Rush. Is there a pipeline desert in the U.S.?
    Ms. Tierney. This is true. And FERC will----
    Mr. Rush. Is there one? Is there a pipeline desert or a 
natural gas desert in the U.S.?
    Ms. Tierney. I think there are probably parts of the U.S. 
where there is insufficient access to natural gas.
    Mr. Rush. Yes.
    Ms. LaFleur. There are places, especially in, I think, 
pieces of New England, parts of the upper Midwest, that use 
propane delivered by truck because they don't have access to 
natural gas. Mostly little communities, kind of on the edges of 
metropolitan areas.
    Ms. Tierney. And I would add tribal reservations are an 
example where they are deserts.
    Mr. Rush. So my question to you is, are we satisfied with 
that, with that state for American citizens in the 21st 
century? Are we satisfied with that?
    Ms. Tierney. Well, I would assume that there are economic 
considerations that in which a pipeline company determined that 
it was too costly to build infrastructure to serve that low-
density area. I am not saying that it is good or bad, but that 
is the system that we have.
    Mr. Rush. And it is not the demand, and I want to say it is 
insufficient. It is a travesty.
    Ms. Tierney. Thank you.
    Mr. Rush. Because we have--this is the wealthiest nation in 
the history of the world, and the pipe, you know, we want to 
argue and make a point that we are energy sufficient or that we 
export energy and we have American citizens who don't have 
access.
    Ms. Tierney. Thank you.
    Mr. Rush. Thank you.
    The Chair now recognizes Mr. Johnson for 5 minutes.
    Mr. Johnson. Thank you, Mr. Chairman. I am really glad that 
we are taking up this issue because it is extremely important 
to the people that I represent in the oil and gas country in 
eastern and southeastern Ohio. You know, we sit on top of the 
Utica and Marcellus natural gas deposits, and over the last few 
years, we have seen the incredible economic and geopolitical 
advantages that oil and gas activity is bringing to the United 
States. And today's hearing gives us a good opportunity to get 
into the weeds and hear from some of our experts on how we can 
responsibly get natural gas to the customer without 
compromising all the benefits that we are seeing from this 
abundance.
    So, Mr. McMahon, you know, we all know low- and middle-
income households spend a larger share of their income on 
energy bills, so lower natural gas prices really help. In 
addition, in my district, we have seen growth and indirect 
employment surrounding new oil and gas development. Can you 
talk about the benefits that the average person sees, the 
person on the street, the person in the hills and valleys of 
eastern and southeastern Ohio, particularly those who may not 
benefit from direct employment in the energy industry?
    Mr. McMahon. Well, it kind of goes back to one of the big 
advantages is the availability now of natural gas. When I 
entered the industry, there were concerns about shortages and 
where the gas was going to actually come from. Now we have 
abundant natural gas. People have been able to enjoy low gas 
prices. It is also, as I have said earlier, had a manufacturing 
renaissance and a lot of the products that, you know, are used 
in everyday use such as some of the plastics and things like 
that, that, you know, everybody is buying are now becoming 
cheaper because they are being produced domestically.
    They are being produced with low-priced natural gas, which 
has driven down some of the normal products that people would 
use. So even though they may not be employed or having direct 
benefits, the indirect benefits from lower utility bills and 
lower consumer prices on things that used to be manufactured 
abroad or used, based on NAFTA, or something else, are now 
being able to be used by low-priced natural gas.
    Mr. Johnson. Yes. And, you know, I have been saying for 
quite a while to people in my district that, you know, they 
have seen promises of economic booms around energy for a long, 
long time. I mean, Ohio has been in the oil and gas business 
for many, many years. In fact, the first oil well drilled on 
the North American continent sits just off of Exit 25 from 
Interstate 77 in Caldwell, right in the heart of my district.
    And I have shared with folks that take, for example, you 
know, we have an ethane cracker plant that is going in across 
the river in Manaca, Pennsylvania. We have got another one in 
Belmont County that we are sitting on pins and needles waiting 
for the final investment decision, and it looks like everything 
is moving in the right direction. It has been my contention 
that these are just the tips of the iceberg that in addition to 
the low energy prices that natural gas brings, those that 
aren't employed in the energy sector will also benefit from the 
economic opportunities that are coming with these big 
petrochemical facilities, because when the textile 
manufacturers and the plastic manufacturers and others that use 
the ethylene and polyethylene and polypropylene that will be 
coming out of those facilities for manufacturing, I think our 
region is going to be flooded with businesses that want to come 
and set up their operations there. Am I wrong?
    Mr. McMahon. No, I think what you are seeing is, you have 
seen the renaissance, especially along the Gulf Coast. I mean, 
if you look at what has happened in Lake Charles and along the 
river corridor in New Orleans, and Baton Rouge, you are now 
seeing in the Pennsylvania, Ohio, and West Virginia area where 
things were historically just done along the Gulf Coast have 
now moved to the upper Midwest. And I think that, you know, the 
Gulf Coast has benefited for years; I think, as you are seeing 
now, the upper Midwest is going to benefit equally.
    Mr. Johnson. Watch out, New Orleans. Here we come. I yield 
back. Thank you.
    Mr. Rush. The gentleman yields back. The Chair now 
recognizes Ms. Barragan for 5 minutes.
    Ms. Barragan. Thank you. I want to thank the panelists for 
being here today and talking about this issue. Climate change 
is an issue that has been very important to me.
    I want to do a little survey. Can you raise your hand on 
the panel if you agree with the scientific consensus that 
climate change is primarily driven by human activity? OK, we 
have got three. Now let's--I am going to ask the three of you 
to keep your hands up, if you believe that the FERC should use 
NEPA or the National Environmental Policy Act to analyze the 
climate impacts of pipeline projects as part of its 
determination of whether a project is or is not in the public 
interest. Keep your hands up.
    OK, so now we have--we still have three of four. In my 
view, I think it is basic common sense that, at a minimum, if 
we want to reduce climate emissions, we need to evaluate 
further infrastructure projects for their climate impact; 
otherwise I think we are flying blind.
    Ms. LaFleur, can you please explain why evaluating climate 
impacts are common sense and how we can ensure FERC does 
climate impact analysis?
    Ms. LaFleur. Well, the National Environmental Policy Act 
requires FERC, because FERC is the lead agency for pipelines, 
to look at direct, indirect, cumulative environmental impacts, 
and it is clear to me, and the courts have said, that climate 
impacts whether it is from methane emissions from the pipelines 
or downstream emissions are an impact of the pipeline, so it 
has to be evaluated and disclosed as part of NEPA.
    I also believe that as part of public interest, that has to 
be weighed, weighed with some of the benefits of pipelines we 
have heard about and has to be weighed and balanced. How can we 
make FERC do it, I think either a court order or legislation is 
the only way to make FERC do it or a different set of 
Commissioners on FERC over time. I don't think FERC is inclined 
to do it right now, and that is the honest belief of the 
Commissioner that are making those decisions.
    Ms. Barragan. All right, thank you.
    Dr. Tierney, the Trump administration's recent proposed 
rule to gut NEPA includes a provision that says the analysis of 
cumulative effects is not required. Would this proposed 
regulatory language direct agencies not to consider climate 
change when reviewing gas pipelines?
    Ms. Tierney. I would interpret that, as a former 
administrative official I would interpret that as a direction, 
but it would certainly provide an excuse for any agency that 
didn't want to move in that direction as well.
    Ms. Barragan. Taking it one step further, would be removing 
the consideration of cumulative effects also mean that an 
agency reviewing the impact of a proposed gas pipeline through 
a community of color would not have to account for the existing 
environmental justice challenges in that community?
    Ms. Tierney. I would agree with what you said. Yes, I think 
that would be the case.
    Ms. Barragan. Great. Well, you know, I represent a district 
that is one of the most heavily polluted districts in this 
country, which includes the Port of L. A. And there are only 
four districts in California that are poorer than my district, 
and oftentimes it feels like people come to our communities 
because they think the community won't stand up because they 
can't or because they are working two jobs.
    And so, you know, the climate is a real issue and a crisis, 
which is why our committee is working to going a hundred 
percent by 2050. Thank you all for your work. With that, I 
yield back.
    Mr. Rush. The gentle lady yields back. The Chair now 
recognizes Mr. Long--Mr. Olson. Mr. Olson.
    Mr. Olson. I thank the Chair and welcome to our four 
witnesses. A special howdy to Michael McMahon from my hometown 
of Sugarland, Texas. You all should know Texans love bigger. 
Bigger is better. And our hometown is the biggest town in the 
most populated congressional district in the country, 
Sugarland, Texas, in Fort Bend County. We are also the most 
diverse county in America. So, my friend, bigger is better. 
Feel free to brag about our state.
    Mr. McMahon. Thank you, Congressman.
    Mr. Olson. And now, let's brag about our energy. As you 
know, the shale revolution started in Texas with the Barnett 
Shale play, and expanded to Permian Basin, Eagle Ford, and all 
over the country. My question is, the point is this has been a 
boon for America. It has made our air cleaner. It has created 
hundreds of thousands of good-paying jobs, not just here but 
overseas. It has allowed us to help countries.
    We talk about climate change and global warming; two 
countries that contribute the most that China and India, and I 
am proud to report that last year we signed two agreements with 
India for a total of $10 billion worth of natural gas exports 
to India. I have met Prime Minister Modi many times. He has 
said renewables are our future, but natural gas from America is 
our present. We are making their air cleaner, the world's air 
cleaner, by exporting natural gas to these nations. Thank you 
for that.
    One other, it is kind of light, you probably can't see 
that, but that is an LNG tanker ship coming from Sabine Pass 
going to Estonia.
    [Photo.]
    Mr. Olson. There is a crowd of people, maybe a hundred 
people waving flags as that ship pulls into the dock. You know, 
my friend, if we move the Battleship Texas, we can't get five 
people to watch her move down the Port of Houston. These people 
are there because they know this is their freedom from Russian 
high prices for energy. No more shutdowns over conflicts with 
other countries.
    And so, my point is, this is not just an economic boon for 
America; it is a diplomacy boon, a freedom boon for America. 
Now the problem we are having here in America is getting the 
product we have to the market. You deal with it every single 
day--pipelines, pipelines, pipelines. We all know the safest 
way to transport this product is via pipeline. We also know 
there are all sorts of impediments. For example, Kinder Morgan 
is trying to build a pipeline from the Permian Basin to the 
Houston area to get the ships there. They are being drugged 
down by Austin, Texas, lawsuit after lawsuit after lawsuit.
    You are out there working in the real world. Please tell me 
how lawsuits and stuff are coming down from DC; it is sort of 
subtle. For example, the Keystone XL Pipeline was a bellwether 
for people who wanted to attack pipelines. That pipeline was 
approved three times by the State Department headed by Mrs. 
Clinton twice and Mr. Kerry once, yet President Obama nixed it. 
That one single act got the whole pipeline market attacked by 
these groups to stop transporting these products, again, in the 
safest way possible.
    Can you elaborate on how these things in DC hurt your 
business and how we can streamline them and make it more viable 
without all the uncertainty of lawsuits and protests, et 
cetera, et cetera, et cetera?
    Mr. McMahon. Well, you are right, Keystone was a bellwether 
event in our industry, and the world has changed since then. 
You asked about, you know, what happens when policies are 
changed or take a different direction is, you know, as 
Commissioner LaFleur knows because I was in talking to her 
about two or three weeks later, is when FERC announces change 
in policy concerning the treatment of income tax for master 
limited partners, they announced it on a Wednesday or a 
Thursday, I am sorry, and by the following Friday, you know, 
nine of the largest pipeline companies that were publicly 
traded, including us, lost $15 billion in market value in that 
timeframe. So, action----
    Mr. Olson. Fifteen billion dollars just like that, snap off 
a finger.
    Mr. McMahon. So it goes back to what I have been saying all 
day long is when you change stability and predictability and 
make us a more risky business, the markets react very badly. 
And that is the concern we have any time you make major shifts 
that affect our revenue streams.
    Mr. Olson. One question about FERC, and maybe you want to 
answer this, Ms. LaFleur, as well. We worked hard to get them 
an office in Houston. That is coming online. How will that 
impact your business and all the people around the area with a 
FERC office right there in Houston, Texas, pipeline central, 
port central, et cetera, et cetera?
    Ms. LaFleur. I think the primary advantage of the Houston 
office is that with the growth of LNG facilities, it has been 
hard for FERC to hire enough of the kind of engineers that do 
the review of LNG facilities. And, guess what, there is a lot 
more of them in Houston than there are in Washington, DC. And 
so, by having an office in Houston, FERC will be able to access 
that job market. I believe that is the I mean I discussed it 
when I was there, so that is part of the plan.
    Mr. Olson. And one final question. Mr. Doyle and I have a 
bill that allows FERC to charge higher salaries like they did 
with the FEC. They had some issues there with the--not the FEC, 
but the SEC in New York; all the expertise gets hired away. The 
big guys who told me, we hired the FERC guys because they had 
expertise. Is this going to be able to give you guys more 
authority to raise salaries for special employees?
    Ms. LaFleur. I supported the proposal that came out, which 
I believe was just for certain kinds of engineers. I actually 
think, and I am no longer have anything to do with FERC, there 
is an inequity, because as the energy work has become more 
complicated other agencies like the Commodity Futures Trading 
Commission, the SEC, they get a higher pay grade for each level 
because their work is considered more complicated in some way.
    But I think FERC is right up there in complexity, so I 
would do it not just for the engineers but the financial people 
too.
    Mr. Olson. I am out of time. Go, Sugarland Skeeters.
    Mr. Rush. The gentleman yields back. The Chair now 
recognizes Mr. Schrader for 5 minutes.
    Mr. Schrader. Thank you, Mr. Chairman. I appreciate it. I 
guess, Mr. McMahon, why was natural gas excluded from the 1988 
FPA amendments?
    Mr. McMahon. My remembrance of that history was you saw the 
natural gas industry was becoming to be moving from a bundle to 
a transportation that started in 1985. It finished in 1992. I 
know of no causal link between what was happening in the gas 
industry, but I also know that what was happening in the 
electric industry is that was at a time when electrics were 
true monopoly providers and they had a bundled commodity and 
transportation. And the concern was people had no recourse when 
the price spiked and that was the primary reason for the change 
in 2006.
    Mr. Schrader. Ms. McMahon, would you agree with that or do 
you have a different take or whatever? Or excuse me, Ms. 
LaFleur?
    Ms. LaFleur. I think that part of the reason was that at 
that time, gas companies, and gas pipelines had to come in 
every three years to get their rates looked at, so they thought 
they didn't need this refund authority because they would be 
looked at regularly anyway, something FERC did away with 
decades ago.
    And I think both gas and electricity have changed a lot in 
the last 30 years, but in my mind, they are both imbued with a 
public necessity. The reason you can build a pipeline is 
because FERC says it is in the public necessity. That is why 
you can get the eminent domain. And so, part of that public 
necessity, I think, is making sure the rates are just and 
reasonable.
    Mr. Schrader. Mr. Tierney, would you comment a little bit 
on public necessity? You indicated, I think, in your testimony, 
it is pretty much a done deal as long as you have a buyer or 
purchaser out there. What about the cost-benefit analysis? 
Should that also be, given all the pipelines and the 
controversy we have heard today about building different 
pipelines in relatively the same area?
    Ms. Tierney. Yes. I really think that in order for FERC to 
restore credibility in its decisions and to ensure that the 
public interest rather than the private interests of two 
counterparties in a precedent agreement that FERC really does 
need to look at benefits and costs as part of its need 
analysis, and there are many things that could go into that.
    There are many--we have heard today about many of the 
benefits of access to natural gas, but there certainly are 
costs and many of those costs are shifted to people who aren't 
benefiting from natural gas: landowners who value their land at 
a price higher than the market price and would like to keep 
their farm, for example. I could on and on, but there are many 
different elements of benefit-cost analysis that I think would 
provide a better direct case for the public interest findings.
    Mr. Schrader. So, Mr. McMahon, would you comment on that? 
Agree, disagree, and why?
    Mr. McMahon. Well, I think that the--I don't really 
disagree with a lot with what Dr. Tierney said, but I think the 
challenge you have is when it comes to landowners is a true 
challenge is to get a pipeline from point A to point B, you are 
going to cross landowners and each landowner you cross may or 
may not view it as of being any value. That is the challenge of 
the industry, and we understand.
    And I think if you look at the number or reroutes you see 
on a pipeline between the time it is proposed and the time it 
is actually constructed, it demonstrates that we are taking 
those concerns. But eventually, you have to go from point A to 
point B. And as I said earlier, as I said we are working on 
getting better with landowners. We still have a ways to go, 
but, you know, there is going to be somebody that is going to 
have a valid objection to your presence and that is something I 
haven't quite figured out how----
    Mr. Schrader. So, I guess we desperately need another 
pipeline out in the Pacific Northwest, where I am from. We have 
one and we would like to have some redundancy there. Why not 
build it in the right of way? There are existing rights of way 
and highways. Why not--it is going to be more circuitous; I get 
that. But at the end of the day, you have more, I would assume 
more certainty you are going to get it done without all the 
legal, the lawsuits and all that.
    Mr. McMahon. We try to use existing pipeline corridors. We 
try to use existing power corridors. Sometimes you will see us 
co-locate with water pipelines, but we try to co-locate 
wherever possible. You know, the engineers would love to take 
the most, you know, straight route, but that is just not 
doable. So, we try and, you know, I think a lot of our 
projects, and Commissioner LaFleur, I think will, I think this 
is a fair number is between 50 and 80 percent of almost every 
pipeline being about co-located.
     Ms. LaFleur. That sounds essentially right. A lot of it is 
co-located. It is the places that it is not where it is really 
more difficult.
    Mr. McMahon. Yes.
    Mr. Schrader. Seems like a way to avoid some controversy 
when possible. Thank you very much and I yield back, Mr. Chair.
    Mr. Rush. The gentleman yields back and the Chair now 
recognizes the gentleman from North Carolina, Mr. Butterfield, 
for 5 minutes.
    Mr. Butterfield. Thank you very much, Chairman Rush, and 
thank you again to the witnesses.
    There has been a lot of discussion about the need to reform 
Section 5 of the Natural Gas Act. To achieve this, last week, 
along with Congressman Billy Long, we introduced H.R. 5718, the 
Protecting Natural Gas Consumers from Overcharges Act. The bill 
is very simple in our opinion. It amends Section 5 by taking 
the exact same language from 206, Section 206, to give FERC 
identical refund authority for natural gas and electricity.
    So I will begin with Ms. LaFleur. The bill that Congressman 
Long and I introduced gives natural gas customers would give 
natural gas customers the same rate protections that electric 
customers currently have under the FPA. Judging by your opening 
statement, you would agree it seems that amending Section 5 
with mirrored language from Section 206 would put natural gas 
customers on a more level playing field for the rates that they 
pay as compared to the rate protections electric customers 
currently enjoy. Am I on track with this?
    Ms. LaFleur. Yes. And I also think it would place them on a 
more level playing field with the pipelines because there is an 
asymmetry now between the leverage that the pipelines have. 
That is why pipelines, at times, threaten to file a Section 4 
if somebody brings a Section 5 against them because there is an 
asymmetry of power and I think it should be level.
    Mr. Butterfield. You also mention in your opening statement 
that the refund authority in Section 206 enables FERC to 
require almost every electric company to promptly pass along 
cost savings from the reduction in the corporate tax rate 
contained in the Tax Cuts and Jobs Act to the electric 
customers. Did natural gas customers have the same experience?
    Ms. LaFleur. No, it took much longer because FERC can't 
order a natural gas pipeline to file a rate case. That is not 
the authority FERC has. So FERC had to go in a very roundabout 
way to make gas customers file the financial information that 
FERC could use and then, ultimately, 30 percent reduce their 
rates, over by usually more than a year, 18 months later.
    Mr. Butterfield. According to the Congressional Research 
Service, which is a part of this institution that all of us 
rely on very heavily, only one Section 5 rate case has been 
filed by a third party since 2009.
    Mr. Worsinger and Ms. LaFleur, can you explain why a third 
party may be hesitant to file a Section 5 rate case?
    Mr. Worsinger?
    Mr. Worsinger. Congressman, I believe that is because of 
how cost-prohibitive it is to take that case forward. In our 
case in the city of Wilson, we would spend more on that Section 
5 filing with attorneys than what it costs us for the 
transportation of our annual natural gas supply.
    Mr. Butterfield. So it is an economic consideration that 
you have to----
    Mr. Worsinger. That is correct.
    Mr. Butterfield. Would you agree or disagree, Ms. LaFleur?
    Ms. LaFleur. I think the cost is a big issue. I have heard 
anecdotally some small customers are afraid to file because the 
leverage that the pipelines have over them. And I also think 
since 2009, FERC has every year gone through and looked at 
pipeline rates. So, rather than spending the money to file, the 
customers come into FERC and lobby for FERC to file, which it 
sometimes does.
    Mr. Butterfield. Thank you. My last question is back to Mr. 
Worsinger. Mr. Worsinger, natural gas prices are low right now 
and will continue to be for the foreseeable future; fingers 
crossed. Will amending Section 5 to give FERC refund authority 
actually, actually, actually make a difference for the people 
that you and I care about?
    Mr. Worsinger. Yes, Congressman, I believe it will. The 
Natural Gas Supply Association puts out an annual study based 
on pipeline data that has been submitted to FERC. The last 
study they issued looked at the years 2013 to 2017. They 
examined the FERC data for 32 pipelines and found 21 of those 
pipelines were over-collecting; the 5-year period that was $4.6 
billion. That is a billion with a B. That to me, sir, is real 
money.
    Mr. Butterfield. Thank you.
    All right, I give you back 30 seconds, Mr. Chairman.
    Mr. Rush. The Chair appreciates that.
    Mr. Butterfield. Thank you.
    Mr. Rush. The Chair now recognizes my friend from the great 
state of New York, Mr. Tonko, for 5 minutes.
    Mr. Tonko. Thank you, Mr. Chair, and welcome to all of our 
witnesses. Certainly, it is an important hearing and it is 
great to have your input.
    Public interest determinations are supposed to look at the 
costs and the benefits of each project, and so, Chair LaFleur, 
can you help us understand the outcome of the Sabal Trail case 
more specifically? What does it mean that FERC must consider 
the downstream greenhouse gas emissions in projects?
    Ms. LaFleur. The issue in the Sabal Trail case was whether 
FERC had properly done its environmental review and its public 
interest review, and in particular, whether FERC was required 
to look not just at the direct impacts like of the construction 
of the pipeline, but at the indirect impacts of the gas. 
Because why do you move gas? There are only two reasons. One is 
to burn it, either in a power plant or in an end use, and the 
second is to use it in an industrial process to make something. 
There is no other reason to move gas.
    So the court said, resolving something that had been in 
dispute for a long time, that if a pipeline was built to move 
gas, FERC had to consider the environmental impacts at the end 
of the pipeline as well as the direct ones.
    Mr. Tonko. Thank you very much. And during your time at 
FERC and since then, do you believe that the Commission has 
adequately addressed these given considerations?
    Ms. LaFleur. There have been disputes about how Sabal Trail 
should be interpreted. Some Commissioners read it very narrowly 
to cover a case where there was a specific single-purpose 
pipeline just to one power plant, but not other pipelines that 
were also transporting gas to be burned. I was of the view that 
it covered other situations, but there was a--we will say, a 
legitimate disagreement as to what it covered. But I don't 
think--I start dissenting or doing my own separate statement 
where I did the greenhouse gas computation myself, which that 
should scare everyone--the lawyer is doing that because I 
didn't think FERC was doing it right.
    Mr. Tonko. Well, thank you. And I believe some 
Commissioners have suggested that FERC isn't able to conduct 
this analysis, and yet as you shared with us, it was very 
interesting in your testimony that you said you did your own 
GHG impact analysis.
    Ms. LaFleur. Yes.
    Mr. Tonko. So, bold attempt.
    Ms. LaFleur. If I could do it, then, yes.
    Mr. Tonko. Can you give us a sense of what you did and why 
you believe it was important?
    Ms. LaFleur. Well, I felt at a minimum, after Sabal Trail, 
at a very minimum we had to disclose and consider the GHGs. 
What I did was try to get as much information from the record, 
which the wonderful FERC staff would extract, and my own staff, 
of how much gas was going to go through, and I would make 
simplifying assumptions. Like if there was no evidence of what 
the gas would be used for, as a tie-in measure, I do a full 
burn. Imagine the pipeline was full every day; how much gas 
would it transmit, and if you burned it, what would it put out, 
and then calculated it by EPA standard, GHG per ton.
    But if you did it more carefully in a new process, you 
could get real information on how much is the pipeline going to 
be used; what it will be used for; what will it replace. If it 
is replacing coal, you would deduct those coal emissions from 
the ones that you calculated or deduct the gas from the coal, 
so you could do it much more precisely than I did.
    Mr. Tonko. So do you believe that FERC can do what you did 
and does the capability exist to do an even more robust----
    Ms. LaFleur. FERC could definitely do the math and do it 
more robustly than I did. The hard part is then, so you get 
that number; what do you balance it with? And that is where 
FERC would have to do more work than it does now to get the 
benefits in the need for the pipeline.
    Mr. Tonko. Thank you. And would this require using the 
social cost of carbon, or are there other metrics that could be 
utilized to inform a public interest determination?
    Ms. LaFleur. I believe FERC could use the social cost of 
carbon because that is the most available metric, the most 
available metric for measuring what the impact of the 
greenhouse gases is. But I think if FERC did a docket, other 
people might propose other ideas. I don't think that is the end 
of the story. But there would have to be some way to do 
something predictable and quantifiable.
    Mr. Tonko. Thank you. And, Madam Chair, you supported some 
projects after doing your analysis, so I am assuming you don't 
believe there should be no new projects under any 
circumstances, but rather recognize that the law requires 
climate impacts to be given proper consideration. Is that an 
accurate assessment?
    Ms. LaFleur. Yes, that is exactly what I believe. I am not 
against pipelines and I also think even that LNG export can be 
a part of a global climate strategy, but it has to be 
considered carefully. Not just either all approved, as Dr. 
Tierney said, or none approved. There has got to be a way--this 
is FERC's job to figure out which ones are good.
    Mr. Tonko. Well, I agree, and I believe FERC should do a 
much more robust public interest determination on several 
factors, but at the very least, consideration of climate 
impacts certainly is clearly required by the law right now. I 
thank you for that. And with that, Mr. Chair, I yield back.
    Mr. Rush. The gentleman yields back. Now the Chair 
recognizes the lady from the state where the center of the 
attention of our democracy is focused on, the great state of 
New Hampshire. Ms. Kuster is recognized for 5 minutes.
    Ms. Kuster. Thank you very much, Chairman Rush and Ranking 
Member Upton, for holding this important hearing.
    As we heard from our witnesses, my colleagues in Congress 
have a clear obligation to bring the Natural Gas Act into the 
21st century and ensure that the Federal Energy Regulatory 
Commission acts in a fair manner. But fairness is truly the key 
word because right now, the vetting process at FERC for natural 
gas pipeline permitting is not fair to those who oppose or even 
have concerns about pipeline projects.
    Many of my constituents discovered this harsh reality 
several years ago when a pipeline project cut an indiscriminate 
path through my district. Property owners who stood to lose 
their land felt that their voices had not been heard. That 
pipeline would have cut through 39 parcels of conservation land 
in 15 different towns in southern New Hampshire. These 
communities worked hard and invested significant resources to 
make sure that these lands were preserved because they 
recognized the tremendous importance of the land region's 
environment, and suddenly it was in danger of being taken away.
    That experience is part of the reason why I introduced the 
Protecting Our Conserved Lands Act last year. My bill would 
prohibit gas pipeline companies from using eminent domain to 
take land that is being permanently conserved by local 
governments or nonprofits. For these entities, often the only 
hope they have of their land being saved in the face of a 
pipeline is the environmental reviews under the National 
Environmental Policy Act, and they might not even have that 
anymore given that the Trump administration's new proposed 
rules will gut that process. My bill doesn't rule out pipeline 
construction, but rather compels pipeline companies to work 
with local stakeholders to find reasonable alternative 
solutions. So a question for Susan Tierney.
    Dr. Tierney, you noted in your testimony that in the last 
two decades, FERC has approved 487 natural gas pipeline 
projects and rejected only two. Given this dramatic disparity, 
could you speak to the importance of taking public input 
seriously during the approval process, particularly given the 
implications for those who will be impacted by eminent domain?
    Ms. Tierney. Thank you for that question, Congresswoman. 
One of the reasons why I think it is so essential that FERC 
does a better job of looking at the public interest test and go 
beyond the existence of a precedent agreement as an indicator 
that a pipeline approval would be in the public interest is 
that the conveyance of a certificate approving a pipeline 
enables a pipeline to go and use eminent domain, attempt to use 
eminent domain. If you can't determine that a project is truly 
in the public interest, then effectively, you are going to 
enable the taking of land for private interests. That is really 
challenging for conservation land, in particular, that is 
already set aside for the public interest, so that is really 
attention. But even the taking of private property for a 
private purpose, I thought that was unconstitutional. So, I 
would encourage an indication from Congress that FERC really 
needs to do a better job of upholding the public interest 
standard.
    Ms. Kuster. Well, another characteristic of New Hampshire, 
in addition to the first in the nation presidential primary, is 
a proud heritage of respecting private landowner rights. The 
proliferation of gas pipeline expansion has thrust the 
following question into the foreground: What is more important, 
building more fossil fuel pipelines or respecting the 
individual property rights of landowners? So do you have an 
opinion?
    Ms. Tierney. I do. And I lived next to your state for 35 
years, so I appreciate New Hampshire's beauty and its 
feistiness. I will put it that way. I think that it is 
essential to be looking at these various public interest issues 
as part of the whole calculation of whether or not a pipeline 
is needed.
    In New England, in particular, every state has a goal of 
reducing greenhouse gas emissions, so the additions of new 
pipes should be looked upon with some concern about whether or 
not that is going to lead to stranded costs, whether that is an 
overbuild situation for the long term, and if my land were 
being taken for something that ended up not being needed, I 
would be pretty mad.
    Ms. Kuster. Thank you. I appreciate that. I think FERC does 
not have a fair process now, but we can take a holistic 
approach and I am excited to work with my colleagues to get 
this done. I yield back. Thank you, Mr. Chair.
    Mr. Rush. The gentle lady yields back. The Chair now 
recognizes Mr. Bucshon for 5 minutes.
    Mr. Bucshon. Thank you, Mr. Chairman.
    Mr. McMahon, can you specifically discuss how does the 
electrical market differ from the natural gas market and is 
there a chance that it would increase overall costs for both 
pipeline companies and consumers to create a similar or a 
parity situation between the two industries?
    Mr. McMahon. Yes. The electric market is if you go back in 
time is not nearly as competitive as the natural gas market. 
Our pipelines are competing with each other and our customers 
to move capacity. The basic structure and the way, you know, we 
have been--we have been unbundled for a number of years. 
Electrics have just gotten there relatively in time. But I 
think the biggest thing that is concerning for us and the 
reason that it would lead to increased costs is the retroactive 
nature of the relief when we have been following our just and 
reasonable rates.
    And, you know, I have heard twice today about the tax 
increases and not passing through, and I just want to remind 
the committee that FERC has had a longstanding practice where 
it comes to gas pipelines that interstate pipelines are not 
allowed to engage in single ratemaking issues, so if the tax 
rate goes up we can't say our rate should automatically go up 
without taking a look at all of our costs. The same thing 
should work on the downside.
    Mr. Bucshon. OK. Can you walk me through the process you 
take to resolve right-of-way easement issues without the use of 
eminent domain?
    Mr. McMahon. Yes. When we start a project, and this has 
been an iterative process over the years, but, and I am 
speaking broadly for the entirety of the membership, most of 
the right-of-way acquisition starts about the time the 
application is filed with FERC. We start meeting with 
landowners and going through preliminary routes.
    At that time, if we have actually filed our application at 
FERC, we have had probably one to three town halls depending on 
the length of the project. We have met with--we have shown the 
route, and we have met with local officials. So we start at 
about the time the application is actually filed negotiating 
with landowners. The INGA group, as I say in my testimony, had 
about a 90 percent success rate of reaching agreements with 
landowners without ever instituting any aspect of an eminent 
domain proceeding. Unfortunately, we have still got some work 
to do to get from 90 percent down to closer to a hundred 
percent, but we start early and we talk often.
    Mr. Bucshon. Yes. I mean, I think that is important public 
engagement for what the necessity of the project is. When you 
create new pipelines, does that exclude the use of that land 
for other purposes?
    Mr. McMahon. No. In most cases, and especially in kind of 
your area where there are a lot of farms, is we will put a 
pipeline in and the farmers are allowed to go ahead and farm 
over the top of the pipeline.
    Mr. Bucshon. How deep do you put your pipelines on average? 
Is it variable?
    Mr. McMahon. It varies, but unless a landowner has made a 
specific request, in most cases, it is between 36 and 48 inches 
deep on a minimum side.
    Mr. Bucshon. OK.
    Mr. McMahon. Sometimes, it is deeper.
    Mr. Bucshon. Because I mean, I think we have created this 
perception that everywhere a pipeline goes, the land is just 
not used and there is just a pipeline there and the land can't 
ever be used again, but that is not necessarily true.
    Mr. McMahon. No, it is not. In some areas, you know, in the 
South, you see a lot of deer stands and stuff that are using 
the pipeline right of way. We have worked with a lot of 
wildlife, you know, National Wild Turkey Foundation and others, 
you know, to use the right of way for actually for wildlife 
revegetation or wildlife uses. So we work with the landowners. 
We understand that we are going to be partners with them for a 
long time. And like I said, in most cases, we are successful in 
reaching an agreement with the landowners.
    Mr. Bucshon. I mean the climate is clearly changing and we 
need to do what we can with technology and innovation to lessen 
our impact on that. I don't think there is anyone that really 
at this point disagrees with that premise. I just think the 
wrong approach would be to say, well, you know, we are going to 
limit infrastructure based solely on that issue.
    And I think there are some people talking about it in the 
public interest. They don't see fossil fuels ever in the public 
interest, and so that is kind of what we are up against as far 
as creating a balanced approach here. And so I would be hopeful 
that we can, whatever solution we come to with this legislation 
that we can, create a balanced approach that takes all of those 
things into consideration. Thank you. I yield.
    Mr. Rush. The gentleman yields back.
    And that concludes our first panel, and I would like to 
thank our witnesses for joining us today on this important 
issue. At this time, I would ask that the staff prepare the 
witness table so that we may begin our second panel shortly.
    And I really want the panel to know you are very much 
appreciated and your testimony has been a source of 
enlightenment to the entire subcommittee. Thank you very much 
and enjoy the rest of your day, and have some lunch.
    [Whereupon, at 12:38 p.m., the subcommittee recessed to 
reconvene at 12:44 p.m., the same day.]
    Mr. Rush. We now will hear from the second panel of 
esteemed witnesses and I will introduce those witnesses from my 
left.
    Ms. Maya van Rossum, the Leader of the Delaware Riverkeeper 
Network; Mr. Gene Barr, who is the President and CEO of the 
Pennsylvania Chamber of Business and Industry; Mr. N. Jonathan 
Peress, the Senior Director of the Energy Markets and Utility 
Regulation for the Environmental Defense Fund; Dr. David 
Mallino, the Legislative and Political Direct of the Laborers 
International Union of North America; Mr. David Bookbinder who 
is the Chief Counsel of the Niskanen Center; and, Ms. Jennifer 
Danis who is the Staff Attorney for the Environmental Law 
Clinic, Columbia University School of Law.
    I want to thank you all for joining us today and we look 
forward to your testimony. And at this time, the Chair will 
recognize Mr. Peress for 5 minutes.

   STATEMENT OF N. JONATHAN PERESS, SENIOR DIRECTOR, ENERGY 
  MARKETS AND UTILITY REGULATION, ENVIRONMENTAL DEFENSE FUND; 
  MAYA VAN ROSSUM, LEADER, DELAWARE RIVERKEEPER NETWORK; GENE 
 BARR, PRESIDENT AND CEO, PENNSYLVANIA CHAMBER OF BUSINESS AND 
 INDUSTRY; DAVID MALLINO, LEGISLATIVE AND POLITICAL DIRECTOR, 
     LABORERS INTERNATIONAL UNION OF NORTH AMERICA; DAVID 
   BOOKBINDER, CHIEF COUNSEL, NISKANEN CENTER; AND, JENNIFER 
   DANIS, STAFF ATTORNEY, ENVIRONMENTAL LAW CLINIC, COLUMBIA 
                    UNIVERSITY SCHOOL OF LAW

                STATEMENT OF N. JONATHAN PERESS

    Mr. Peress. Thank you, Mr. Chairman, for the opportunity to 
appear before you to discuss the implementation of the Natural 
Gas Act. We recognize that natural gas is a major part of the 
energy system and will be for some time to come. To reap the 
full benefits of the nation's gas abundance, we need to 
minimize emissions from the system and use gas efficiently. We 
believe that well-designed energy markets should stimulate 
competition and reward innovation, thereby advancing the public 
interest and beneficial environmental outcomes.
    EDF is not opposed to new pipeline capacity provided it is 
economically justified and based on legitimate market need. To 
achieve that it is essential to have effective regulatory 
review. FERC staff have observed that pipeline capacity 
investments over the past ten years have largely relieved 
natural gas pipeline constraints with a few notable exceptions. 
This suggests that it is not economically rational to add 
additional pipeline capacity at the rate at which we have in 
the recent past, and if such growth continues, it may come at 
the expense of the financial health of the pipeline industry 
and investors as well as the interests of energy ratepayers.
    In recent comments to FERC in its pipeline ROE docket, 
James Murchie, the CEO of one of the largest equity investment 
firms focused on energy infrastructure, stated, ``Building 
unnecessary pipelines is risky to investors and a waste of 
capital.'' Put another way, adding pipeline capacity when it is 
not economically justified diminishes the value of existing 
capacity and investor expectations.
    What we are seeing is a disturbing trend of new pipeline 
capacity being proposed and built outside of rational market 
signals by utilities acting on both sides of the deal, both as 
pipeline developers and pipeline customers. Such utilities are 
forming affiliates to develop pipelines and then signing 
contracts with those developers, obligating their captive 
retail customers to pay for unneeded pipeline capacity to 
benefit their shareholders. This is occurring even when and 
where there is excess pipeline capacity serving the same 
market. To date, a majority of the Commission has been 
unwilling to explore whether there is an actual market need in 
such instances as required by the Natural Gas Act.
    That brings me to the Spire project in Illinois and 
Missouri. FERC approved the project based on a single contract 
between the pipeline developer and its affiliated gas utility 
without rigorous investigation of need and without reasoned 
consideration of information presented by other parties. 
Spire's preapplication solicitation for pipeline customers 
yielded no bona fide market interest.
    The Missouri Public Service Commission opposed the project 
stating that ``Spire's application for a new pipeline does not 
contain sufficient detail reflecting new demand for gas 
capacity.'' Demand in the area is flat or shrinking. Numerous 
parties to the FERC proceeding cautioned that rate increases 
could arise for customers served by existing pipelines if 
contracts were shifted to the Spire project from those existing 
pipelines, which is exactly what occurred.
    These are precisely the types of adverse impacts to 
customers and existing pipelines serving the same market that 
the Commission is compelled to review and mitigate, but that 
are refusing to do so. EDF believes that FERC unlawfully 
approved the Spire pipeline without a sound determination that 
the project is, in fact, needed. We have petitioned the U.S. 
Court of Appeals for the DC Circuit for a review of FERC's 
order approving the Spire project. That is the only FERC 
pipeline approval we have appealed.
    Let me emphasize that unnecessary infrastructure imposes 
real damage to landowners, ratepayers, and the environment. I 
have visited the families and farms impacted by the Spire 
project. When the Commission falls short in undertaking its 
duties in examining the need for additional pipeline 
infrastructure, there are very real consequences to people who 
deserve better. EDF's interest is to ensure that the market 
efficiently channels investment to where it is needed, which 
does not result when FERC fails to meaningfully review the need 
for new pipelines and, in effect, condones anticompetitive 
behavior. By refusing to examine project needs, the Commission 
may well be imposing economic harm on the very pipeline 
industry that they seek to safeguard.
    Thank you for the opportunity to appear before you today. I 
look forward to your questions.
    [The prepared statement of Mr. Peress follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    Mr. Rush. Thank you. The Chair now recognizes in the 
correct order now, Ms. Maya van Rossum for 5 minutes.
    Ms. van Rossum, you are recognized for 5 minutes.

                  STATEMENT OF MAYA van ROSSUM

    Ms. van Rossum. Thank you, Chairman Rush, Ranking Member 
Upton, and members of the committee for giving me the 
opportunity to testify here today.
    In my role serving as the Delaware Riverkeeper, leader of 
the Delaware Riverkeeper Network and founding member of a 
national coalition of organizations battling FERC-regulated 
pipelines, known as VOICES, I have experienced firsthand the 
many ways that the Federal Energy Regulatory Commission has 
abused its authority and the law in order to advance fracked 
gas infrastructure. The Natural Gas Act clearly needs to be 
reformed in order to prevent further FERC abuses.
    Amongst the most essential fixes is an update to FERC's 
mission. FERC's misplaced focus on advancing ``plentiful 
supplies of natural gas at reasonable prices,'' rather than the 
public interest, encourages FERC to misinterpret and misuse the 
law to advance decisions that trample on due process, property, 
and states' rights. FERC's mission must be updated to focus on 
advancing energy sources that are genuinely in the public 
interest, including that of future generations, with a priority 
on advancing clean and renewable energy and making clear that 
environmental rights, people's rights, states' rights, and the 
property rights of the public versus private industry are given 
priority in FERC decision making.
    Amongst FERC's most egregious abuses are the following: 
Using a strategy called tolling orders, FERC routinely puts 
project challengers into a legal limbo that prevents them from 
challenging FERC certifications in court while at the same 
time, FERC allows the pipeline to advance full steam ahead, 
exercising eminent domain and construction including clear-
cutting forest land, blasting through bedrock, and trenching 
through waterways.
    FERC's January 31st pronouncement that it is going to 
prioritize landowner rehearing requests and try to meet a 30-
day review period does not displace the need for Congress to 
act. First, FERC has no credibility on the issue. Second, this 
is just a policy that can be taken away as quickly as it is now 
seemingly being given. Second, non-landowner challenges will 
only be considered ``only when time permits.''
    Some of the most important precedent-setting cases were 
brought by organizations like mine for the benefit of 
landowners and the community as a whole, but we, when we bring 
our challenges, we will now still be subject to tolling. And, 
realistically, this means that forests, wetlands, streams, 
wildlife, and impacted landowners and non-landowning neighbors 
can all continue to suffer grievous harm while we are forced by 
FERC into tolling order limbo.
    FERC continues to refuse to consider the climate-changing 
impacts of pipelines and LNG facilities, including the 
downstream uses, the upstream production, and during the 
transmission of the gas. Fracked gas is a dirty fossil fuel. It 
is a dirty fossil fuel that is having devastating impacts on 
the health, lives, safety, and the environments where it is 
taking place. And it absolutely does impact the way landowners 
can utilize their lands. It impacts the success of businesses 
and agriculture and it impacts the sense of safety and sanctity 
of people living in their own homes.
    By approving or by ignoring the harms of climate change and 
approving unneeded pipelines, FERC is exacerbating and even 
locking in our growing climate crisis and, as such, climate 
change is an essential part of the public interest 
consideration. FERC falsely claims that it has no way to 
consider the climate change impacts of the pipelines that it is 
approving, but this is a ludicrous argument that has been 
repeatedly debunked.
    The social cost of carbon is a proven and available tool. 
FERC routinely undermines states' rights by issuing conditional 
certifications followed by quick approval for eminent domain 
and construction before a pipeline has received state 401 
certification or approvals by other agencies. This undermines 
the ability of states and these other agencies to engage in 
full, fair, and unfettered review and decision-making because, 
frankly, it is harder to deny or modify a pipeline that is 
already half-built. Similarly, and as a result, in a growing 
number of cases, property rights have been taken and 
irreparable construction damage inflicted for a project that 
did not secure all needed approvals and may never be built.
    And just in one final note, I would just like to note that 
the precedent-setting contracts that you heard about earlier 
that are used as a demonstration of need, all too often, 
increasingly, routinely, these are contracts that are made by 
the pipeline companies with their own subsidiaries and 
affiliates. So it is a very clear-cut case of self-dealing in 
trying to prove the need. Thank you.
    [The prepared statement of Ms. van Rossum follows:]
    Mr. Rush. The Chair now recognizes Mr. Barr for 5 minutes.

                     STATEMENT OF GENE BARR

    Mr. Barr. Chair, Ranking Member, and all the Members of the 
committee, thank you very much for allowing me the opportunity 
to participate here today. I am the president and CEO of the 
Pennsylvania Chamber of Business and Industry. My name is Gene 
Barr. The Chamber is the largest broad-based business advocacy 
group in the Commonwealth of Pennsylvania. We have about 10,000 
members and represent roughly 50 percent of the private sector 
workforce. Our members include people who develop energy, move 
energy, sell energy, and obviously use a whole lot of energy as 
well.
    The reality is energy is necessary for economic development 
and many of the members here today have asked questions that 
certainly move directly towards that point and we would 
certainly concur to that. What I would like to do today is talk 
a little bit about what impact natural gas development has had 
in the Commonwealth of Pennsylvania. And it is both ironic as 
well as welcomed that Pennsylvania, which was the home of the 
petroleum industry in the United States beginning in 1859, has 
now basically come full circle. We are now number two in 
natural gas production in the United States and, with all due 
respect with some of the honorable members of the committee 
here from Texas, we would really like to be number one. We are 
going to be working on that one, so we are going to keep 
trying.
    We also have the number one natural gas-producing county in 
the United States, Susquehanna, up in the northeast part of the 
Commonwealth right up against the state of New York. A year or 
two ago, Pennsylvania, like many other states, went after the 
Amazon projects pretty hard. Everybody wanted those jobs, well-
paying jobs, and we didn't get it. I mean as in my capacity, I 
was certainly disappointed we did not get Amazon.
    The reality is we have had two Amazons in Pennsylvania. We 
have had a hundred thousand jobs created because of the 
development of natural gas in the Commonwealth of Pennsylvania. 
This has helped us. When you look back to when this began more 
than ten years ago, the jobs that were created, and you will 
hear a little bit later from our colleagues in the labor 
industry, those jobs that were created helped the Commonwealth 
weather the recession that we had and we got through that 
because in many cases of the natural gas industry. It is 
feeding billions of dollars of investment now.
    Shell announced, and you heard it referenced earlier, a 
six- to seven-billion-dollar investment in western Pennsylvania 
for an ethane cracker. We certainly welcome that as well. The 
impact tax on the industry that we created a few years ago has 
given $1.7 billion back to every single county in the 
Commonwealth of Pennsylvania for all kinds of projects, 
including, broadband, recreation, infrastructure, et cetera. 
There have been billions of royalties paid to landowners across 
the Commonwealth.
    And one of the things that isn't talked about a bit and I 
know open space is always a concern. I have talked to farmers 
who have said, hey, I was ready to sell the farm. People 
believe Pennsylvania is Philadelphia and Pittsburgh and that is 
about it. The reality is Pennsylvania is heavily agricultural 
or, in many cases, rural. A lot of the farms that were in 
trouble as many, unfortunately, many agriculture operations are 
in this country, they have had the ability because of royalties 
to save that as open space and to be able to basically take the 
royalties and keep that for their families and to keep that 
open space there. That is significant.
    Talked a little bit today as well about the cost savings. 
Consumers have saved and continue to save roughly about $1,500 
per year per household. That is significant. We also heard 
today a little bit about the air quality improvements, CO2, 
certainly, but what is also called criteria pollutants have all 
declined as a result of increased use of natural gas. It has 
also helped other states too because Pennsylvania is an energy 
exporter, so those electrons that cross the border certainly 
help other states' control as well.
    Interestingly, we have heard today a little bit about the 
polarization and the partisanship. In Pennsylvania, the 
industry is supported by both Republicans and Democrats. One of 
the strongest supporters, of course, has been our current 
Speaker of the House in Pennsylvania, who is a Republican, but 
our Governor, who is a Democrat, strongly supports building out 
the infrastructure. The Democrats in the western part of the 
state particularly have already seen the benefits in terms of 
the Shell facility as well as the other development that is out 
there. The county exec, I just spoke with him yesterday in 
Allegheny, a strong supporter of that. He and I discussed this 
project.
    To be quite blunt, the current problem we have is an 
inability to grow the industry as much as we would like, 
frankly. There is a problem. We have got lower prices. The 
prices have been depressed, that is a result of, unfortunately, 
a lessening to a large degree of investment. We have seen some 
adverse decisions recently. Part of that is related to our own 
success. Some of the wells are more prolific than the companies 
even though they were, but in reality, trying to move that 
product out of the Commonwealth into other areas has become, 
certainly, a problem.
    Mr. Chairman, you referenced pipeline deserts. We would 
like to address those. We think that you hit on one of the real 
problems that we do have. And another thing that was noted was 
the fact that we are bringing Russian natural gas into Boston 
Harbor. To be quite blunt, that shouldn't happen, not with what 
we have in our Commonwealth that is relatively close to New 
England, and bringing it in from a country that does not have 
our environmental standards.
    We are more than happy to send our natural gas up there. We 
are more than happy to send natural gas to other places in the 
world. We believe it is certainly exceptionally clean. We 
believe that it is very much a positive and could contribute in 
many ways economically as well as environmentally. I greatly 
appreciate the opportunity to appear before the subcommittee 
and look forward to your questions. Thank you.
    [The prepared statement of Mr. Barr follows:]

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    Mr. Rush. Thank you.
    The Chair now recognizes Mr. Mallino for 5 minutes.

                   STATEMENT OF DAVID MALLINO

    Mr. Mallino. Thank you, Mr. Chairman. On behalf of the 
Laborers International Union of North America, the men and 
women who dedicate their lives to building this country, I 
would express our gratitude to you and to the ranking member 
for inviting us to testify here today.
    LIUNA is an international union with more than 500,000 
workers in 400 local unions around the United States. We are 
proud to be a leader in the fight to highlight our nation's 
infrastructure needs and to represent the men and women in the 
trenches who can do something about it. LIUNA members build the 
nation's core infrastructure--transportation, water systems, 
and energy networks. We construct sewer systems, dig tunnels, 
assemble renewable energy projects, and build pipelines.
    We strive to work with our employers and industry partners 
to create bipartisan policies that improve opportunities for 
businesses, workers, and consumers. We strive to enact strong 
policies that restore sanity to the way the United States 
produces and distributes energy resources while protecting 
consumers and the environment. During the Great Recession, 
unemployment in the construction sector reached nearly 30 
percent. The good jobs created by the boom in North American 
energy development were literally a lifeline for tens of 
thousands of our members. These are good unionized jobs that 
require a high degree of training and expertise. They pay 
family-sustaining wages with good health insurance benefits and 
will help provide a pension for the workers when they retire. 
LIUNA has been at the forefront of the labor movement in trying 
to forge an energy policy that reduces greenhouse gas 
emissions. We encourage all Members of Congress to put aside 
partisanship and collaborate to truly address the 
infrastructure and climate crises.
    For a construction laborer, the next election is an 
eternity away, but their next paycheck and their next house 
payment are just around the corner. Bitter political fighting 
in Washington is not even a distraction when you are trying to 
make it home safely with a fair day of pay for a hard day of 
work. They don't care about jobs and industries that don't 
exist yet when there is a job in front of them right now, one 
that leaves something behind and actually benefits their 
community and their country.
    I want to stress that LIUNA believes in an all-of-the-above 
approach to energy development. In addition to pipeline 
infrastructure, LIUNA members have built solar plants in the 
California desert and wind farms in the Midwest, and we are 
working on a nuclear facility in Georgia right now. Creating a 
political climate where energy resources are allowed to be 
developed after they are vetted, reviewed, and permitted will 
allow an enormous amount of private investments to create 
millions of new jobs across all sectors of the economy.
    Our nation's natural gas production can fully meet our 
domestic need for natural gas and help supply our allies and 
trading partners abroad, as we have heard several times today. 
However, to take advantage of this abundance, we need to expand 
our energy infrastructure systems to safely, responsibly, and 
efficiently transport natural gas to and consumers. This 
includes additional natural gas gathering, transmission, and 
distribution infrastructure to deliver this energy to power 
plants, manufacturers, and local natural gas utilities and 
consumers.
    Congress should be taking steps to ensure that a public 
policy advances these goals instead of stifling them. It is 
time to develop a rational energy policy that protects both the 
environment, consumers, creates good jobs today, and develops 
new industries that will be a source of jobs in the future. The 
Natural Gas Act establishes a framework that facilitates the 
timely and efficient modernization of energy infrastructure 
needed to connect energy producers and the consumers. LIUNA 
supports a common-sense energy policy, one that replaces 
foreign sources of energy with domestically- produced resources 
that foster domestic job creation instead of funding foreign 
extremists. Our members support incrementally lowering 
emissions, which seems to make more sense than the all-or-
nothing approach embraced by the political extremes. There is 
dignity in work and nobody should be attacked or degraded 
because they seek to earn a living or provide for their 
families.
    In the construction sector, job creation comes from 
investments, sometimes public investments into roads, bridges, 
tunnels, and water systems, sometimes from the private sector 
seeking to serve consumers' needs. The infrastructure buildout 
itself creates opportunities for America's skilled 
tradeworkers. In LIUNA alone, our members have seen work hours 
on transmission pipelines increase from around 10-1/2 million 
hours in 2015 to 22 million hours in 2018, and LIUNA is just 
one of four unions who are signatories to the National Pipeline 
Agreement that covers the unionized work in this sector.
    Our brothers and sisters in the International Union of 
Operating Engineers, United Association of Plumbers and 
Pipefitters, and the International Brotherhood of Teamsters 
have also seen the same amount of work-hour increases. This 
isn't a Republican or a Democratic issue. There isn't a single 
American worker who doesn't want affordable energy, good roads, 
safe bridges, and clean drinking water. Our policymakers should 
work together to achieve these goals. Thank you for the 
opportunity. I look forward to answering any questions, and we 
appreciate being invited to talk here today. Thank you.
    [The prepared statement of Mr. Mallino follows:]

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    Mr. Rush. The Chair thanks the witness, and the Chair now 
recognizes Ms. Danis for--no, I am sorry--Mr. Bookbinder for 5 
minutes. I am sorry.

                 STATEMENT OF DAVID BOOKBINDER

    Mr. Bookbinder. Thank you. Chairman Rush, Ranking Member 
Upton, thank you for inviting me to testify. I am David 
Bookbinder, the chief counsel of Niskanen Center here in 
Washington, DC. And, first, I would like to say Niskanen Center 
is not opposed to natural gas and Niskanen Center is not 
opposed to natural gas pipelines.
    Previously, before joining Niskanen Center, I represented 
natural gas industry interests here in Washington, but building 
pipelines is not just a one-sided deal. On the other side of 
building pipelines are property rights, and that is a very cold 
term. I want to stop using the term,``property rights.'' I want 
to talk about people and their homes and their land and their 
farms to which they have a deep attachment. That is what we are 
dealing with, not something called ``property rights.'' We are 
dealing with people and their land.
    There are a lot of problems with FERC's process. I want to 
briefly touch upon two procedural and one substantive. The 
procedural problems begin with notice. And Representative 
Griffith was talking before about the surprise he felt when he 
learned that a pipeline was coming to his district. Landowners 
have that same surprise when they don't get notice, which 
happens, but the first real problem is they get notice in a 
half-inch stack of paper and buried in there is the fact, 
usually in one sentence, single-spaced, half-inch stack of 
paper, that they have a limited amount of time to intervene in 
FERC's administrative process.
    And that is important, because unless you intervene, you 
can't ask FERC to rehear its decision and you can't go to court 
to challenge FERC's decision. Intervention is critically 
important, yet it is something that landowners don't learn 
about until after the intervention deadline is passed. FERC has 
no regulation establishing a uniform period of intervention. 
They simply pick a date. It is as little as 13 days after 
people get that notice.
    People do not have enough time to understand what all this 
stack of paper means. They don't understand what 
``intervention'' means. And they certainly don't understand 
what it means that they have to get this done in 13 days in an 
extremely confusing matter. For instance, just one example of 
this, in the documents FERC provides, or rather that the 
pipeline company provides, there are three separate sets of 
contradictory instructions as to how to intervene, and it is 
detailed in greater detail in my written testimony.
    The other problem with that initial notice is it is not 
provided by FERC. FERC delegates the entire process of 
providing the constitutionally-required Fifth Amendment due 
process notice. The entire thing is delegated to the pipeline 
company, and pipeline companies are the ones who have the least 
interest in providing adequate notice. And as a matter of fact, 
we have been becoming interested in how they do this and we 
asked FERC.
    We did a FOIA request to FERC; what policies or procedures 
do you have in place to ensure that pipeline companies are 
actually providing this notice to all the landowners? And the 
response was a search of our nonpublic records have indicated 
we have no documents responsive to your request. That is 
astonishing. FERC delegates this task, this critically 
important constitutional task, to the pipeline companies and 
then has zero oversight procedures in place to see that this 
notice is given properly.
    The second procedural problem I wanted to touch upon comes 
at the very other ends of the process. Notice on one end, the 
condemnation procedure on the other. And what has happened is 
that pipeline companies have developed something with the 
acquiescence of courts called a quick take. And essentially 
what it means is they get access to the land, they get to build 
the pipeline, but they don't have to pay compensation until 
years later. And that is fundamentally unfair and runs counter 
to a whole lot of things that we believe in, including the 
whole just compensation issue. But the idea that a company can 
take the land, cut the trees, build the pipeline, and pay you 
for that years later is fundamentally unfair, and this needs to 
be addressed along with the notice issue.
    Lastly, I want to say that I actually want to thank 
Chairman Chatterjee and FERC for taking seriously one landowner 
concern, which Ms. van Rossum touched upon, which are tolling 
orders. And the chairman seems to have taken this to heart, and 
the most recent pipeline decision from the Commission came out 
within the required 30 days and we are appreciative that FERC 
has taken this seriously and is trying to do something about 
it. Thank you.
    [The prepared statement of Mr. Bookbinder follows:]
    Mr. Rush. The Chair thanks the witness.
    The Chair now recognizes Ms. Danis for 5 minutes.

                  STATEMENT OF JENNIFER DANIS

    Ms. Danis. Thank you, Chairman Rush and Ranking Member 
Upton, for the opportunity to testify.
    My clients, New Jersey Conservation Foundation and The 
Watershed Institute, are nonprofit environmental groups that 
have fought for decades to preserve New Jersey land and water. 
The proliferation of unnecessary fossil fuel infrastructure has 
emerged as a significant threat to their core mission and to 
the health and welfare of New Jersey residents.
    While I will discuss the PennEast project specifically; I 
want to call out two major problems with how the Commission 
evaluates pipelines. First, the Commission condones 
condemnation without requiring evidence of public need; and 
second, it does so without knowing whether the project could 
ever be built consistent with the Clean Water Act.
    Since PennEast's inception, lands held by these 
organizations or their members have been in PennEast's 
crosshairs, their ownership threatened by eminent domain, and 
their ecological integrity imperiled by a project purporting to 
satisfy the Gas Act's public need requirement with LDC-
affiliate contracts. Worse, independent energy experts 
demonstrated that PennEast's intended service region has a glut 
of gas capacity. On the coldest day of the bomb cyclone, winter 
of 2018, New Jersey shipped gas out. There was simply too much 
and no shortage of infrastructure.
    New Jersey is not a gas desert. The state ratepayer 
advocate opposed PennEast, likening the certificate to winning 
a lottery ticket, unsupported by public need and actually 
causing public harm. Just last week, the project shape-shifted. 
Calling it an amendment, PennEast proposed an entirely new 
project claiming independent utility, relying on different 
undisclosed contracts, and sending gas to different places. 
This highlights the errant way the Commission administers the 
Gas Act.
    No court has heard the merits of PennEast's original flawed 
route. It may never be built without essential missing federal 
environmental authorizations. PennEast's new submission 
effectively acknowledges that it doesn't need to build in New 
Jersey, but New Jersey lands have been condemned, nonetheless. 
The Commission shouldn't discharge its duties in a manner 
preventing private companies from taking land while also 
insisting that courts have no role in ensuring the Fifth 
Amendment's limitations are respected.
    Congress can fix the Commission's current administration in 
the Gas Act, realigning it with its core purpose of protecting 
the public against excessive corporate power and halting these 
unacceptable practices. All PennEast needed to condemn land was 
a Commission certificate, but it got this by self-dealing, 
showing that its LDC affiliates, the ones that created PennEast 
specifically for this venture, would buy what it was selling, 
self-generated demand for capacity. These LDC affiliates pass 
costs along to ratepayers, while PennEast receives a 14 percent 
rate of return just for building.
    Public need and public interest are entirely absent from 
this equation. Not only did the Commission rely on affiliate 
contracts rather than market data, it skipped another part of a 
critically important constitutionally sufficient public use 
analysis, determining whether a pipeline, even if supported by 
genuine public need, could be built consistent with the 
public's interest in preserving water quality.
    The Commission also punted on PennEast's climate change 
impacts, claiming it has no way to put that on the scale. The 
Commission did prepare an EIS for PennEast, but openly 
sidestepped federal environmental authorizations. PennEast's 
certificate relied on an EIS lacking data for over 60 percent 
of the New Jersey route. Somewhere along the way, the 
Commission decided that certificates lacking required federal 
environmental authorizations satisfied Gas Act's Section 
717f(h)'s public interest standard. Courts found that such 
certificates didn't violate the Clean Water Act because 
everyone understood that they don't authorize construction; 
therefore, they can't hurt water quality. But no court has 
examined whether this kind of a half certificate is a 
constitutionally sufficient for allowing PennEast, who is not 
legally authorized to build this project, to seize land.
    Importantly, to prevent significant water quality damage, 
there is every indication that PennEast could not be built 
along the route it condemned. While the Commission can attach 
post-construction environmental conditions, certificates 
lacking federal environmental authorization should be 
insufficient to trigger condemnation. Landowner harm was 
compounded because nobody could challenge PennEast's 
certificate before condemnation proceeded.
    When we went to court to defend against condemnation, the 
judge--and this happens across the country--considered 
questions regarding Fifth Amendment or the fact that a half 
certificate was not the kind Congress anticipated when enacting 
Section 717f(h) to be impermissible collateral attacks. Despite 
legal impediments to construction, condemnation on 
environmentally significant lands has proceeded.
    The Commission's administration of the Gas Act fails to 
serve the public, contravening the Act's main goal: protecting 
the public interest. The proposed Clean Future Act reform will 
restore this goal, allowing condemnation to proceed only for 
projects that the public actually needs, which can be built 
without destroying water and air quality. Thank you for your 
time.
     [The prepared statement of Ms. Danis follows:]
    Mr. Rush. The Chair thanks all the witnesses. And we have 
concluded the opening statements from the witnesses and now the 
Chair recognizes himself for 5 minutes for the purposes of 
questioning the witnesses.
    Ms. Danis, I was very intrigued by your testimony, and can 
you focus more attention for me on the impact of eminent domain 
use before legal obligations are met and that you kind of 
thoroughly, well, at least you hit upon a lot of those abuses, 
are there any additional abuses that you have in mind?
    Ms. Danis. Thank you for your question, Chairman. I believe 
that two of the primary considerations that have just fallen 
out of Commission practice are ensuring that before the 
Commission condones condemnation by the pipeline applicant that 
a project actually could be built. People's farms should not be 
taken before a state that has the authorization under Section 
401, as we heard this morning, to determine that a project is 
too harmful to water quality and that it can't be built, the 
Commission ought not to authorize condemnations before that 
finding.
    And there are really two reasons for it. One is, the land 
will be taken for a project that may never be legally 
authorized to be built, and the second is that the Commission's 
public interest determination ought to include environmental 
considerations. If a state finds that a project will violate 
water quality and harm its residents and the access to clean 
and safe water, then the Commission, without that information, 
can hardly be said to be making a proper public interest 
determination. It can't determine what it doesn't know, and if 
it doesn't know that, then it can't make a public use finding 
that is constitutionally sufficient.
    Mr. Rush. Ms. van Rossum, do you think that FERC should 
allow preconstruction and construction to proceed prior to 
issuing a rehearing order? And, if you would, in your answer, 
describe the impact that this has on surrounding communities.
    Ms. van Rossum. Thank you for that question. Absolutely. I 
think that the Federal Energy Regulatory Commission should not 
be approving eminent domain authority or construction prior to 
all permits and approvals being granted, and certainly not 
prior to the ability of challengers who are concerned about 
what is happening with a project getting their day in court.
    There are actually multiple pipelines where challengers, 
whether they were landowners or concerned community members 
that were going to be impacted by the devastation to the forest 
lands and the waterways, the environment, and impacts to the 
communities, filed their rehearing requests and then became the 
subject of tolling orders that were in place anywhere from 
seven months to two years. And, in fact, in a number of 
instances, in at least I think it is 21 cases before that 
tolling order was lifted, before the challengers had a chance 
to even file their paperwork in court, the pipelines were 
already fully constructed and starting to operate, so they 
never even got to file their paperwork.
    The numbers are really devastating. Every time somebody 
files a rehearing request in order to be able to bring a 
challenge against a pipeline project, every time they get met 
with a tolling order. And again, those tolling orders are in 
place anywhere from seven months to two years. There is no good 
reason for a tolling order, because when they are finally 
lifted, it is always a denial of the rehearing request.
    Rehearing requests are never granted, right. So that means 
that we know when somebody files for a rehearing request and a 
tolling order are issued, we know that the tolling order is 
going to be denied. What that really means is that the only 
good reason to issue a tolling order is to give the pipeline 
company time to advance their project through eminent domain 
and through construction unfettered by a challenge by anybody. 
That is a tremendous misuse and abuse of authority by the 
Federal Energy Regulatory Commission.
    The tolling order practice should be ended and, in fact, 
the law should be amended to say if there is a tolling order in 
place, no eminent domain, and no construction until the tolling 
order is lifted. We maintain the status quo for everybody. That 
would be fair and equitable.
    Mr. Rush. The Chair's time is up. The Chair now recognizes 
the ranking member.
    Mr. Upton. Yes. I know that I had to step away for a little 
while, so I am going to defer, and I will go at the end of the 
queue, so I will go to Mr. Flores first.
    Mr. Flores. OK. Thank you, Mr. Upton, for doing that and 
thank the panel for joining us today. This has been 
informative.
    Mr. Mallino, I have a couple of questions for you. First of 
all, the background for the first question is this. I 
introduced legislation in the last Congress called the 
Promoting Interagency Coordination for Review of Natural Gas 
Pipelines Act. It passed the House on a bipartisan basis in the 
last Congress, and basically, what it does is it makes FERC the 
lead agency to coordinate all interagency and activities, 
including activities by states and local governments in a 
permitting process so that we have a more reliable and 
consistent pipeline permitting process.
    And so in your view, how do delays and red tape affect the 
work of your members?
    Mr. Mallino. Well, we know that a standard strategy is to 
delay these projects until the companies walk away. And I don't 
want to get into parsing numbers about approval rates and 
everything else, but I can guarantee you there are members of 
ours who have gone to work on projects that have been proposed 
and commitments have been signed for our members where the 
companies have walked away from those projects because the 
approval process and the repeated objections and stalling 
delays and court tactics and everything else have killed those 
projects, so it has been a real problem.
    Mr. Flores. Based on the experience of you and your members 
and your workers, how would you recommend that the permitting 
process be modified?
    Mr. Mallino. You know, I am not a permitting process expert 
in terms of what the process is. I don't practice that kind of 
law. I don't practice any kind of law, even though I have a law 
degree. I know better than to make those mistakes on behalf of 
clients.
    But we would like to see the process streamlined, have some 
concurrent timelines so that you don't have to go through this 
agency and then that agency and then that agency and then that 
agency, and then go to the Governor, and then go back to the 
courts. So, some sort of certainty in the process so you know 
what the timelines are. You give the people a chance to have 
their cases heard, but once a project is permitted, it should 
go forward.
    Mr. Flores. OK, great. Thanks. That is essentially what our 
bill does, and if you do want to take a look at it and give us 
some feedback, that would be great.
    Mr. Mallino. We will.
    Mr. Flores. Also, continuing with you, Mr. Mallino, let me 
give you some background for the second question. As you are 
aware, we have had protesters that have protested at pipeline 
construction sites, either construction sites or finished 
pipelines, and not only have they taken firearms and attempted 
to damage pipelines by shooting at them, but they have also 
attempted to turn valves and so forth.
    I don't think--they call it ``free speech.'' I don't call 
it free speech. I call it terrorism. Fortunately, there have 
been no fatalities or serious injuries from these activities. 
But do you believe that these protests are becoming more 
common?
    Mr. Mallino. I think with the--the Keystone XL Pipeline was 
talked about during the first panel. Those of us who were 
involved in the Keystone XL Pipeline from the very beginning, 
and the laborers were, we had a project labor agreement on 
that. We still have one. When that project is built, change the 
dynamic of the political discourse around these issues. And we 
have actually had workers had to be pulled off of projects 
because of violence and threats of violence in the past while 
local authorities could get things in order. And again, as I 
said in my testimony, nobody should be attacked or denigrated 
for trying to provide for their families.
    Mr. Flores. So your workers actually felt like they were in 
danger because of these----
    Mr. Mallino. We have had companies suspend construction and 
have the workers not report to work until things could calm 
down.
    Mr. Flores. When the last Pipeline Safety Act went through 
in this committee, I added provisions to greatly increase the 
fines, and the criminal penalties for those types of 
activities. Do you think that was an appropriate measure that--
--
    Mr. Mallino. I think, you know, that is a question for you 
guys to deal with. We obviously think vandalism is very serious 
and penalties should be enforced and those crimes should be 
prosecuted.
    Mr. Flores. Do you think there are any other activities 
that Congress should take in this regard to keep our workers 
and our communities safe?
    Mr. Mallino. Oh, I have a whole laundry list for you.
    Mr. Flores. Oh, well, I would like to hear those.
    Mr. Mallino. I will meet with you someday. But no, we need 
to strike a balance here between, you know, the need of the 
consumers, the need, the economic needs. We don't dismiss 
property owners' property rights. Our members use this land. We 
care about environmental stewardship. To just lump us in that 
we are on one side or the other, you know, our union has a lot 
of issues on a lot of different issues and we take a balanced 
approach to all of them and we think that everybody should be a 
little bit more common sense about that.
    Mr. Flores. OK. Thank you for your feedback. And, Mr. 
Upton, thank you for yielding me your time. I yield back the 
balance of my time.
    Mr. Rush. The gentleman yields back. The Chair now 
recognizes Ms. Barragan for 5 minutes.
    Ms. Barragan. Thank you.
    Ms. Danis, in your written testimony, you write that an 
accurate balancing test that prioritizes the public interest is 
critical. It is very important from the testimony we have heard 
today that FERC's application of the Natural Gas Act is out of 
balance. What reforms can be made to the Natural Gas Act to 
ensure that pipeline reviews value our constituents and 
landowners rather than solely corporations?
    Ms. Danis. I think that, as Dr. Tierney testified this 
morning, one of the single biggest problems is skewed market 
signals and manufactured demands, essentially. So a reform 
would be to enact amendments into the statute which the 
Commission, and as we heard this morning is in the 1999 
certificate policy statement, the Commission will not just rely 
on one showing of need and will not just rely on a precedent 
agreement which is a private contract between private parties.
    But in particular, the situation now is exacerbated because 
it is not an arm's length contract. Right now, it is a contract 
between a private company and its affiliate and then the 
situation gets worse. Its affiliate can pass any costs incurred 
along to ratepayers. So, in effect, everyone in my community, 
in your community, is paying for the pipeline company building 
to earn 14 percent rate of return and LDC-affiliate to turn 
back capacity on legacy pipelines and pass the costs along to 
ratepayers. They get hit twice or three times in the process.
    Ms. Barragan. Great, thank you.
    Ms. van Rossum, last fall, my office received a letter from 
your organization signed by over 100 local environmental groups 
calling for hearings into FERC's shortcomings in reducing 
fossil fuel projects and how that is impacting communities 
across the nation. This really resonates with me because 
communities in my district are frontline communities, 
oftentimes black and brown, that are bearing the brunt of the 
nation's reliance on fossil fuels.
    Can you, please speak to the environmental justice issues 
from proposed pipelines that your organization and the 
communities it fights for have encountered?
    Ms. van Rossum. Absolutely. It is a very big concern that 
those with lesser power, those that are minorities, those that 
are from black and brown communities, and from indigenous 
communities, frequently get targeted for highly polluting 
industrial operations, including pipelines, fracked gas 
infrastructure, and LNG export facilities. Also, low-income 
communities get targeted. There needs to absolutely be a reform 
to the process to take into consideration the very important 
environmental justice issues.
    And I would say that many from the coalition that you heard 
from called the VOICES Coalition that my organization, Delaware 
Riverkeeper Network, helps lead, they really would like the 
opportunity to come during an expanded hearing to be able to 
speak with the members of Congress more directly about the 
experiences they are having and the solutions that they have 
identified.
    Ms. Barragan. Great. Your written testimony also speaks to 
the need for Congress to reform FERC's mission to prioritize 
advancing clean energy and retiring rather than expanding 
fossil fuel infrastructure. I am excited by this idea. Can you 
elaborate on it?
    Ms. van Rossum. Yes. So as I testified earlier, FERC is 
very forceful in its assertion that, really, its primary goal 
is about advancing fracked gas infrastructure, about advancing 
pipelines and LNG facilities. And in their day-to-day practice, 
they very frequently, while they will allow people to speak 
about environmental and climate change issues on the record, 
they actually ignore those ramifications and ignore those harms 
in reality in their decisionmaking process, giving priority to 
the misinformation that the pipeline companies present to them 
for decision making.
    So we believe that the mission that is identified in the 
Natural Gas Act for the Federal Energy Regulatory Commission 
needs to be very, very clear with the Commissioners that they 
do need to prioritize environmental justice. They do need to 
prioritize the protection of future generations. They do need 
to ensure that consideration of climate changing impacts and 
environmental impacts are given high priority.
    And they do need to prioritize and say that if there is 
another way to serve the energy needs that are being claimed by 
the pipeline company, for example, clean and renewable energy 
options, that that too needs to be given priority into the 
decisionmaking process and the FERC should be entitled to, and 
in fact should be required to reject fracked gas pipeline 
projects when there is a clean and renewable energy option 
instead.
    Ms. Barragan. Great. Thank you so much. I yield back.
    Mr. Rush. The gentle lady yields back. And now the Chair 
recognizes my esteemed friend from the great state of West 
Virginia, Mr. McKinley, for 5 minutes.
    Mr. McKinley. Thank you. And I share that friendship with 
you, thank you. And you have always been fair and these are 
good hearings we have.
    I represents northern West Virginia, north central West 
Virginia, right in the heart of the Marcellus and Utica and the 
operation. And when I go back to the district and I have my 
town hall meetings or roundtable discussions, the school 
boards, the county Commissioners, and individuals can't 
comprehend that Washington would even consider stymieing this 
reformation in our economy in West Virginia, that they would 
stop the pipelines, they would stop the fracking.
    So, I thank you, Ms. van Rossum, and Bookbinder and Danis, 
you helped make my case. Your statements are spot on to show 
that it is true, you are a threat to this economic 
redevelopment of West Virginia, and maybe the country for that 
matter, with your attitude.
    Because, Ms. van Rossum, let me go back to you. You were so 
adamantly opposed to fracking, and fracking has been around 
1860, in the 1840s the hydraulic fracking taking place. We had 
Lisa Jackson come in here in 2011. I remember because I asked 
the question and said, there is no evidence at the EPA that any 
fracking operation has upset someone's water quality. None. 
2011.
    Now, Ms. Danis, you talked about there is excess gas. Come 
to West Virginia, then. We have had gas-fired power plant that 
had to shut down during the polar vortex in 2014 because they 
couldn't get gas. They couldn't get pipelines constructed 
because of people like Bookbinder and others that are 
supporting the idea of banning and stopping crossing properties 
to get this pipeline.
    So I thank you for your three testimonies. You have helped 
make my case, so I can take that back to my--when I go back to 
my roundtables again to show it is a true disaster headed 
towards us.
    So let me turn to Mallino, if I could, with you, since you 
and I came up through the building trades, I before you.
    Mr. Mallino. You, a little bit. But I went to school in 
your congressional district, so we are even.
    Mr. McKinley. That is right. I would like to understand for 
the impact on the economy and our workers, our operating 
engineers, our laborers, and all the people that are involved 
in it, what has been the economic impact of stopping the 
Atlantic Coast, because we want to ship that gas down to North 
Carolina. They could use it and burn it cleaner than they are 
with coal. But he is stopped from doing that.
    So the Atlantic Coast Pipeline, the Mountain Valley 
Pipeline, show me what has been the impact of that?
    Mr. Mallino. I mean, just to take West Virginia, for 
example, a laborer on one of those pipelines in West Virginia 
or any pipeline in West Virginia will make about a 30-dollar an 
hour on the check wage. There are almost another 20 in fringe 
benefits--pensions, healthcare, and associated fringe benefits.
    So, every time those workers aren't working, that money, 
they either have to try to find something else, if there is 
something else out there, and we watched, you know, during the 
Great Recession that these jobs were the jobs that brought 
western Pennsylvania, central Pennsylvania, West Virginia, 
Ohio, brought these workers back into the economy, and without 
them, they would have been unemployed and they would have 
either had to leave the industry, leave the state, go find 
something else. They were absolutely essential jobs and they 
are essential jobs to these workers.
    Mr. McKinley. David, do you have anything to show the 
delays on the Atlantic Coast Pipeline; how much money has been 
sitting on the table as a result of that?
    Mr. Mallino. I don't have that handy, Congressman. I would 
have to go back and take a look and we would probably pull some 
data. But, you know, again it is hard on those workers because 
they want to work.
    Mr. McKinley. How about the last question then, in the time 
that I have remaining. Often, they will say to our industry, 
because I started in the construction industry in '65, ``These 
are all temporary jobs.''
    Mr. Mallino. Right.
    Mr. McKinley. How do you react to when people talk about 
our careers; they are nothing but temporary jobs?
    Mr. Mallino. Particularly within the unionized sector, 
which you are familiar with, you know, these temporary jobs 
help you earn a pension. I don't know many temporary jobs that 
provide you with a pension. They provide you with a good, 
middle-class living. I don't know many temporary jobs that 
provide you for the course of your career, 20 or 30 years, a 
career. Temporary jobs aren't careers. Construction is a 
career.
    One of my colleagues here in the room often states that he 
has a member who is retired from his temporary jobs, you know, 
25 years of temporary jobs. And, you know, these are private 
investments. This is not the Federal Government having to 
figure out how to pay for highways or bridges. This is a 
private investment. These are private jobs that aren't reliant 
on federal spending and they are very important to our members.
    Mr. McKinley. Thank you.
    Mr. Mallino. Thank you.
    Mr. McKinley. My time has expired. I yield back.
    Mr. Rush. The gentleman yields back. The Chair now 
recognizes Mr. Peters for 5 minutes.
    Mr. Peters. Thank you, Mr. Chairman. Thanks for the 
witnesses. I had to be away a little bit, but I did have some 
questions to start with Ms. Danis--is that? So I read your 
information and, you know, put aside for a second whether the 
use of the natural gas authority under this act is the right 
way to regulate the industry as a whole.
    What I talked about at the first panel was an idea about 
whether you could condition the approval of a pipeline on 
something like methane capture, in other words, to meet the 
benefit to the public test. Did you have any thoughts on that?
    Ms. Danis. Yes. And I think this goes to a point that was 
raised by the last question. The Natural Gas Act provides that 
the Commission makes a case-by-case determination about each 
project. If all pipelines were in the public interest, we 
wouldn't have certificates. And Section 717f(e) specifically 
provides that unless a project is in the public interest, in 
fact, required by the public interest, it shall be denied. And 
it gives the Commission broad authority to attach conditions to 
the certificate to ensure that it is in the public interest.
    That conditioning authority has been extensively used by 
the Commission and I see no reason under the law and with the 
vast reservoir of authority that the Commission has that the 
Commission couldn't attach conditions on a certificate to 
employ the best available technology to reduce methane or to 
ultimately weigh a project, the economics versus the 
environmental harm, to determine that that particular project 
doesn't measure up and doesn't serve the public.
    Mr. Peters. OK. To me that would be one constructive way to 
talk about it, although I would expect we would want to have a 
set of standards that we would agree upon in terms of pipeline 
technology and I think it wouldn't be that hard to come to, I 
suppose.
    Mr. Peress, I wanted to say, to also ask you in more 
general terms is, how do you see the definition of natural gas 
as a bridge fuel? So we talk a lot about natural gas as a 
bridge fuel, but no one seems to have designed the bridge and 
some people think it is a lot longer than other people think. 
What is EDF's perspective on that?
    Mr. Peress. So in the first instance, I think market 
participants and those that invest capital have the biggest dog 
in that hunt, so to speak, in how viable their investments are 
in the long run. Pipelines are extremely expensive. But to get 
more specific to your question, one thing that the Commission 
has not been doing is doing a realistic assessment of the 
useful economic, and financial life of these assets when they 
permit them and when they are built.
    The system is designed for them to take evidence on that 
fact, so when you are, for example, building a pipeline that 
serves an end user in a state that has a robust climate law 
that requires reductions, it is probably not rational to assume 
that that pipeline is going to have a 50- or 60-year useful 
life. So ultimately, this question about a bridge fuel is a 
question about looking at the policies that apply to the use of 
natural gas in the jurisdictions in which it will be delivered 
and ultimately allowing investors to weigh those, presuming 
that FERC does what it is supposed to do from a regulatory 
standpoint and weighs those sorts of policies, makes a 
legitimate determination about the public interest considering 
both, you know, state/public welfare requirements.
    Mr. Peters. So I guess in this context then, with the 
Natural Gas Act, your determination of the viability of natural 
gas would be determined by demand according to the state 
regulations to which the gas would be shipped?
    Mr. Peress. In some circumstances, the Commission needs to 
consider in the context of the public interest the public 
policy requirements in the states into which that gas is being 
shipped. So as I said, in a--I mean, New England is a very easy 
example.
    Mr. Peters. Right, yes.
    Mr. Peress. I mean you have a set of states that have very 
robust climate laws.
    Mr. Peters. Right.
    Mr. Peress. And what has been the outcome of that; it has 
not been that people are stopping pipelines from being built 
into New England. It is that investors don't want to risk money 
to build pipelines that they know will not last through a 
meaningful, useful life in dealing with those public policy 
laws.
    Mr. Peters. How does the fact that they are using home 
heating oil in New England factor into the pipeline analysis?
    Mr. Peress. I mean pipelines are very expensive to build. 
What has happened in New England is that it is pure and simple; 
the cost of building pipelines has not been worth the returns 
that investors would pursue. And so, yes, if there was short-
term access to lower-emitting fuels, that would be a good 
thing, but that is not what is going to determine whether 
pipelines get built into New England.
    Mr. Peters. Thank you.
    Mr. Rush. The gentleman yields back. The Chair now 
recognizes Mr. Griffith for 5 minutes.
    Mr. Griffith. Thank you very much, Mr. Chairman. First, I 
would ask for unanimous consent to introduce a letter from 
Karolyn Givens about her experience with the pipeline in our 
area. Not your area, my area.
    Mr. Rush. Seeing no objections, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Griffith. I appreciate that very much. I am not going 
to bore the committee with a recitation of all the things I 
said previously. I appreciate Dr. Bookbinder mentioning some of 
the frustrations that my constituents have felt in his 
statement. We definitely have to have more meetings, and we 
need to find a way that we can respect property owners, the 
people, and the land.
    As I said earlier, one of the folks, and these folks I have 
actually mentioned by name today are here and have been here 
for the whole hearing. These are folks who are invested in the 
land, family land. I know it has got to be true in other parts 
of the country too, but, you know, in my neck of the woods, 
people have been on the land or their families have been on the 
land for 100 or plus, 100-plus years in many cases.
    So the question that comes up is how can we incentivize 
companies to figure out a way to reach a resolution with 
landowners, because while there may be people who just want to 
stop and I recognize that, I don't remember who said it now, 
Mr. Barr or Mr. Mallino, who may want to just stop pipelines at 
all costs, a lot of the folks in my area are just concerned 
that they put it on the wrong part of the farm. If they would 
move it this way or move it that way, or take steps to not, you 
know, when they are putting it in, they would recognize, for 
example, we have karst formation, you know, don't--it may just 
appear to be a shallow cave to you, but it is something that 
the family has been using, going in and out of exploring for 
years. Let's not blow it up. Move it someplace where you don't 
have to break something up.
    Anybody got any ideas on how we can incentivize the process 
so that companies, instead of just coming in and saying, here 
is where we are going, and drawing a line on a map and then 
fighting tooth and nail to make that line work, try to figure 
out ways to accommodate historical, cultural, and topography 
differences that actually might make it better in the long run 
and make the community feel more a part of the process? Anybody 
got any ideas?
    Yes, Mr. Barr. Go ahead.
    Mr. Barr. I will be happy to chime in. I believe it was Mr. 
Mallino who mentioned about some folks who want to block it 
all, and to be honest, there is a lot of that.
    Mr. Griffith. Sure, there is some of that. Yes.
    Mr. Barr. There are people who legitimately don't want 
fossil fuels, period, and see this as an opportunity. I think 
companies, the ones that I have seen when we have had pipeline 
projects in Pennsylvania, are one, particularly who went down 
through the Lancaster, Pennsylvania area. They did meet 
actively with the residents there and they reached certain 
compromises to go around certain areas, certain stands of old 
trees, et cetera. I think they certainly believe it is in their 
best advantage to do that. I believe it expedites the process. 
It helps to move these things along. It helps to do that.
    And I think, I have seen companies do that and do that with 
great effect and help to move their projects along. As we heard 
earlier as well, unfortunately, there were still people who 
wanted to block the--stand on the pipeline, block the 
pipelines, et cetera, and that certainly continues to be an 
issue, and we do see an issue with a lot of the vandalism 
issues in the Commonwealth of Pennsylvania as well.
    Mr. Griffith. Well, and I know you want to get in too, but 
I would just tell you that has not been our experience. And I 
think there was some, just some miscommunication between people 
within the company building one of our pipelines in particular 
or maybe both of them. But I have had too many constituents 
tell me, and in one of my counties, when that board of 
supervisors member called me, it really did look like they had 
just drawn a line on the map. They turned all the conservative 
farmers that had been there for 100 years against them in the 
span of a couple of days just because they weren't talking to 
people. So not everybody does that. We have got to figure out a 
way how to solve that.
    Mr. Peress?
    Mr. Peress. Thank you. The pipeline industry, the pipeline 
developers, are not a monolithic industry.
    Mr. Griffith. I understand that.
    Mr. Peress. And some pipeline developers do a far better 
job than others do.
    Mr. Griffith. And sometimes companies do a better job on 
one project than they do on another. I understand that.
    Mr. Peress. And specifically when I spoke about the Spire 
project, I had been out and visited those farmers and those 
families and those legacies. And the challenge that they have 
had is Spire is not an experienced pipeline developer. They are 
chasing a buck. And so, typically, you see a company like that 
that does a worse job in terms of dealing with landowners and 
landowner rights than some of the other companies that have 
been doing this for years. There need to be minimum standards 
that they cannot be seizing land in advance of being fully 
permitted and reviewed.
    Mr. Griffith. All right. And minimum standards make this--
Dr. Bookbinder, I have about eight seconds. Sorry.
    Mr. Bookbinder. Yes. One of the things I would suggest 
would be there is a federal statute that governs how property 
that the Federal Government is going to take under eminent 
domain: there is a procedure that is used in terms of----
    Mr. Griffith. Can you recommend that for pipelines?
    Mr. Bookbinder. Yes. It should be available to use on 
pipelines.
    Mr. Griffith. I have to yield back. I appreciate it. Thank 
you.
    Mr. Rush. The gentleman yields back. The Chair now 
recognizes the gentleman from Massachusetts, Mr. Kennedy, for 5 
minutes.
    Mr. Kennedy. Thank you, Mr. Chairman. Thank you for holding 
this hearing, and again to the second panel, thank you for 
being here today.
    As I mentioned in my earlier comments, our current energy 
policy is, unfortunately, sidelining communities and landowners 
in favor of industry interests. Back home in Massachusetts, we 
are watching those flaws come to life as a compressor station 
in Weymouth is being built despite the rejection of the local 
community, including an ongoing hunger strike now over a week 
by at least one active and engaged citizen in my district, and 
a recent changed circumstances that reflect significantly 
decreased market demands.
    I have called on Chairman Chatterjee to issue an immediate 
stop work order due to these concerns, and if he is watching, I 
am urgently and not all that is patiently waiting for his 
reply. FERC is allowing the project to move forward without 
reviewing updated information on market needs since precedent 
agreements have fallen through since the time that the project 
was approved.
    Ms. Danis, I am not going to ask you to comment directly on 
the specific project, but I think your experience in PennEast 
is instructive. Up in Massachusetts, many advocates, experts, 
and citizens have gone to extreme measures to ensure that their 
voices are heard. As I mentioned, a hunger strike, nonviolent 
protests, and sit-ins were included. You spoke to this briefly 
in your testimony, but could you outline specific barriers to 
public engagement and how they have impacted the PennEast 
project specifically for landowners?
    Ms. Danis. Thank you, Congressman. For the PennEast 
project, trying to get at that question of what the economics 
are was really a tricky feat. We submitted a FOIA request to 
the Commission and we asked for their economic analysis 
supporting demand for the project and that the project would 
serve the public need. The response letter that I got back 
said, it is the precedent agreements and you already have them. 
That is a significant issue.
    The second significant issue that you referred to is that 
for the PennEast project, while the economics were done in 2015 
and it was unsupported then, it is 2020 now. The world has 
changed. Additional capacity has been broughtonline. I am sure 
that this is happening in other communities. And communities 
are suffering from authorizations that were made at a time and 
in a manner when the economic situation and the proliferation, 
really, the explosion of gas capacity, hadn't happened yet.
    Mr. Kennedy. And so building off of that, I think PennEast 
has proposed a split its proposed pipeline project into two 
separate segments. And so has PennEast demonstrated a need for 
those two separate segments through disclosing updated 
precedent agreements?
    Ms. Danis. No. In fact, in its new filing that happened 
just last week, PennEast has not even named the shippers that 
hold the precedent agreements for the new phase 1. And there 
are precedent agreements that are signed; they state but don't 
disclose for only about 50 percent of the capacity. And given 
the fact that the primary capacity was held by New Jersey LDCs, 
it is difficult to understand how there could be public need 
for New Jersey LDC shippers if those are, in fact, the shippers 
that are holding the contracts.
    Mr. Kennedy. And so you explained earlier that FERC must 
legally consider the environmental impacts of projects as part 
of their public interest determination. Can you talk briefly, 
unfortunately, about what the consequences of the failure to 
meet those obligations are in your community and what it is 
nationwide?
    Ms. Danis. So I kind of break it up into two categories. 
One is the failure to have any Clean Water Act analysis. And in 
the Natural Gas Act, it is very clear, the Natural Gas Act is 
not supreme over other federal environmental laws. The Clean 
Water Act, in fact, has a provision allowing states to preclude 
projects that would significantly damage water quality.
    At the time that the Commission prepared its environmental 
impact statement for the PennEast project, it had no 
information for over 60 percent of the route in New Jersey. It 
is really hard to understand how the Commission could do a 
public interest analysis that weighs the environmental costs of 
the project with absolutely no data on what resources it would 
be harming.
    Mr. Kennedy. And can I ask you for a yes or no on this one? 
In your opinion, should the public interest determination also 
include factors like job, excuse me, potential employment and 
job loss? Potential employment loss or job loss, should that be 
part of a public interest determination?
    Ms. Danis. Loss from failure to construct, you mean?
    Mr. Kennedy. Yes.
    Ms. Danis. I think that the public interest determination 
should consider all economic factors and that is certainly one 
of them.
    Mr. Kennedy. Thank you.
    And, Mr. Mallino, you discussed the importance of American 
labor being at the forefront of reducing greenhouse gas 
emissions and endorsing a comprehensive strategy to combat 
climate change. As our economy transitions towards renewable 
energy in the coming years, how can we best make sure that we 
best work with you to prepare American workers in about 15 
seconds?
    Mr. Mallino. I mean our workers stand ready to help build 
out any infrastructure that you want that is incentivized. You 
know, we have been doing infrastructure our entire existence as 
a union. Our union endorsed, somebody made reference, I think 
it was disparaging, to the long markup of Waxman-Markey. LIUNA 
endorsed Waxman-Markey. We have endorsed a comprehensive 
approach to climate change and dealing with greenhouse gas 
emissions. But what we can't do is stand by and watch these 
projects get opposed individually by individually because this 
is designed to trap the resources and strand their resources.
    And this Congress, or any Congress, should take a look at 
these issues in a comprehensive manner and stop bowing down to 
the stop-this-project, stop-this-project, sign a letter 
opposing here, we want a comprehensive approach to climate 
change and we want comprehensive investments to make these 
transitions good for workers, but we are not going to do it 
when we are fighting these fights over one project after one 
project, because there will never be one project that has a 
hundred percent unanimity. I would love to have some projects 
that are identified by environmental groups that they can live 
with that we could work and move forward on.
    But there is a dearth of them, whether it is renewable 
projects or natural gas projects or whatever it is, it is we 
are fighting this fight every single battle, every single 
project. Not even energy projects; every single construction 
project has some NIMBY who doesn't want it to go forward. And 
we can't plan for, our workers can't plan for their retirements 
and their futures--sorry, Mr. Chairman--in that kind of 
climate.
    Mr. Kennedy. Thank you, sir. I yield back.
    Mr. Rush. The gentleman yields back. The Chair now 
recognizes the gentleman from Ohio, Mr. Long, for 5 minutes.
    Mr. Johnson. I will take that. I am Bill Johnson from Ohio.
    Mr. Rush. I am sorry.
    Mr. Johnson. Thank you, Mr. Chairman. It has been a long 
day.
    Mr. Rush. It has been a long day. You don't know how long.
    Mr. Johnson. Mr. Mallino, it is good to see you here with 
us today. I wish my colleague, Mr. McKinley, were still here. I 
would point out that if you had driven just a little bit 
further west, rather than stopping to go to school in West 
Virginia, you could have come to, you know, the home of three 
of the top candidates for the Heisman Trophy, The Ohio State 
University, right?
    But it is good to see you. So, I wanted to ask you, I know 
that LIUNA members don't just work on pipelines. Can you talk 
more specifically about the types of energy construction jobs 
that your members perform?
    Mr. Mallino. Sure. It runs the gamut, in all honesty, from, 
you know, building transmission projects like pipelines. On 
coal-fired power plants, our members do turnaround work when 
those power plants have to come offline and be tuned up. Our 
members in Ohio and West Virginia often rely on those hours, on 
those turnaround hours on coal-fired power plants. In Georgia, 
we have massive amounts of numbers and job hours on the nuclear 
power plant that is being built down in Georgia right now.
    It runs the gamut, which is why we have to be an all-of-
the-above energy union. We have a responsibility to represent 
the people who belong to our union and we do that and we try to 
do it very well. But if it is an energy project, it has 
probably got some component of a laborer, hopefully, a 
unionized laborer, on it.
    Mr. Johnson. OK. Mr. Barr, our neighbor across the border, 
you are our neighbor across the border in Pennsylvania, of 
course, and you mentioned in your testimony the $6 billion 
ethane cracker plant there in Manaca that is currently under 
construction. As you might know, right across the river in my 
district, we are sitting on pins and needles about another 
ethane cracker plant potentially, in my district. In your 
estimation, based on your experience there in Pennsylvania, 
what does that project mean for the economy of Pennsylvania and 
our region and what can we expect to see with the project in 
Ohio?
    Mr. Barr. If you are successful, and good luck, first, the 
estimates are, the studies are that that area could support 
probably beyond the Shell facility, probably three other 
crackers. There is enough natural gas there to make that 
significant of a change. What we anticipate is in addition to 
the labor work that is being done on that site now, it is one 
of the biggest construction sites in the U.S. as I understand 
it, there will be hundreds of well-paying jobs right at the 
facility. In addition to that, the feedstock from that factory 
will make products that every citizen in the United States 
needs.
    And we know we talk a lot about the fact that most jobs are 
small business, which is true, so those will be, in most cases, 
small business jobs. But the reality is, a lot of times, what 
it takes is the kind of investment that Shell is making of six 
to seven billion dollars instilled in Beaver County in the area 
that you are describing that will take all kinds of other jobs 
as well, everything to service the facility, to work on the 
facility, full-time jobs, the products that come from it.
    And so I wish you all the luck in the world with that. It 
has been, as I mentioned, game-changing for Pennsylvania in 
terms of jobs and economic development. And the one thing I 
would note is just as an overall with natural gas, perhaps the 
starkest thing that I could mention is one of the advantages of 
having been around for a number of decades is I remember the 
'70s when we had disruptions in our energy supply and, you 
know, lines at the gas stations, but worse, the cost for our 
citizens and the impact on the economy. And I also spent 20 
years in the petroleum industry and I was asked continually, 
why can't we use our own resources? We are now. We are now.
    And what has happened is if you note with the events that 
have happened in the Mideast over the last year, 20, 30 years 
ago, that would have had an extensive impact, negative one on 
this country. We saw it barely with a blip and that is because 
we have developed our own resources in this country.
    Mr. Johnson. I couldn't agree with you more. I spent 26-1/2 
years in the Air Force and I was on active duty in the '70s 
when all of that took place, and I can remember having to stop 
about every half hour as we drove across the country to visit 
the family to get gasoline because you could only buy a certain 
amount and many stations couldn't even get it. So, you are 
exactly right. And America's ability and our position as the 
world's dominant oil and gas producer in the world, right now, 
today, has changed the conversation on the international stage. 
And so I commend you for what you do.
    And thank you, Mr. Chairman. I yield back.
    Mr. Rush. The gentleman yields back. The Chair now 
recognizes the chairman of the full committee, Mr. Pallone, for 
5 minutes.
    Mr. Pallone. Thank you, Mr. Chairman. I did want to say 
that I understand the job impacts of pipeline construction and 
want to thank David Mallino from the Laborers Union for joining 
us this morning. But I am not asking you a question. I wanted 
to ask a question of Ms. Van Rossum.
    Last week, Chairman Chatterjee said FERC is, quote, losing 
the PR battle on landowner issues, specifically regarding 
rehearings and tolling orders as he announced a reorganization 
of the Office of General Counsel to more quickly address 
landowner rehearings. Now, Ms. van Rossum, in your written 
remarks, you mention that the proposed reorganization may not 
address the underlying issues impacting landowners, so could 
you elaborate on that and what you think would be the best 
remedy for the tolling order issue?
    Ms. van Rossum. Thank you very much, Congressman Pallone. 
First off, let me put forth the best remedy. I think the best 
remedy is that if there is a tolling order in play, the Natural 
Gas Act should be very clear that the Federal Energy Regulatory 
Commission cannot approve the exercise of eminent domain or any 
level of construction until that tolling order has been lifted 
on any and all parties that have a rehearing request in place. 
That makes sure that we maintain the status quo, so nobody is 
put at a disadvantage. It also incentivizes the Federal Energy 
Regulatory Commission to comply with the 30-day timeframe for 
responses that are actually laid out in the law.
    The proposal that Chairman Chatterjee put forth last week 
has a very significant loophole in that it says that it is 
going to prioritize rehearing requests from landowners, but 
that for in all other circumstances, it will only consider 
rehearing requests ``only when time permits.'' So that means 
that organizations like the Delaware Riverkeeper Network, the 
Sierra Club, and others, we will still be subject to tolling.
    It is very important to note that some of the most 
important precedent-setting legal decisions that have come out 
in recent years when it comes to FERC and the exercise of 
authority have been advanced by organizations like mine, 
including the oft-mentioned Sabal Trail decision as well as the 
decision that says to FERC, this was related to the Northeast 
Upgrade Project further north in the state of New Jersey, that 
FERC may not engage in illegal segmentation and they must 
consider cumulative impacts when they are considering projects. 
Those kinds of legal challenges are not brought by property 
owners and yet they will no longer be allowed to advance, so 
there will no longer be a check on FERC authority.
    Mr. Pallone. All right. I have to move on, because I want 
to try to get two more in.
    Ms. van Rossum. Absolutely.
    Mr. Pallone. Mr. Peress, could you elaborate on what it 
would mean for the landowners on the Spire Pipeline route, 
which is already in service and flowing gas if a court 
ultimately ruled that FERC did not do an adequate need 
analysis? And 1 minute, because I have to ask the third 
question.
    Mr. Peress. Well, we have asked the court to vacate its 
certificate, which would mean that the pipeline has no right to 
be on their land. I will leave the legal process to the state 
process to state law in Missouri and Illinois, but I would 
imagine that those landowners would have every right to eject 
them from their land. I doubt that they would ask them to pull 
the pipeline up, but I think they would be able to retake their 
land and use it the way that they intended to.
    Mr. Pallone. All right. And then my last question is for 
Ms. Danis. Do you believe that FERC is providing adequate 
opportunities for landowners and other individuals to 
participate in the public comment period prior to a project's 
approval?
    Ms. Danis. I believe that FERC has a lot of mechanisms in 
place for what they consider to be public participation, but it 
can hardly be said to be real public participation in a 
meaningful sense when there is no opportunity to have any kind 
of evidentiary hearing or to examine the data that is in the 
record.
    And as far as the public is concerned, the only economic 
analysis the public is given is the precedent agreements, and 
the Commission does not disclose its balancing inquiry until 
the moment it issues a certificate, and at that same moment, 
simultaneously denies, for example, a motion for a request for 
an evidentiary hearing. So the public can submit comments. It 
is unclear to me what value, if any, the Commission places on 
those comments because 99 percent of projects are certificated 
over serious landowner and public objection.
    Mr. Pallone. OK, thank you. Thank you, Mr. Chairman.
    Mr. Rush. The gentleman yields back. The Chair now 
recognizes my friend from the great state of New York, Mr. 
Tonko, for 5 minutes.
     Mr. Tonko. Thank you, Mr. Chair. Mr. Mallino, I listened 
with interest about the issue of infrastructure and you are 
very right. I believe if we are going to solve the climate 
crisis, it is going to require hardening existing 
infrastructure and building additional infrastructure, so I 
look forward to working with you and our members of Labor that 
will speak forcefully, I am sure, to the need for 
infrastructure, so I appreciate your comments.
    Mr. Mallino. Thank you.
    Mr. Tonko. Ms. Danis, I heard the exchange with a couple of 
my colleagues here about environmental impacts as part of the 
public interest determination process. What is the current 
legal understanding for considering climate impacts?
    Ms. Danis. So the current legal understanding, as former 
Commissioner LaFleur testified this morning, is influx, to say 
the least, before the Commission. Some members of the 
Commission understand that for climate change impacts, for 
example, they must do more than they are doing and there must 
be some way to quantify, and the social cost of carbon has been 
mentioned.
    And as Commissioner Glick has said, and I think he has 
spoken most forcefully on it, ``A public interest determination 
that systematically excludes the most important environmental 
consideration of our time is contrary to law, arbitrary and 
capricious, and not the product of reasoned decision making.'' 
So I concur with Commissioner Glick's view of what the public 
interest determination requires.
    Mr. Tonko. So, within that current legal understanding, is 
a project's contributions to climate change part of its 
environmental impact?
    Ms. Danis. Well, for example, in the PennEast project, the 
Commission disclosed in the EIS the greenhouse gas emissions 
associated with the project, but it is not possible to compare 
tonnage of greenhouse gas emissions to dollars on the other 
side of the scale of economic benefit. So there has got to be 
some way to understand the environmental impacts and to be able 
to really take them into consideration in the public interest 
determination.
    Mr. Tonko. And earlier this morning, as you indicated, 
former Commissioner--no, Chair LaFleur, stated her belief that 
FERC was capable of conducting this type of analysis in its 
review. They have information; they can put something together. 
She talked about doing something, you know, just with the 
available info, she had to try and cryptically put something 
together.
    So do you have any thoughts on FERC's technical ability to 
more completely assess environmental impacts on projects?
    Ms. Danis. It begs reason to say that the Commission does 
not have that technical expertise. These projects and the 
economics associated with them projects are incredibly 
complicated. The designs, the plans, the mechanics of the 
projects are incredibly complicated. Social cost of carbon is a 
pretty easy math tool and it is widely accepted by federal 
environmental resource agencies as representing the current 
scientific understanding. So I have no doubt that the 
Commission has the technical expertise.
    Mr. Tonko. Thank you. And, Ms. van Rossum, do you have 
anything you would like to add in regard to FERC's recent 
public interest determinations related to climate impacts?
    Ms. van Rossum. Thank you so much for that opportunity. I 
have a little bit of a different perspective than Ms. Danis. 
The National Environmental Policy Act is very clear, frankly, 
that FERC should consider climate change impacts, and also, the 
DC Circuit has been very clear that FERC should consider the 
climate-changing impacts of pipeline infrastructure. FERC has 
unilaterally decided that it will ignore the law, the 
legislation, and the DC Circuit in how it decides to review 
pipeline projects and render decisions.
    And I would also note because of the use of tolling orders, 
including with the most recent January 31st pronouncement, what 
will inevitably happen is another case will be brought like our 
challenge to the PennEast Pipeline project where we are 
bringing a climate change argument, but due to tolling and 
other factors we will be prevented from getting a final 
decision out of the courts until it is too late, until the 
project is already built and in the ground, which is what 
happened with the Northeast Upgrade Project when we were 
victorious in that case.
    Mr. Tonko. Thank you very much. Well, Mr. Chair, with that 
I yield back.
    Mr. Rush. The gentleman yields back. And the Chair wants to 
indicate that the witness questioning has been concluded and it 
was really a thrill to have you testify before this committee, 
and certainly want to thank each and every one of you for your 
testimonies. And as you depart, I would just extend to you 
traveling grace as you depart back to your destinations.
    And I want to remind Members that pursuant to committee 
rules that, they have ten business days to submit additional 
questions for the record to be answered by the witnesses who 
have appeared, and I ask each witness to respond promptly to 
any such questions that you may receive.
    And I request unanimous consent to enter into the following 
records, a letter from the Industrial Energy Consumers of 
America; a coalition letter from organizations representing the 
natural gas industry; a memorandum from the Congressional 
Research Service; two letters from the National Association of 
Manufacturers; a report from the Center for Manufacturing 
Research; a report from IHS Economics; a coalition of letters 
from landowners offering comments on the Natural Gas Act; a 
letter from the Appalachian Trail Conservancy; a letter from 
the congressional Denver, from Congressman Denver Riggleman. 
Seeing no objection so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Rush. And this concludes our hearing, and again, I 
thank the witnesses.
    [Whereupon, at 2:15 p.m., the subcommittee was adjourned.]

                 Prepared Statement of Hon. Bobby Rush

    In 1938, the United States Congress enacted the Natural Gas 
Act to regulate the interstate transport of natural gas. This 
action made regional access to the newly emerging energy source 
possible. The Act also addressed jurisdictional concerns 
underlined by a Supreme Court decision that deemed state 
regulation of interstate pipelines unlawful. Thus, it became 
the responsibility of the Federal Government to oversee this 
growing infrastructure.
    Subsequently, the Federal Energy Regulatory Commission was 
tasked with administering the integrity of this law on behalf 
of the Federal Government. It has since created corresponding 
policy statements to guide its review of pipeline applications 
under this authority. However, in recent decades, the execution 
of this authority has come under scrutiny.
    The Commission released a 2018 notice of inquiry in light 
of these concerns and to explore the efficacy of natural gas 
application reviews. A total of 1,600 organizations and 
individuals responded to this notice--most of them interested 
in reforms to FERC's current methods. Specific reform petitions 
include refining the Commission's need determinations, 
considering climate change and environmental impacts, and 
improving overall application processes.
    Last week, the Commission announced a structural 
reorganization to address the backlog of landowner rehearing 
requests associated with the pipeline review process. Though, I 
appreciate the Commission's consideration of this specific 
concern, this does not match the sweeping reform FERC must 
implement to fix a bygone process.
    A key element that must be addressed is how the Commission 
makes its ``public need determination.'' Presently, FERC merely 
requires applicants to demonstrate ``public need'' through 
preliminary contracts or precedent agreements for gas sales. 
This determination does not reflect the intricacies of what a 
modern-day pipeline application should entail.
    Regional need, eminent domain concerns, and the consequence 
to landowners must be factors in the Federal Government's 
approval of pipeline capacity expansion projects. Further, this 
process should take a closer look at the impact on our 
environment and expected energy transitions.
    Today, this Subcommittee will discuss the incompleteness of 
this critical legislation and what measures should be taken to 
upgrade its implementation. The origin of the Natural Gas Act 
is deeply rooted in serving the public's interest. As the 
interests of the public grow more complex, we must ensure that 
the laws governing those interests are comprehensive.

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