[Senate Hearing 116-343]
[From the U.S. Government Publishing Office]
S. Hrg. 116-343
MACGREGOR AND DANLY NOMINATIONS
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
to
CONSIDER THE NOMINATIONS OF KATHARINE MACGREGOR TO BE DEPUTY SECRETARY
OF THE INTERIOR AND JAMES P. DANLY TO BE A MEMBER OF THE FEDERAL ENERGY
REGULATORY COMMISSION
__________
NOVEMBER 5, 2019
__________
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the
Committee on Energy and Natural Resources
Available via the World Wide Web: http://www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
39-869 WASHINGTON : 2021
COMMITTEE ON ENERGY AND NATURAL RESOURCES
LISA MURKOWSKI, Alaska, Chairman
JOHN BARRASSO, Wyoming JOE MANCHIN III, West Virginia
JAMES E. RISCH, Idaho RON WYDEN, Oregon
MIKE LEE, Utah MARIA CANTWELL, Washington
STEVE DAINES, Montana BERNARD SANDERS, Vermont
BILL CASSIDY, Louisiana DEBBIE STABENOW, Michigan
CORY GARDNER, Colorado MARTIN HEINRICH, New Mexico
CINDY HYDE-SMITH, Mississippi MAZIE K. HIRONO, Hawaii
MARTHA McSALLY, Arizona ANGUS S. KING, JR., Maine
LAMAR ALEXANDER, Tennessee CATHERINE CORTEZ MASTO, Nevada
JOHN HOEVEN, North Dakota
Brian Hughes, Staff Director
Kellie Donnelly, Chief Counsel
Lucy Murfitt, Deputy Chief Counsel
Sarah Venuto, Democratic Staff Director
Sam E. Fowler, Democratic Chief Counsel
C O N T E N T S
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OPENING STATEMENTS
Page
Murkowski, Hon. Lisa, Chairman and a U.S. Senator from Alaska.... 1
Manchin III, Hon. Joe, Ranking Member and a U.S. Senator from
West Virginia.................................................. 16
WITNESSES
MacGregor, Katharine, nominated to be Deputy Secretary of the
Interior....................................................... 23
Danly, James P., nominated to be a Member of the Federal Energy
Regulatory Commission.......................................... 29
ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED
Alaska Federation of Natives:
Letter for the Record........................................ 3
American Exploration & Mining Association:
Letter for the Record........................................ 100
American Wind Energy Association:
Letter for the Record........................................ 101
Americans for Limited Government:
Letter for the Record........................................ 103
Appalachian Trail Conservancy:
Letter for the Record........................................ 105
Arctic Slope Regional Corporation:
Letter for the Record........................................ 5
Chamber of Commerce of the United States of America:
Letter for the Record........................................ 111
Congressional Sportsmen's Foundation:
Letter for the Record........................................ 6
Cook Inlet Region, Inc.:
Letter for the Record........................................ 8
Cramer, Hon. Kevin:
Statement for the Record..................................... 20
Danly, James P.:
Opening Statement............................................ 29
Written Testimony............................................ 31
Responses to Questions for the Record........................ 83
Gila River Indian Community:
Letter for the Record........................................ 112
Graham, Hon. Lindsey:
Statement for the Record..................................... 22
(The) Industrial Minerals Association--North America:
Letter for the Record........................................ 10
Irwin, Hon. Holly:
Letter for the Record........................................ 114
MacGregor, Katharine:
Opening Statement............................................ 23
Written Testimony............................................ 26
Responses to Questions for the Record........................ 63
Manchin III, Hon. Joe:
Opening Statement............................................ 16
Murkowski, Hon. Lisa:
Opening Statement............................................ 1
National Water Resources Association:
Letter for the Record........................................ 12
Public Lands Council, et al.:
Letter for the Record........................................ 13
Schumer, Hon. Charles E.:
Letter to the U.S. Department of Energy and U.S. Office of
Government Ethics dated 11/4/19............................ 34
Theodore Roosevelt Conservation Partnership:
Letter for the Record........................................ 14
Western Energy Alliance:
Letter for the Record........................................ 116
MACGREGOR AND DANLY NOMINATIONS
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TUESDAY, NOVEMBER 5, 2019
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The Committee met, pursuant to notice, at 10:03 a.m., in
Room SD-366, Dirksen Senate Office Building, Hon. Lisa
Murkowski, Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. LISA MURKOWSKI,
U.S. SENATOR FROM ALASKA
The Chairman. Good morning, everyone. The Committee will
come to order. Go ahead and be seated. Today we are here to
consider two nominees, Ms. Katharine MacGregor to be the Deputy
Secretary of the Department of the Interior and Mr. James Danly
to be a member of the Federal Energy Regulatory Commission
(FERC). These are both very important positions that I want to
thank you both for your willingness to serve today. The
Department of the Interior is the steward of about 20 percent
of all land in the United States, much of it in the State of
Alaska.
Roughly 60 percent of all National Park Service lands and
86 percent of all Fish and Wildlife Service lands are located
in Alaska, and that is why back home we oftentimes refer to the
Department of the Interior as our landlord, sometimes not so
affectionately. But it is why we depend on the Department to be
our partner and why we look to ensure that its leadership
understands our unique history and our needs. I have been
encouraged by the approach the Department has taken in this
Administration. For example, we are moving forward with the
responsible development of a small part of the non-wilderness
1002 Area.
The Secretary has signed a very small but a very important
land exchange with King Cove. And whether it is Assistant
Secretary Sweeney or you, Ms. MacGregor, the Department has
worked closely with us to address the crisis of missing,
murdered, and Indigenous women. So we appreciate all of that.
But for all the good work that has been done, we know that
there is a lot more that remains to be done. We have to see
greater progress in lifting the decades-old public lands
orders. We are waiting on a revised activity plan for our
National Petroleum Reserve-Alaska to restore balance in its
management. It is critical that the permitting of projects on
our North Slope, which we need to refill our Trans-Alaska
pipeline, stay on track; we need forest management reforms to
address the threat of wildfire and invasive species; and, of
course, we need to continue to build safe and secure
communities.
I know Ms. MacGregor, you are no stranger to any of these
issues. You have been described, as one friend from home said,
as North Slope tough. That is a very strong compliment. You
have served at Interior from the start of this Administration.
You also have a decade of experience here on Capitol Hill. Your
nomination has drawn strong support from dozens of groups from
the Alaska Federation of Natives to the Theodore Roosevelt
Conservation Partnership. So we will add all of those
endorsements to our hearing record today along with the
statement that Senator Cramer had planned to give when he was
going to be introducing you.
[The information referred to follows:]
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The Chairman. But as you know, you also have my strong
support.
Mr. Danly, I also want to welcome you to the Committee. I
am glad you are here as the seat that you are nominated for has
now been open for more than 10 months following the tragic
passing of former Chairman Kevin McIntyre. Everyone on this
Committee knows that I have been urging the Administration
since the very first of the year to address this vacancy and to
move on it.
So I am pleased that this time has come. You have an
impressive academic and professional background, having served
two tours of duty with the Army in Iraq where you received a
Bronze Star and a Purple Heart, and played a key role in
executing counterinsurgency efforts during the surge. We thank
you for your service and your sacrifice to our country.
After the military, Mr. Danly graduated from Vanderbilt Law
and chose to pursue a very different career as a FERC attorney,
first practicing at a major firm and now serving as FERC's
General Counsel. During his time as General Counsel, the
Commission has tackled key issues such as energy storage,
infrastructure development, and reform of the Agency's
regulations under the Public Utility Regulatory Policies Act,
PURPA.
If confirmed, Mr. Danly, you will need to address the many
remaining critical issues on FERC's plate. Among these are grid
resilience and capacity market reform, both of which are
critical to the reliability of our nation's electricity system.
As we have discussed in my office, Mr. Danly, you have my
support. But before I turn to my colleague here, I also want to
address what I expect will be the main source of opposition to
your confirmation this morning. It is true that you are not
paired with a Democratic FERC nominee to fill a second seat
that just opened in August, but I hope that will not be what
drives anyone to oppose your nomination. So just let me walk
through the history here.
First, FERC is set up to avoid the need for pairings. I
think this is one of the misconceptions that has been out
there. Back in 1990 Congress passed a law to stagger the five
Commissioners' terms by one year each in an effort to make sure
that we did not have these double vacancies. Second, bipartisan
pairings are not always the norm. More often, we have confirmed
individual Commissioners or had unbalanced pairings.
Back in 2014, Colette Honorable moved forward with the two
Republican Commissioners that we confirmed in 2017, after the
Obama administration declined to nominate anyone for those
seats. And then the third point is that this seat was already
previously paired. In 2017 we paired Kevin McIntyre with Rich
Glick. Rich will continue to serve through mid-2022. So the
slot we are now considering is to fill the remainder of Mr.
McIntyre's term through mid-2023. Then the final point is, the
reality is we have one nomination in the Committee right now;
we do not have two.
We all know that an individual's name has been out there
for some time, but we have not seen it sent up from the White
House and sent to us for our action. And so, as people have
asked me, well what are you going to do here with this opening
that we have right now? We have been waiting for 10 months to
get a name. We have Mr. Danly's name in front of us now so I do
not think it is fair to tell the Republican nominee that we
have to wait given that we have been waiting for 10 full months
and recognizing that this term will end a full year earlier
than the term for the Democratic seat. So know, colleagues,
that when we get the Democratic candidate, we will hear that
nomination, when we receive it, as we normally would. And if
that individual has the support to be reported from Committee,
we will move that individual from this Committee.
I would like to again thank both of you for being here this
morning. Thank you for your willingness to serve.
And just for colleagues' reference here, we will have an
opportunity for full questions today, but if members have
additional questions after the hearing concludes, we are going
to hold the record open until close of business tomorrow,
because I know that there may be some members that are still
traveling and I want to respect that. Let me turn to Senator
Manchin for his opening comments.
STATEMENT OF HON. JOE MANCHIN III,
U.S. SENATOR FROM WEST VIRGINIA
Senator Manchin. Thank you, Madam Chairman. I do not think
the microphone is working back there, right? Can you all hear
us in the back? Is it working now? I will speak louder. Okay.
So I want to thank you, Madam Chairman, for holding the hearing
on these two important nominations. Ms. MacGregor and Mr.
Danly, welcome to the Committee and thank you for your services
and willingness to serve. I appreciate the opportunity to meet
with each of you two weeks ago.
I think they were very enlightening meetings. Both of you
are extremely professional and your desire to serve is to be
commended, as are your families for joining you today. It is
always good to have family. No matter how things go, good, bad,
or indifferent, they are always behind you. I understand that,
and I am happy to have them both here.
The job description of the Deputy Secretary is fairly
simple. It is to help the Secretary run the Department when he
or she is there and to do his or her job for him when he is
not. I think we have spoken about that. In practice, that means
that you will spend a good amount of time helping Secretary
Bernhardt formulate and implement the Department's policies,
but it also puts you in a unique position to help shape those
policies and how they are implemented in the most compassionate
way.
It is no secret that many of these policies that Secretary
Zinke and some of Secretary Bernhardt's have pursued have been
considered controversial and met with opposition by some in
Congress and by many communities across the country. If you are
confirmed, you will be in a position to expand outreach in
order to ensure robust engagement by all the stakeholders
affected by the Department's actions. I urge you to make the
most of that opportunity, Ms. MacGregor. I also see you as
qualified to better bridge the divide between the Department
and Congress. Lord knows we need that. You know this
institution.
You spent ten years working for the House of
Representatives, including six years on the staff of the
Natural Resources Committee, which gives you insight and
experience. You are also clearly qualified for the position of
Deputy Secretary, having already performed its duties for the
past six months and having served as the Department's Deputy
Chief of Staff for the past 15 months. Senior officials who are
performing the duties or roles that are subject to Senate
confirmation should be formally nominated and considered, and I
am happy that we are starting the process for you today. I am
pleased to support your nomination. And with that I ask that
you commit to work with me and all of our colleagues on both
sides of the aisle to find consensus rather than conflict in
setting natural resource policies.
So Mr. Danly, the position to which you have been nominated
is entirely different from that of the Deputy Secretary of the
Interior. I think you and I spoke about this.
Congress established the Federal Energy Regulatory
Commission, which we know as FERC, as an independent regulatory
commission. Independent means that they are independent of the
President, the White House staff, the Department of Energy, or
anyone else in this or any other Administration when it
administers our energy laws. It is for all the people. A
Commissioner's job is to make independent determinations based
on laws and facts. Congress placed the important function of
regulating gas and electric rates, licensing hydroelectric
projects, and natural gas pipelines, and overseeing the
electric grid in an independent commission rather than the
hands of a Secretary of Energy for a good reason. It wanted to
make sure that these functions are performed impartially by
experts following due process and free from political
influence. It wanted to make sure that the Commission's
decisions were made collaboratively and reflected the wisdom of
a bipartisan group of five Commissioners.
I have been very vocal about the importance of pairing this
nomination with a nominee for the open Democrats seat. It is
not the Chairman's responsibility for that, and it is not
yours, I understand completely, and I have begged the White
House to please do this. This is one Committee that has worked
very well as a bipartisan committee. We have looked at the
facts, looked at what is best for our country and our regions,
and have been able to have input on both sides without any
conflicts whatsoever. And to put us in a situation to where we
can have a conflict and it could be avoided is just not right.
You are clearly very, very bright Mr. Danly and you understand
this position very well and I have no doubt that you will be
confirmed, but I think that we would be making a serious
mistake by not considering this in parity. I am still very
hopeful.
I have been talking to the White House. We have a person
who is very competent, very qualified. She has been vilified to
a certain extent, thinking she is too far to the left. I have
checked her background, I have made phone calls, checked with
utilities that she has worked with in her legal capacity. She
is deemed to be extremely bright, extremely articulate, and can
bring a lot to the table. And the Republicans have a 3-2 margin
even with the 5. And if it was the other way, when there are 3-
2 Democrats, that is the way it is supposed to work. We do not
eliminate somebody for the sake of politics. You know, in the
policies, we might differ, but if they can bring quality
information in a dialogue, I think it helps you and the other
four members.
So this is what we have been hoping for. This is what we
will fight for. We think it is the right thing to do. We
understand the background but this is the opening right now we
have to--she has been vetted, she is going through everything.
The FBI reports, everything, is back, ready to go, and we are
hoping that the President in his wisdom in this next week will
bring her forward and hopefully next week we can get her
nomination and have a full working five members. It is what we
are hoping for.
We think it is good for the United States of America, good
for all the people, good for Democrats and Republicans to have
a five-member working Commission. So again, I want to thank
both the nominees for their willingness to serve and being with
us this morning. I look forward to hearing from both of you
all, and I want to thank Chairman Murkowski for holding this
hearing today. Thank you.
The Chairman. Thank you, Senator Manchin, and I appreciate
your comments. Know that I too have always believed that when
you have a five-member Commission, it is best to have five
members on the Commission. And the way it is structured with
the Majority leader and the Minority leader being able to
appoint or to nominate and then have those considered by the
White House is a process that--sometimes it can be a little bit
interesting navigating, but we want this Commission, we expect
this independent agency to be able to function. We send a lot
of work your way and we need to have smart, committed men and
women to handle that work so know that it is my intention to
keep working with you on this.
Senator Manchin. Let me just say this about Senator
Murkowski being Chairman and myself being Ranking Member, we
have been working together and our staffs are working together.
We are able to discuss any issue, every issue, and look at it
from all of our colleagues on my side of the caucus and her
side and try to work the differences out so we do not have the
conflicts that we have in other committees. We do not let
politics get in the way of good policy for our country.
The lady I am speaking about has been on the desk of the
President and the White House staff since January. If there was
a concern, if there was a reason to disqualify her, they should
have let me know. We could have worked on this. There is none
so it leads me to believe that I have got to fight back as hard
as possible not to let politics in a committee that has worked
very, very well and very close in a bipartisan way. And that is
what we are fighting for. This has nothing to do with Mr.
Danly. I think you are a great nominee, and I think you will do
a great job. I just wish you had a partner going in there with
you to have a little bit of input from both sides of the aisle.
That is all. Thank you, Madam Chairman.
The Chairman. Thank you. I will just add that we are the
Committee that has the jurisdiction over the FERC, but there
are other committees that certainly rely on the FERC for
processing of their good work as well. So it is significant
this morning. I appreciate members' attention to this. We will
proceed with swearing in both of the nominees.
Before we do that, I had mentioned that Senator Cramer had
hoped to be here to introduce Ms. MacGregor. His statement of
introduction will be incorporated as part of the record.
[The statement of Senator Cramer follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Senator Graham had also hoped to be here to
introduce Mr. Danly, and his statement of support will be
included as part of the Committee record.
[The statement of Senator Graham follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. At this time, I would ask both of the
nominees to stand. The rules of the Committee which apply to
all nominees require they be sworn in connection with their
testimony. So I would ask you to please raise your right hand.
Do you solemnly swear that the testimony you are about to give
to the Senate Committee on Energy and Natural Resources shall
be the truth, the whole truth, and nothing but the truth?
Ms. MacGregor. I do.
Mr. Danly. I do.
The Chairman. You may both be seated. Before you begin your
statements, I will ask you three questions addressed to each
nominee who appears before this Committee. First, will you be
available to appear before this Committee and other
Congressional committees to represent Departmental and
Commission positions and respond to issues of concern to the
Congress?
Ms. MacGregor. Yes.
Mr. Danly. Yes.
The Chairman. Are you aware of any personal holdings,
investments, or interests that could constitute a conflict or
create an appearance of such a conflict should you be confirmed
and assume the office to which you have been nominated by the
President?
Ms. MacGregor. No.
Mr. Danly. No.
The Chairman. Are you involved, or do you have any assets
held in blind trusts?
Ms. MacGregor. No.
Mr. Danly. No.
The Chairman. Very good. With that, we will begin, Ms.
MacGregor, with you. We would ask that you provide us with
about five minutes or so of a statement, anything you wish the
Committee to know, and then we will proceed to Mr. Danly. If
either of you have family or those in the audience that you
wish to introduce, you are certainly encouraged to do so
because we welcome them as well. Ms. MacGregor, if you would
like to begin.
STATEMENT OF KATHARINE MACGREGOR, NOMINATED TO BE DEPUTY
SECRETARY OF THE INTERIOR
Ms. MacGregor. Chairman Murkowski, Ranking Member Manchin,
and members of the Committee, it is with profound humility that
I thank you for the opportunity to appear here today as
President Trump's nominee for the position of Deputy Secretary
of the Department of the Interior.
This morning I am joined by one of my brothers, Robert
MacGregor, who is one of my favorite brothers, and my aunt and
godmother, Sheila Sanford. I am also joined by my best friend
from college, Carla Spain, and my goddaughter, Elizabeth Spain,
who flew out today from California. Finally I am joined by my
parents, Jean and Peter MacGregor, who have sacrificed so much
for us, including at least 10 straight years of weekends
driving us to ice hockey games. As they are hockey parents, I
feel compelled to remind them that this is not a hockey game,
there are no refs to yell at, so kindly abide by the rules of
the Committee.
My personal introduction to the mission of the Department
of the Interior began much as one might expect in a state where
the federal footprint is just two percent with our national
parks. Some of my earliest memories are of my parents taking me
and my brothers to Valley Forge National Park to play and learn
about our nation's early history. In driving up and down the
Eastern seaboard to all of our ice hockey games, I do not think
there is a battlefield that my dad didn't stop at. From
Yorktown, to Gettysburg, to Lexington and Concord, we saw them
all.
I have to admit today that these visits drove my passion
for American history and my understanding for the importance of
preserving these special places for future generations. In my
decade of federal service on Capitol Hill working on natural
resource issues, I formed an even deeper understanding of the
broad and diverse missions of the Interior Department. In
addition to our parks and monuments, I learned our nation's
history through a new lens, our controlling statutes.
Beginning with the Homestead Act and Pacific Railroad Acts
of 1862, our laws tell the tale of an expanding, industrialized
nation growing Westward, and a government providing measured
access to the land so that people could carve out an existence.
These laws have provided the Interior Department with a wide
and wonderful range of mission areas and a land ownership and
management pattern that does not come without challenges.
However, since day one at Interior, I have worked hard to
achieve a balance in managing America's public lands, cultural
treasures, and natural resources in order to achieve this
Administration's priorities. I take seriously the call to
protect our healthy natural environment and the species that
depend upon it just as seriously as I take the call to foster
economic growth through the multiple-use and sustained yield of
our public lands. In both my time working on Capitol Hill and
at Interior, I have had the privilege to visit many of your
states, meet some of your constituents, and work on issues that
are important to them. In the Permian Basin, we had the largest
revenue sales in the history of the Department, $1 billion, and
I was able to hand over half of the proceeds to the State of
New Mexico to reinvest in schools, law enforcement, and other
priority municipal needs.
I have worked to enhance the reach of broadband to rural
and tribal communities so that they may have the same
educational and economic opportunities that we take for granted
here in our 5-bars world. And I have worked hard with our
Assistant Secretary for Indian Affairs, Tara Sweeney, to
address the outrage of missing and murdered Native American
women. In fact, one of the personal stories I heard on my
recent trip to Bethel, Alaska, to discuss these issues will
stay with me forever. I will never again take for granted that
access to justice sometimes relies upon a navigable road.
What I have learned from my time here at Interior and in
your states is similar to what I have learned from many of you
in our meetings last week. So many people have a profound
connection to the lands and waters that we manage, just as
Valley Forge National Park serves as one waypoint in my
personal history that reminds me of the love, joy, and strength
of my family. So many people care deeply about the decisions we
make and many feel that Washington has forgotten about them,
their families, and their way of life.
From landing a bowhead whale up in Wainwright, Alaska, to
cutting and milling timber in the O&C counties, moving cattle
around an arid landscape, or moving kids around our national
parks in an RV, all of these uses are valid and important,
often directed and preserved in our statutes. All of these uses
can and should continue to meet the needs of current and future
generations. If confirmed, I will do my best to ensure that we
strike the right balance in a way that will provide
conservation stewardship, enhance the safety of our
communities, increase energy security, and allow rural
communities to thrive and prosper.
Again, thank you for this opportunity and I look forward to
your questions.
[The prepared statement of Ms. MacGregor follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you very much, Ms. MacGregor. We
appreciate that. Mr. Danly, welcome.
STATEMENT OF JAMES P. DANLY, NOMINATED TO BE A MEMBER OF THE
FEDERAL ENERGY REGULATORY COMMISSION
Mr. Danly. Good morning Chairman Murkowski, Ranking Member
Manchin, members of the Committee. It is an honor to sit before
you today as a nominee to the Federal Energy Regulatory
Commission. I would like to start by thanking the President for
nominating me and by thanking the members of the Committee who
have been so gracious with their time in meeting with me. It
was a pleasure to speak with you and learn about your interests
in all of the issues touching FERC's jurisdiction that matter
so much to you and to your states.
I would also like to thank Chairman Chatterjee for all the
support he has shown me and the faith he has placed in me as
his General Counsel. And I would be remiss if I did not say
thank you to former Chairman Kevin McIntyre. Everyone who
worked with Kevin knew him to be wise, very humane, and I am
grateful for the opportunity to have worked for him.
And lastly, I would like to thank my wife, Frankie, who is
with me today. We met more than 20 years ago as undergraduates.
Frankie has been with me through thick and thin, and she has my
sincere gratitude for all the selfless support she has shown me
over the years. As a military wife, when I was deployed to Iraq
as an Army officer, when I was clerking on the Sixth Circuit
through grueling hours at my former law firm, and more recently
as I have been absorbed with my duties at the Commission. Our
son, James, is an energetic four-year-old who, for good reason,
is not here today, but I speak for him too when I say thank
you, Frankie.
Since 2017, I have had the privilege of serving as FERC's
General Counsel. In that capacity, I have directed the 200
lawyers in the Office of the General Counsel, overseen the
Commission's appellate litigation, and provided legal counsel
to two different Chairmen and four other Commissioners. I have
seen firsthand what can be accomplished when talented,
dedicated Commissioners take on the challenges presented by the
nation's ever-changing energy landscape. As every member of
this Committee knows, FERC's role as a regulator, though
narrow, is profound. The importance of the work the Commission
does in regulating electric and gas rates, permitting
infrastructure, protecting the reliability of the bulk electric
system, and overseeing our electric markets cannot be
overstated.
Every aspect of American life is touched by the work done
at the Commission. Although FERC's organic statutes were passed
some 80 years ago, those laws are as relevant today as ever. In
an era in which the very structure of our electric system
changes at an ever-increasing rate, FERC has worked diligently
to ensure open access, to guarantee fair, competitive markets,
and to remove barriers to entry that could stifle progress as
new technologies are developed to enhance the efficiency and
reliability of our electric system.
The fact that the Commission, operating under authorities
nearly a century old, the fact that it has overseen such
transformative change to the American utility sector is a
testament not only to the dedication and ingenuity of the
Commission and its staff----
[Public Outburst.]
The Chairman. Go ahead.
Senator Manchin. Welcome to the U.S. Senate.
Mr. Danly. Thank you. The fact that the Commission,
operating under authorities nearly a century old, is overseeing
such a dramatic change in the American utility sector is a
testament not only to the ingenuity and dedication of the
Commission and its staff but also to the robustness and
flexibility of the institution that was created by Congress and
by Commissioners past and present. One of FERC's greatest
attributes is that it is a collegial body.
And I am speaking not just to the fact that the
Commissioners work collaboratively, though FERC quite rightly
enjoys a reputation for that kind of collegiality. I am also
speaking of the fact that as a multi-member body each
Commissioner brings their own experience and point of view when
deciding the questions presented to the Commission. As a lawyer
I take my role and obligations seriously, and I care deeply
about the rule of law. I believe it is incumbent on every
Commissioner to act within the authorities granted by Congress
when discharging the Commission's duties.
I also believe that every Commissioner is obligated to
decide each case presented on the law and the record before
them. Should I be so fortunate as to be confirmed, I pledge to
this Committee that I will strive to continue all of the
critical work the Commission has done to ensure just and
reasonable rates, to strengthen our electric system's
reliability, and ensure the timely review of infrastructure.
I truly appreciate the honor that has been bestowed upon
me, and should I be confirmed, I will endeavor to live up to
FERC's great tradition of flexibility, independence, and
collegiality. Thank you for the opportunity to appear before
you and I look forward to your questions.
[The prepared statement of Mr. Danly follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Mr. Danly. I apologize for a
little bit of an interruption there.
Let me start with you, Ms. MacGregor, and this relates to
what we have all been watching these past couple weeks in
California with the intensity of the fires in that region. In
the 2018 Appropriations Act, we in Congress included a
provision that expedites removal of vegetation and hazardous
trees inside power line rights-of-way corridors on federal
lands. Last month, the Forest Service issued some proposed regs
to implement the law. It is my understanding that Interior is
working on guidance. We have not seen anything to date.
So I would ask you not only what is the status of that
guidance, but can you speak to actions that the Department has
taken since Secretary Zinke's Executive Order 3372 which
focused on reducing wildfire risk? This is something that is on
everyone's mind, so there is interest in knowing what has been
done and what more needs to be done, and then the guidance on
the vegetation management.
Ms. MacGregor. Thank you for the question, Senator. This is
of vital importance to the Department and something that I care
about personally. Since the passage of Section 512 we have
implemented it in certain states. I believe the State of
California has an instruction memorandum with the Bureau of
Land Management (BLM) to abide by the provisions that you
provided in that law. I would state that the Bureau of Land
Management has doubled their fuels treatment since 2015 and I
believe we are doing everything we can, in accordance with NEPA
(National Environmental Policy Act), to conduct mechanical
thinning, clearing, targeted grazing, salvage sales where
applicable, and prescribed burns.
And we are trying to make sure we are laser focused on
doing this in the wildland-urban interface to protect
communities. There are other tools that we may use in the form
of categorical exclusions. I believe the Department, and the
BLM in particular, only has access I think to 300 acres for
salvage sales right now, which is quite different from the
Forest Service, but we are doing everything in our power to get
out there and make sure we are making use of those provisions
and evaluating whether or not a rulemaking would be necessary
as well.
The Chairman. And the timing on the guidance?
Ms. MacGregor. So the BLM California guidance is out now,
and I anticipate similar guidances are going out in the form of
instruction memoranda.
The Chairman. Right. Thank you.
Mr. Danly, I want to ask about a letter that Senator
Schumer sent yesterday calling on DOE's Inspector General to
investigate what he calls the ``provision of inconsistent and
inaccurate ethics advice by FERC's Office of General Counsel
and the enforcement of the ethics pledge.''
[The letter referred to follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Now despite the claims in this letter, it is
my understanding that the ethics advice at FERC is provided by
FERC's designated agency ethics official. This is a position
that is not overseen or managed by the Office of General
Counsel. So I would ask you to respond to the claims made in
Senator Schumer's letter and explain your role, if any, in
ethics advice that has been provided by FERC's designated
agency ethics official or in the White House issuance of
waivers.
Mr. Danly. Yes. Thank you, Senator. I appreciate the
question. I saw that letter too in the press reports that
mention it that were out yesterday. I have, as General Counsel,
no role whatever in the provision of ethics advice. The entire
Federal Government, every agency in the Federal Government, by
regulation in 5 CFR Part 2638.104 specifies that every agency
has a designated agency ethics officer and we call them DEO.
And the DEO reports to only one person and that is the head of
the agency.
In our case, that would be the Chairman. The Office of
General Counsel does not oversee any of the activities of the
DEO. Nobody in my office, including myself, reviews his
decisions and we aren't part of the discussions that happen
between the DEO and the person in the agency that is receiving
his ethics advice. So there is no role whatever for the Office
of General Counsel in that process or in that program.
The Chairman. No role and you have not been involved in any
way then?
Mr. Danly. I am not involved in any of the advice that is
given by the DEO to any of the people in our Agency.
The Chairman. Thank you. Let me turn to Senator Manchin.
Senator Manchin. Thank you, Madam Chairman.
I will start with my first question to Ms. MacGregor. On
the public lands, the ownership of public lands, well it
belongs to all of us. I have not had that much experience with
BLM. I am trying to get up to speed as fast as I can, but I
haven't spent enough time in the West as I should, and I would
love to. But I am making it there. The thing I want to make
sure I understand is getting a fair return for the taxpayers.
And I guess a way you can see if it is a fair return is if it
is market-driven, not politically-driven or policy-driven, but
market-driven. What is your approach to that as far as
royalties the taxpayers receive back? I will go right into the
1872 mining law, which has not been adjusted whatsoever for
close to 150 years? Do you think that it is time that we should
be moving in a direction to try to bring those royalties up to
21st century regulations?
Ms. MacGregor. Sir, first, let me invite you to any trip
you would like to take viewing lands, especially to see mining
in action. There is a lot of mining in the State of Nevada. As
you know, we consider mining important at the Department of the
Interior. It is estimated that it provides $3 trillion in value
add to the United States GDP and is an important source of jobs
to many states. As for the Mining Law of 1872 and fair market
value through our statutes, we look to our statutes for our
guidance in ensuring fair market value is achieved.
Senator Manchin. Not on 1872's regulations, basically how
they treat the land when they leave. There are no laws that
prohibit them from basically leaving open pits and drainages
and everything else, and you cannot do that in coal mining.
Ms. MacGregor. Right. The Mining Law of 1872 set specific
per acre fees. And on top of that there is an aspect of clean
maintenance fees that we do collect from mining.
Senator Manchin. Would you not think that after 150 years
we should reevaluate that?
Ms. MacGregor. Should the Congress choose to amend the
Mining Law of 1872, we will certainly work with you.
Senator Manchin. Mr. Danly, can you just explain what you
meant by the humble regulator approach?
Mr. Danly. Sure. Thank you for the question Senator. Yes,
that was a phrase that I used in a speech at one point and it
boils down to the concept that officials and agencies should do
honor to the statute that they are charged with administrating.
And that is basically the sum of it.
Senator Manchin. States--if you want to explain a little
bit more about the reasonable wholesale markets?
Mr. Danly. I am sorry?
Senator Manchin. Wholesale markets? FERC being involved in
wholesale markets, if you can. PGM and oversight there, if you
want to talk about that.
Mr. Danly. Sure. So the wholesale markets are these
regional markets that FERC has created and allowed to be
created over the last few couple decades have seen a drastic
change in the way that electricity services are provided to
utilities in very large swaths of America. This has been an
attempt to harness market forces in order to drive down prices
and assure the most efficient possible dispatch of utilities.
This is a system that ensures resource adequacy and the lowest
possible cost, and it is contrasted to the old style of utility
regulation in which the previous years' vertically integrated
utilities acted on their own to simply plan and then have their
returns based in the old days on cost of service rate making.
Senator Manchin. My main concern is basically reliability
versus just the cheapest form of filling the grid system and
how reliable it is. Baseload, things of that sort, you consider
when you are making a determination of what comes on it.
Mr. Danly. So, thank you. One of the basic requirements, or
one of the basic objectives, that our capacity markets are
designed for in the case of PGM is resource adequacy. We are
using--across America the different RTOs are trying to employ
market signals to incent the proper new entry to ensure that
there is sufficient capacity to meet not just the predicted
peak load days, but then a certain reserve margin beyond that.
Those are successful programs so far, and the markets are
always being refined both by the tariff owners and by FERC to
ensure that those objectives of the capacity markets are met.
Senator Manchin. If I can ask one final question. Ms.
MacGregor, what is the greatest threat you think that we face
as citizens of this country protecting the public lands that we
have?
Ms. MacGregor. Right now, sir, to be frank, wildfire and
the risk to human life is on my mind.
Senator Manchin. From the private sector being involved,
participating in economic resources, is that cause for any
concern whatsoever or do you think we are being good stewards
there? Are we doing a good job of overseeing that?
Ms. MacGregor. I think we do quite well in the United
States, and economic prosperity is really important to many of
the rural communities we work with and our statutes direct us
to utilize those resources but do so in a measured manner.
Senator Manchin. How about recreation?
Ms. MacGregor. Recreation is vital to many economies.
Senator Manchin. I know you and I had a passionate
conversation on this, but we all believe very strongly, I think
on both sides of the aisle, that is a game changer economically
in all of our states and you support that wholeheartedly?
Ms. MacGregor. Absolutely. I wholeheartedly----
Senator Manchin. Recreation and development?
Ms. MacGregor. ----enjoy recreation and have in your state.
Senator Manchin. Okay. Thank you.
The Chairman. Thank you, Senator.
Senator Alexander.
Senator Alexander. Thank you, Madam Chairman. Welcome, Ms.
MacGregor, Mr. Danly.
Ms. MacGregor, I want to talk about the nearly $12 billion
in long-delayed maintenance projects at our 419 national parks,
and about a remarkable piece of legislation that has attracted
an unusual amount of bipartisan support, and that is the
Restore Our Parks Act which was introduced by Senator King and
me and Senator Warner and Senator Portman earlier this year.
That bill has 43 co-sponsors--13 Republicans and 30
Democrats. It is in this Committee. It has had the strong
support of the Administration, of the President. So my question
to you is does the Administration still support the Restore Our
Parks Act?
Ms. MacGregor. Senator, we absolutely support addressing
our nation's backlog on national parks.
Senator Alexander. And if I am not mistaken, I believe this
is the first Administration that has allowed its Office of
Management and Budget to support a method of funding of this
deferred maintenance in the way that this legislation does, and
you reflect that in the budget that the President submitted to
Congress this year. Is that correct?
Ms. MacGregor. That is 100 percent accurate, and I would
point out, as Senator Manchin said in his introductory remarks,
finding consensus can be a struggle sometimes and this is one
area where many brilliantly have found consensus.
Senator Alexander. Well, it can especially be a difficult
area and in the area of environmental matters, but here we have
President Trump, virtually every environmental group,
conservation group that I am aware of, and Republican and
Democratic Senators in support of it. Now in the House of
Representatives, there is also strong support, 330 co-
sponsors--128 Republicans and 202 Democrats--and that moved out
of the House Natural Resources Committee in June by a vote of
36 to 2. My hope, Madam Chairman and Senator Manchin, would be
that we could do this year the same thing we did last year.
There is another bill that I support which Senator Manchin
and Senator Gardner support which has to do with mandatory
funding for the Land and Water Conservation Fund. Ms.
MacGregor, is that a part of the President's budget?
Ms. MacGregor. Sir, the Land and Water Conservation Fund is
of great importance to many counties, and we work very closely
with the Congress in implementing what funds we receive.
Senator Alexander. Right. But at this point it would be
accurate to say that funding for the Restore Our Parks Act is
in the President's budget and mandatory funding for the Land
and Water Conservation Fund is not in the President's budget?
Ms. MacGregor. That would be accurate.
Senator Alexander. Okay. Well my hope, Madam Chairman and
Senator Manchin, would be that this Committee could do this
year what it did in the last Congress. I am a co-sponsor of
Senator Manchin's bill on the Land and Water Conservation Fund.
I have been strongly for it for a long time going back to the
time of the President's Commission on Americans Outdoors in
1985 and '86. But I think the better way to have success with
those bills is to do again what we did before and what the
House did, which is moved them together but separately. The
Restore Our Parks Act is in the President's budget.
We could move the Land and Water Conservation Fund bill out
of this Committee I believe. I would certainly vote for it. I
think there are enough votes to do that and do it first to make
sure it comes out of Committee, then we could move the Restore
Our Parks Act out of Committee. Then the Senate could consider
both of them. The House has done the same and then we can go to
work to see how much we can get done on the Floor of the
Senate. So I do not want us to miss this opportunity.
Ms. MacGregor, can you think of another way, other than the
Restore Our Parks Act, that Congress might be able to provide
funds to reduce, cut in half the $12 billion deferred
maintenance backlog of the National Park System that exists
today other than the Restore Our Parks Act?
Ms. MacGregor. Sir, I do not believe in 20 seconds I could
contemplate new ideas on that front for $12 billion.
Senator Alexander. Well, I cannot think of any. I know for
me to give you an example, the maintenance backlog in the Great
Smokies is $235 million. The annual appropriation for the
Smokies is $20 million. The Smokies has no entrance fee because
of an agreement made at the time the park was created. So there
is no possible way that the backlog in the Smokies could ever
be addressed without something like the Restore Our Parks Act.
And Madam Chairman and Senator Manchin, I hope that the
Committee will do again this Congress what we did last Congress
and move both bills separately, together out of Committee and
let the full Senate consider them. Thank you very much.
The Chairman. Thank you, Senator Alexander, and I
appreciate your continued focus on what we are going to do with
our park maintenance backlog.
Senator Heinrich.
Senator Heinrich. Thank you, Madam Chair, and I want to say
despite the fact that the Ranking Member is not here to hear it
right now, I look forward to working with him to reform the
1872 Mining Act.
We have had our share of threats to water security in our
state as a result of that antiquated legislation, and there is
nothing more important to economic development in a Western
area state than water. I am going to confine most of my
comments to the first nomination today, and Madam Chair, I just
want to say how deeply worried I am that we are on the
precipice of the FERC becoming another political entity,
another extension of the White House or DOE.
There is a lot of risk associated with that in the short-
term that may work well for one side and their view, but it
risks creating a back-and-forth that I think would be truly
untenable for our energy grid overall. You could see a scenario
playing out where in the short-term certain sources of energy
are subsidized to the point of driving energy costs
substantially. That might be good for some people regionally.
In a year, maybe the gentlewoman who is escorted out gets
nominated and appointed to the FERC and we can no longer permit
natural gas lines at all in this country. The FERC has worked
much like this Committee, very effectively in a very bipartisan
manner, and it pains me to say that I am frankly disappointed
in the current Chairman. I am mostly disappointed not in his
decisions but in how he has conducted himself. He has engaged
in a war with the media. He has posted things like ``come at me
bro'' online to his critics. When we do this and when we fail
to pair nominees, we really risk tearing down the norms that
have made this body so effective and so apolitical for so long.
I do not think that is the responsibility of Mr. Danly to
speak to. I certainly would not ask him to criticize or comment
on his potential colleagues should he be confirmed, but I do
want to ask you--Mr. Danly, if confirmed, you are going to help
determine whether FERC continues to be viewed as independent,
as apolitical, and whether or not it will behave as a
regulatory body as opposed to a political body. I think you
have an awful lot of experience that says you understand the
distinction between those two approaches. I want to ask you how
you intend to meet that responsibility and, frankly, how should
a FERC Commissioner conduct themselves in the public sphere?
Mr. Danly. Thank you for the question Senator. As to the
first point, I view the role of the FERC Commissioner as being
primarily that of an adjudicator. And that, should I be
fortunate enough to be confirmed, is exactly how I would
comport myself. This is the role of a judge more than it is the
role of a policy setter. Now I know under the Administrative
Procedures Act we have the option of doing both adjudications
and rulemakings, of course. That is part of what FERC does. But
in the 1,200 or so orders per year that are issued, substantive
orders, there are 5,000 or so of the kind of housekeeping ones.
The vast majority of those are adjudicatory. I would conduct
myself as an adjudicator and confine my decisions to the law on
the record as it's developed. And, yes, that is my philosophy
on what the proper role of a Commissioner is.
Senator Heinrich. Last year, the Commissioners voted 5-0 to
terminate Secretary Perry's proposed rulemaking that would have
required ratepayers to subsidize what are currently uneconomic
generation sources. Did you agree with FERC's unanimous
decision to reject those subsidies?
Mr. Danly. Yes. I agreed with the decision on the 403.
Senator Heinrich. Do you think that there is currently an
urgent threat to the resilience and the reliability of the
power grid that would justify an intervention in wholesale
power markets?
Mr. Danly. I am sorry, sir. You said a wholesale power
markets what?
Senator Heinrich. Do you believe that currently there is
enough of an urgent threat to the resilience and the
reliability of the grid for FERC to intervene in those
wholesale markets and subsidize one source of generation over
another?
Mr. Danly. Thank you. So the purpose of these wholesale
markets is to ensure just and reasonable rates, and I think
that like any complicated and integrated wide-ranging
regulatory regime, it is an iterative process of continuous
refinement of how these markets function. I do not see a need
for there to be a wholesale revision of the wholesale market,
is how I think you put it, but there certainly is work
continuously that has to be done by the Commission and by the
utilities that file their terms with us, to try to get the most
accurate pricing possible. And that is something that is a
goal, that though elusive, is always something the Commission
needs to strive for.
Senator Heinrich. Thank you, Mr. Danly.
The Chairman. Senator Cassidy.
Senator Cassidy. I just saw the letter that Senator Schumer
sent, but just repute once more for the record you had nothing
to do with the ethics, with the DEO.
Mr. Danly. So, thank you, Senator. That is correct. The
designated agency ethics officer, not just in FERC, understand,
but in every agency across government according to the Code of
Federal Regulations, is the legal obligation that the agencies
have, is appointed by and reports to the agency head and the
agency head alone. Now, of course, he has interactions with the
Office of Government Ethics and so forth. But that is the chain
of command for the purposes of the agencies.
Senator Cassidy. I think also for the record I can point
out from something I got from you, Madam Chair, is that 35
percent of the time people come before this Committee and they
are not paired with someone from the other party. But in this
case, actually I am told you mentioned that in your opening
statement, but indeed the position that you are filling
originally was paired with Mr. Glick. And so anyway just to say
there has been a lot of objections to this, but I gather only
27 percent of the time were people formerly paired. So more
often than not they are not. So there seems to be a little bit
of, oh, I don't know, ``bree'' around this, but just to make
that straight for the record.
Ms. MacGregor, great to see you. Congratulations to you
both, but also I enjoyed working with you when I was with Doc
Hastings way back when and thank you for your trips to
Louisiana.
Of course, as you know, I am concerned about the eroding
coast in Louisiana, and there is this kind of a relationship
between offshore oil production and the revenue that we use to
rebuild our coastline. Interior has a role in that. Would you
comment on that role and what you see could be done
constructively to help Louisiana's resiliency?
Ms. MacGregor. Yes, sir. Oil and gas production off our
coasts predominantly in the Central and Western Gulf of Mexico
account for 16 percent of our nation's crude and roughly 3
percent of our natural gas. Under the Gulf of Mexico Energy
Security Act, which is law, we adhere to the revenue-sharing
provisions that are guaranteed by that law which include 37.5
percent of the revenues being shared with the four Gulf states
at a cap of $500 million on an annual basis. That law also
includes a 12.5 percent set aside for mandatory Land and Water
Conservation Fund funding, and I know that the State of
Louisiana subsequent laws that utilize the revenue-sharing
funds for coastal restoration.
Senator Cassidy. Yes, so we do. Let me also point out that
although Senator Alexander is all about using more Gulf of
Mexico revenue for mandatory spending on Land and Water
Conservation Fund, I would love it if everybody who believes in
it would allow the onshore federal lands to contribute to that
as well because right now about 80 percent of it comes from the
Gulf of Mexico. At some point you begin to cannibalize dollars
that could come to Louisiana and other Gulf Coast states for
coastal restoration.
I also point out that there is a cap on that which is
shared with the Gulf Coast states. I think it is 35 percent, a
$500 million overall cap, whereas there is no cap on the
onshore and they are at 51 percent of the revenue share and we
are 35 percent up to a $500 million cap. I am confirming that.
But just to say that the lack of equity is just kind of
galling, particularly when we are using money for coastal
restoration and theirs goes to kind of the general fund. So
anyway, I hope my fellow Senators will ponder that as they
enthusiastically support this bipartisan legislation as Senator
Alexander refers to it. With that, I yield back. Thank you.
The Chairman. Thank you, Senator.
Senator Hirono.
Senator Hirono. Thank you, Madam Chair. I ask the following
two questions of every nominee who comes before any of the
committees on which I sit. First question, since you became a
legal adult have you ever made unwanted requests for sexual
favors or committed any verbal or physical harassment or
assault of a sexual nature, Ms. MacGregor?
Ms. MacGregor. No.
Senator Hirono. Mr. Danly?
Mr. Danly. No.
Senator Hirono. Second question, have you ever faced
discipline or entered into a settlement related to this kind of
conduct?
Ms. MacGregor. I have not.
Mr. Danly. No.
Senator Hirono. Ms. MacGregor, just yesterday Reveal
published an article that detailed your close relationship with
the oil and gas industry. You are outspoken about your belief
that environmental regulations are burdensome, and you strongly
support expanding oil and gas development on public lands. The
article noted that if issues arise for the fossil fuel
industry, their response is, I quote the article, ``We'll call
Kate.'' You are close to the fossil industry. I am not
surprised that Donald Trump nominated you to serve as a second-
in-command at the Department.
DOI is full of political appointees that, like you, are
close to the fossil fuel industry starting at the top with
Secretary Bernhardt who shares your perspective that
environmental regulations are burdensome. We know that the
fossil fuel industry opposes actions to address climate change.
However, in a report submitted by the DOI IG last November that
summarized the major management and performance challenges
facing the Department for Fiscal Year 2018, it noted that many
DOI coastal assets are threatened by climate effects. Does
climate change pose a significant risk to DOI assets?
Ms. MacGregor. Thank you, Senator. I recognize that the
climate is changing. Man does have an impact. That is what the
science tells us. And the science indicates that there is great
uncertainty in projections related to those impacts.
Senator Hirono. So is your answer yes?
Ms. MacGregor. Yes.
Senator Hirono. Sounds like yes. Okay. During your time at
DOI have you been personally involved in or witnessed two
instances of political interference with scientific research or
communication?
Ms. MacGregor. I have not. In fact in my time at Interior,
the Secretary has appointed a counselor, a senior advisor, a
senior science advisor in the Secretary's hallway and we have
noticed that scientific integrity complaints have gone down
under our Administration.
Senator Hirono. That is good to hear, although I am not so
sure that this Administration is committed to science over
political considerations.
Again for you Ms. MacGregor, several outside groups have
conducted a number of DOI employee surveys over the past few
years and in response to one recent survey, a DOI Senior
Executive Service employee said, ``the biggest problem or
challenge now facing DOI is inexperience, lack of competence,
and extreme political influence by the current group of
appointees whether confirmed or acting.'' Another survey found
that more than 39 percent of respondents from the National Park
Service and U.S. Fish and Wildlife Service reported poor
leadership. If confirmed, what will you do to improve staff
morale?
Ms. MacGregor. Thank you for that question, Senator, and I
think it is very important. And one of the--we have many
surveys. One of our recent surveys, which was originally
conducted in 2017 also found that there are increased instances
of potential harassing behavior, which I think is important to
you. And we have found in our most recent survey that harassing
behavior has gone down. I think we need to work very closely
with our professional career employees. I have had great
experience in working with them, and we believe having a strong
ethical culture is important at the Department.
Senator Hirono. And in fact, there is another GAO report,
September 2019, that said that there have been threats,
including threats to kill people, to Federal Land Management
employees and so there are these safety risks. Are you
committed to making sure that you address the safety risks of
your employees?
Ms. MacGregor. Absolutely.
Senator Hirono. Mr. Danly, in May 2018 FERC issued a policy
as part of its consideration of Dominion Energy Transmissions
Newmarket Gas Pipeline Project that attempted to eliminate
consideration of most upstream and downstream greenhouse gas
emissions as part of FERC's review of interstate gas pipelines.
You defended that policy in court as General Counsel arguing
that it would be ``an exercise in futility'' to ask project
developers for more information about the origin or destination
of the gas. Then in June 2019 the D.C. Circuit of Appeals
affirmed FERC's obligation to consider these kinds of
foreseeable gas emissions under NEPA.
If the Senate confirms you, what is your plan for how FERC
will identify the information on the greenhouse gas emissions
from gas pipelines necessary to fulfill its statutory
responsibilities, having argued that it is ``an exercise in
futility'' to get such information?
Mr. Danly. Thank you for the question, Senator. In the
colloquy with, I believe it was Judge Garland, I was having a
discussion about the jurisdictional power of the Commission to
compel information from end-use customers. As to the answer to
your question on how to deal with the greenhouse gas emissions,
the black letter law of CQs implementing regulations for the
National Environmental Policy Act require that all direct and
indirect effects and cumulative impacts of every major federal
action be reviewed and considered when making a decision. And I
have every intention of following that unequivocal black letter
law should I be lucky enough to be confirmed.
Senator Hirono. Even if you say it is an exercise in
futility? Well, I hope you do your best. Thank you.
The Chairman. Senator Barrasso.
Senator Barrasso. Thank you, Madam Chairman. Madam
Chairman, both of these positions are very important to the
State of Wyoming. These are very important positions, and I
appreciate this Administration's recommendations and
nominations and I am delighted to have both of you here today.
I would also say that I heard from a previous Senator that one
of the nominees has been outspoken about the belief that oil
and gas regulations are burdensome. Well let me tell you they
are also expensive and they are also time-consuming. All of
those things apply to some of these regulations. I have seen it
every day in Wyoming.
Wyoming has been directly impacted by a series of
unfavorable court decisions, including the WildEarth Guardians
case, a case in which the court prohibited oil and gas activity
permitting on over 300,000 acres of federal land in my state.
The Bureau of Land Management acted quickly to address the
court's concerns.
Ms. MacGregor, you know, these decisions cause considerable
uncertainty for all the stakeholders. So there is an expense,
there is a burden, there is uncertainty. Will you commit to
communicate clearly with states and stakeholders about the next
steps to reduce as much as possible the uncertainty that comes
with such decisions?
Ms. MacGregor. Yes, sir.
Senator Barrasso. The Department of the Interior announced
last month that revenues generated from energy development on
federal lands increased by almost $500 million and $750 million
over the Fiscal Year 2018, totaling $11.6 billion. In addition,
the Office of Natural Resources Revenue distributed more than
$2.4 billion of the Fiscal Year 2019 energy revenues to 35
states. My home State of Wyoming got $641 million in revenue.
And several of the Democratic Presidential candidates have
stated that they are going to ban--we see this in the debates,
see it on television, they are not hiding this--banning
hydraulic fracking on the federal lands if elected. Some have
gone further to say they will end all federal oil and gas
leasing. So what impact would such a policy have on the Federal
Treasury and the states that receive such significant funding
from federal leasing and production?
Ms. MacGregor. Thank you for the question, Senator.
Hydraulic fracking when paired with directional drilling and
other innovations that have been created in this country since
2006 have led to our decreased dependence on foreign oil and
have played a role in, I believe, energy prices for this
nation. A complete ban would significantly impact energy
production.
Senator Barrasso. So it would increase prices for users and
it would decrease revenues to the states that have been
benefiting by this?
Ms. MacGregor. That is likely, I believe, yes.
Senator Barrasso. So last month the Bureau of Land
Management issued a proposed rule to streamline the process for
reducing the royalty rate on trona, known as soda ash. Wyoming
soda ash producers are up against severe international
competition. In the global marketplace, countries like China
flood the markets with synthetic low-quality soda ash. Former
Secretary Zinke made a commitment to me and several others
including the House Republican Leader, Kevin McCarthy, to take
steps to lower the royalty rate on soda ash. Secretary
Bernhardt understands the importance of this rulemaking. Will
you support the Secretary lowering the royalty rate on soda ash
from 6 percent to 2 percent?
Ms. MacGregor. Sir, the law provides the Secretary with
that authority to lower royalty rates based upon a variety of
issues. And yes, we will work with you on that through the
rulemaking process.
Senator Barrasso. Across the country invasive species
damage ecosystems, cause billions of dollars in economic damage
each year. There was a story today in the New York Times about
invasive species and wildfires in California.
So in 1999, the National Invasive Species Council was
created to bring together resources and improve coordination
among the secretaries and a number of different secretaries. A
committee was created to advise the Council in best practices
and emerging threats. Earlier this year the committee was
placed on an inactive administrative status.
So given the threat of a variety of invasive species that
they pose to our communities and to natural resources and
economies, what steps do you think we should take to ensure the
coordination among the various secretaries continues even in
the absence of the advisory committee?
Ms. MacGregor. Sir, we do quite a bit of analysis and
studies on the impacts of invasive species on a variety of the
different needs in different states. I believe we need to work
with states and find the most effective ways to address these
invasive species and reduce their impacts significantly.
Senator Barrasso. Thank you. Madam Chairman, I am out of
time so I am going to submit in writing a question to Mr. Danly
related to the legislation that I have introduced updating
purchase obligations to deploy affordable resources to energy
markets. It is called Update PURPA, and I am working along with
Senators Risch, Cramer, and Daines. So thank you, Madam
Chairman.
The Chairman. Very good. Thank you, Senator Barrasso.
Senator Cortez Masto.
Senator Cortez Masto. Thank you, Madam Chair. Welcome to
both of you. Congratulations on your nominations. It is okay to
smile at this point. You are almost done. Welcome to your
families. It is great to see everybody here. Let me ask a
couple questions.
Ms. MacGregor, you highlighted--I am from Nevada. Over 80
percent of the lands are owned by the Federal Government, the
majority of that is the BLM. So first of all, have you been to
Nevada yet in your current position?
Ms. MacGregor. Quite a few times.
Senator Cortez Masto. Wonderful. We will welcome you back.
Let me ask you about a couple of things that are happening
right now. Next week the BLM is expected to offer more than
550,000 acres in White Pine Lincoln and Nye counties for
auction as part of one of the Bureau's quarterly Nevada oil and
gas lease sales. The surrounding cities of Mesquite and
Henderson and local stakeholders have expressed concerns about
the potential impact that the oil and gas production could have
on the Hydrographic Basin 222, which is the primary source of
culinary water for Mesquite, and I share their concerns.
I guess my question to you is, should you be confirmed, can
you please identify the concrete steps you will take as Deputy
Secretary to ensure that these oil and gas leases take into
consideration and are not on lands where we have concerns about
drinking water along with use of recreation, wildlife, and
wilderness areas?
Ms. MacGregor. If I am confirmed, I will absolutely work
with you on those issues. And I would point out in the leasing
process we do quite a bit of environmental analysis, but we
also do subsequent analysis prior to the issuance of any
permit. And we will communicate with you through the entirety
of that process.
Senator Cortez Masto. And listen to the key stakeholders in
the area as well.
Ms. MacGregor. Yes.
Senator Cortez Masto. Great. So let me ask you with respect
to oil and gas leasing because this has been an issue for us. I
think I have seen more oil and gas leasing happening or at
least going up for auction in the State of Nevada under this
current Administration unfortunately. Ruby Mountain seems to be
the area that there seems to be a lot of interest in even
though there is low impact or no oil and gas potential there.
So I guess my question to you is, can you identify the
steps you would take to limit the availability of low and no
oil and gas potential lands included in lease sales? Because I
think it is a waste of time. If it has already been identified
as low or no potential for oil and gas, why do you keep
auctioning these areas off?
Ms. MacGregor. I think that is a fair question and a fair
point. Under FLPMA and the Mineral Leasing Act, we are required
to conduct quarterly sales. I know the Bureau of Land
Management has been aiming to meet that given that it is
subject to a Secretarial Order. Generally when we issue the
lease sales and do a call, ultimately, it is very market-driven
and generally leases that do not have any prospective oil and
gas development do not receive bids. However, we can work with
you. I have not worked specifically on that issue. I have been
focused more in Nevada on mining, grazing, and the Fallon
expansion, but I would be more than happy to work with you in
the future on that.
Senator Cortez Masto. Thank you, and I look forward to
working with you on those other areas as well.
Mr. Danly, let me ask you a couple of questions. Do you
agree that renewable energy should and will continue to be an
important part of our nation's electric mix?
Mr. Danly. Undoubtedly.
Senator Cortez Masto. Do you agree that renewables like
wind and solar power can be reliably integrated into the power
grid?
Mr. Danly. Yes, they can be under the right circumstances.
Yes.
Senator Cortez Masto. Do you agree that states have the
authority to establish the resource mix that best serves their
customers?
Mr. Danly. I am sorry. I didn't quite hear that.
Senator Cortez Masto. Sure. Do you agree that the states
have the best authority to establish the resource mix that best
serves their customers?
Mr. Danly. Yes. That is built into the Federal Power Act.
Senator Cortez Masto. Okay. And do you support the FERC's
final rule on energy storage?
Mr. Danly. I would be reluctant to express support or not
supporting it because should I be confirmed, I could be asked
to pass upon it in later proceedings.
Senator Cortez Masto. Alright. Let me ask you this, do you
commit to working with the other four Commissioners to ensure
that this rule is properly implemented by RTOs and ISOs?
Mr. Danly. Absolutely.
Senator Cortez Masto. Okay. Let me ask you this, when it
comes to climate and environmental impacts of infrastructure
projects, where do you see FERC's role? Does the Commission
have the authority and or the ability to consider the impacts
of projects on the climate when making permitting decisions?
Mr. Danly. Thank you. The obligations of the Commission are
to look at the infrastructure question and make a public
interest determination based on the record in front of it, and
that includes by the National Environmental Policy Act,
consideration of, as I have said before, direct and indirect
effects and cumulative impacts. So the Commission is obligated
to take those into consideration when deciding whether or not
something is in the public interest.
Senator Cortez Masto. So you would agree with the Sierra
Club case?
Mr. Danly. The Sabal Trail?
Senator Cortez Masto. Yes.
Mr. Danly. I agree with the D.C. Circuit with a hands-down
binding ruling, yes.
Senator Cortez Masto. Thank you. I appreciate that. Thank
you. Congratulations again.
The Chairman. Thank you, Senator.
Senator Lee.
Senator Lee. Thank you very much, Madam Chair. Thanks to
both of you for being here. I have appreciated my conversations
with both of you in the past, and I am grateful to you for
being willing to be considered for these positions.
Ms. MacGregor, let us start with you. I want to talk about
wildfires for a minute. I live in a state where two thirds of
the land is owned by the Federal Government. The Federal
Government is good at many things. It is not as good as some
others are at managing large wooded properties, and at times it
has allowed for an excessive accumulation of growth to build up
that provides fuel for wildfires. When left untamed, those
wildfires can become deadly. They can also become toxic for the
environment in a way that takes decades if not centuries to
recover from. What do you think are the biggest hurdles to
effectively and actively managing our nation's federal lands so
as to prevent these massive wildfires from destroying habitats
and watersheds, destroying air quality and water quality, and
even lives and livelihoods across the West?
Ms. MacGregor. Thank you, Senator, for that very important
question. Wildfire, as I said earlier, is on my mind quite a
bit and my trip to Paradise, California, last year is still
with me. Like you said, different states have different
analyses on the dead and dying timber that is in their forests.
And also depending on a wet or dry year, it could be the
grasslands. For instance, California, I think the Forest
Service with the state estimated that there are 129 million
dead and dying trees. I know it's a big deal in Colorado with
the pine bark beetle. So I think addressing invasive species
actually comes to play but also getting in and being able to
conduct salvage sales. Clearing out the dying timber,
especially in proximity to homes is important.
Senator Lee. Collaboration with states seems to go a long
way toward addressing the wildfire risk. States in the past,
including and especially in my own state, have done a lot to
identify--sometimes years, sometimes decades in advance--
wildfire risk that could be nascent, inchoate at the time and
building into something that is much more clear and present.
And so when the federal counterparts to these state agencies
issue warnings and encourage the federal agencies involved to
take action, that can be helpful.
This is also important just with land use planning,
generally with the resource management planning process,
collaboration is an important thing. The Department of the
Interior has had a mixed record over the years in terms of its
collaboration with state officials. At times--I mean, it always
at least pays lip service to the idea that state collaboration
is a good thing. Fortunately in this Administration, this
Interior Department under President Trump has been very good
about collaborating with state officials and local officials. I
hope and expect that if you were confirmed, you would be an
important part of making sure that that trend continues within
the Department.
Ms. MacGregor. Absolutely, sir. And to your point on
wildfire, we have worked very closely with states to implement
Good Neighbor Authority in our Rural Fire Readiness program. We
give away excess equipment to states. We all fight fire
together. That is really important. On resource management
plans, I think one of the big frustrations is how long it
takes. And you could see different employees come and go in a
state before you actually finish a Resource Management Plan,
which often travels along with NEPA analysis. So we are trying
to do our best to not only incorporate the views of local
communities, work with the Governors, but also do so in a more
prompt manner.
Senator Lee. Thank you. Under the Antiquities Act, the
President of the United States has tremendous discretion to
designate federal land as a National Monument. Previous
administrations have made a commitment. Sometimes that
commitment has been honored, sometimes it hasn't, that they
would not designate a monument within a state without previous
consultation with state and local officials and getting their
buy-in to the greatest extent they can and not making the
monument in the event of widespread local opposition. I assume
you share that view?
Ms. MacGregor. We would work to implement that, sir.
Senator Lee. Madam Chair, I have got a few seconds left.
May I ask one question of Mr. Danly?
The Chairman. Yes.
Senator Lee. Mr. Danly, can you just describe for us
briefly what you view is the limitations on FERC's jurisdiction
and what your vision would be as a Commissioner for FERC's
relationship with Congress and FERC's relationship with policy
in this area relative to Congress?
Mr. Danly. That is a big question, Senator, so thank you.
Senator Lee. It was either going to be that or why do bad
things happen to good people but that was easier.
[Laughter.]
Mr. Danly. The Supreme Court has said that agencies are
creatures of statute, they have no common law existence outside
the powers delegated by Congress. So I think the single most
important thing to say is that the Commission is a body and
individual Commissioners are bound to honor the terms of the
statute. Of course, the ones that we implement are the Federal
Power Act and Natural Gas Policy Act and the Interstate
Commerce Act for oil pipeline rates. And that is the sine qua
non of the proper role of FERC. It is the statutory ambit and
restricting its actions to those specifically delegated powers.
Senator Lee. Thank you very much. Thank you, Madam Chair.
The Chairman. Thank you, Senator Lee. Senator Cantwell, you
are up. Senator King has been very patient, but he likes to ask
the last question. I know that.
Senator Cantwell. Thank you. Thank you, Madam Chair. Ms.
MacGregor, again, congratulations on your nomination. You can
imagine I have a lot of concerns about all the news related to
ANWR. Do you know anything about the objections to Arctic
drilling by Fish and Wildlife scientists?
Ms. MacGregor. Our role in creating a leasing program for
the Coastal Plain is directed by law, and we are doing our
level best to implement that law.
Senator Cantwell. So are you saying you do not know
anything about what Fish and Wildlife scientists are saying?
Ms. MacGregor. I know that the Bureau of Land Management
and the Fish and Wildlife Service are working closely to ensure
a--and have recently published an environmental impact
statement on that particular program.
Senator Cantwell. Will Arctic drilling harm or kill
endangered polar bears?
Ms. MacGregor. That biological opinion is not yet final,
and we are waiting to review that.
Senator Cantwell. So you dispute what scientists are saying
in that regard?
Ms. MacGregor. I believe that ultimately the law speaks to
our conduct in the Coastal Plain. It has directed us to conduct
an oil and gas program.
Senator Cantwell. Can the Interior Department still offer
Arctic drilling leases in 2019?
Ms. MacGregor. How do you mean?
Senator Cantwell. Well yesterday there was a report saying
they were not going to offer any more leases in 2019. So I am
just trying to clarify, can the Interior Department still offer
those?
Ms. MacGregor. So thank you for the question. We have
currently published the final Environmental Impact Analysis.
The next steps in that process are to finalize the biological
opinion from the Fish and Wildlife Service and then to sign a
record of decision prior to any leasing. And we are still
working on that.
Senator Cantwell. So it should not be a surprise to anybody
in this whole process, we have been clear, we did not think
that a wildlife refuge and oil drilling were consistent with
each other and we were clear that we thought that would not
hold up. But we are very concerned about your nomination if you
are not going to consider the information from scientists about
the harm to that wildlife. So we are going to continue to be
persistent on that. And if there is anything else that you can
clarify for the record, but we want to know that you are
recognizing what scientists have already said.
Mr. Danly, I know my colleague, Senator Heinrich, has
already asked you about this issue of is coal a reliable source
of electricity that has to be forced onto the grid which would
raise prices for a lot of Midwest consumers and others. And I
understand that you told him that you agreed with the previous
decision. Is that correct?
Mr. Danly. Thank you for the question, Senator. The FERC is
not in the business of picking winners and losers and never has
been. The objective that we have in regulating our markets is
trying to get the most accurate possible price signals to
ensure just and reasonable rates.
Senator Cantwell. So one thing is really clear. Obviously,
you have great familiarity with the law being the General
Counsel there. Do you see some scenario in which that 5-0
decision language could be revised in which somehow someone
could make the case that yes, this particular source should be
mandated in the mix?
Mr. Danly. I suppose it is theoretically possible to come
up with a hypo where that would be the case, but you have to
remember that there are any number of emergency authorities. We
have, I don't think there are very many, maybe two or three
RMRs--those are our reliability must-run agreements--for plants
to keep reliability in a couple of the RTOs. I think one in
MISO and CAISO right now. There are powers the Secretary has in
cases of dire emergencies under 202(c). If there were something
like that that was acute, that would be a way to handle an
emergent issue. But for the stability of the system generally,
the wisest policy is to achieve the most accurate possible set
of prices and to have the market forces follow their
ineluctable process of ensuring the best resources.
Senator Cantwell. So the emergency clause is the only thing
you can think of that would be an issue?
Mr. Danly. Yeah, I can't really think of anything off the
top of my head right now that would be--FERC's commitment to
market-based solutions has been, I think, pretty obvious for
the last two decades, regardless of who has been in the
Majority. The markets have been the centerpiece of our----
Senator Cantwell. I only have 30 seconds----
Mr. Danly. Oh, I'm sorry.
Senator Cantwell. ----but I just wanted to get you on the
record on in enforcing that market authority, one of the things
I think has been key is having a strong bright line on anti-
manipulation. Do you believe in FERC's fraud and market
manipulation provisions?
Mr. Danly. Policing the markets and insuring against market
manipulation is absolutely critical to ensure that market
participants have faith in the markets such that the incentives
that the markets create can actually be responded to. In the
absence of that certainty, we can't incent the activity that we
want.
Senator Cantwell. Thank you. Thank you, Madam Chair.
The Chairman. Thank you, Senator.
Senator Hyde-Smith.
Senator Hyde-Smith. Thank you, Chairwoman Murkowski, for
convening this nomination hearing and I certainly want to
congratulate Ms. MacGregor and Mr. Danly on your nominations to
these very important positions for both of you. I have had the
pleasure of meeting with both of them and found them to be
extremely smart, energetic, and so ready for the positions and
prepared for the positions they are about to embark upon.
Mr. Danly, I certainly want to thank you again for the
military service that you have provided to our country. The
Federal Energy Regulatory Commission and the Department of the
Interior have important responsibilities in Mississippi. For
instance, energy production is an important economic driver for
my state, particularly the tremendous amount of oil and gas
production in the Gulf of Mexico. We are proud of the 8
national parks and 15 wildlife refuges in Mississippi. The
refuges draw hundreds of thousands of visitors each year, and
it certainly helps our tourism in Mississippi bringing these
people in with such a wonderful experience.
In addition, I want to recognize the important work that is
done by the Department of the Interior's U.S. Geological
Survey, particularly the hydrologic instrumentation facility at
Stennis Space on the Mississippi Gulf Coast that I toured just
recently. Ms. MacGregor, one issue that has drawn a
considerable amount of attention in recent months is the
catastrophic flooding in the Mississippi Delta. Hundreds of
thousands of acres of land were underwater for more than six
months, affecting so much of our farming operation,
agricultural land, timberland, wildlife habitat, and of course,
our homes and our communities, and churches and schools.
Included in the flooded area were a number of national wildlife
refuges with more than 100,000 acres of prime wildlife habitat.
I want you to be aware of the significant damages that have
occurred as a result of almost annual flooding events over the
past decade and the historic flood disaster that we certainly
suffered this year. I recognize flood reduction is not Interior
Department's primary mission, but I hope you will recognize the
impact of those damages and the need for an environmentally
sustainable flood reduction solution.
Also, I am eager to continue the progress we have made on
finding solutions to address the bird predation losses for
aquaculture and our livestock. We raise a lot of catfish in
Mississippi. We are the number one catfish state in production.
In addition, I am very interested in continuing the work
with your Agency to allow agriculture producers to use all
federal registered seeding and crop protection products and
farming operations on the lands that you do oversee.
Again, thank you both for your willingness to serve, and I
look forward to working with both of you as you develop
policies to protect and strengthen our nation's energy and
natural resources. I think you both would do a fantastic job.
Mr. Danly. Thank you.
Ms. MacGregor. Thank you, Senator.
The Chairman. Thank you, Senator.
Senator King.
Senator King. Thank you, Madam Chair. Ms. MacGregor, in
your answers to Senator Alexander at the beginning, I was a
little concerned. He asked you, do you support the Restore Our
Parks Act and you said we support helping the parks. Do you
support the Restore Our Parks Act?
Ms. MacGregor. We support those bills, yes.
Senator King. Thank you. I just wanted to be clear. We are
not--there is no retrenchment of the Administration's support
for this bill?
Ms. MacGregor. Sir, no. I believe there are some variations
between the House and Senate bill and we want to work with you
as you separately move those pieces of legislation forward.
Senator King. Thank you.
On offshore drilling I was delighted to hear your answer to
Senator Lee's question about collaboration and cooperation with
state officials. In the State of Maine, our legislature, our
governor, and our entire Congressional delegation are adamantly
opposed to offshore drilling off our coast. Will you take the
same view of the importance of collaboration with state
officials in that situation?
Ms. MacGregor. Absolutely, sir. 43 U.S.C. 1344 is where we
get direction on the administration of the leasing program, and
it requires our work with the governors in the state and local
governments.
Senator King. And you will absolutely respect that
provision?
Ms. MacGregor. We will absolutely work every step of the
way. We shall work as directed in the law.
Senator King. Are there any plans for drilling or
exploration off the New England coast today?
Ms. MacGregor. I think the Secretary's statement that a
five-year plan is not imminent right now is correct. We are
evaluating the impact of separate litigation on that program.
Senator King. In government time, I suspect not imminent
maybe means we are okay for the rest of this century. I
appreciate that. On the question of fossil fuels and there is
some discussion with you, with several Senators. I was at a
scientific briefing yesterday that presented a graph that
really shocked me. I had not really thought about it before. We
always talk about fossil fuels in terms of climate change and
the effect of CO2 in the atmosphere, but the other
thing is in the space between our grandparents' birth and our
grandchildren's death we are going to use up essentially all
the fossil fuel but it took hundreds of millions of years on
this planet to create.
I just offer that as a thought forgetting about the
environmental effects, which are severe, but the very fact that
in a sense our generation, our memory of generation is using up
something that is a finite resource on the planet, I find
disturbing. As we go into Thanksgiving, I think of dad sitting
at the end of the table, the turkey comes, all the kids are
sitting there, and dad says I am going to eat all of it. And
that is what we are doing. I think that is unconscionable from
the point of view of simply stewardship of a resource let alone
environmental stewardship. There is not a question there, but
that was something I thought was important.
Budget changes. In your budget of your Department, the
Bureau of Ocean Energy Management (BOEM), there is a $1 million
reduction in renewable science and technology research and an
$8 million increase in what is called conventional energy
budget. Why in the world at a time of concern about extra
utilization and over utilization of fossil fuels are you
cutting research on ocean energy development?
Ms. MacGregor. Sir, in formulating the budget we worked
with the Bureau of Ocean Energy Management. I would point out
that renewable energy is still an important part of the mission
of BOEM. I have personally been working on a potential offshore
California wind sale. We are working within the confines of our
budget as it is provided.
Senator King. Well, I understand that but budgets--a wise
man once said budgets are policy and when a budget cuts in one
area increases in another area, that is almost a billion
dollars of offshore energy research. It seems to me that is a
statement of policy that this is not a high priority for this
Administration.
Ms. MacGregor. This remains a priority in our statutes as
well for BOEM, and we are working closely on all permitting and
leasing that we can achieve for offshore wind energy.
Senator King. Mr. Danly, FERC has taken steps in the past
to reduce barriers for distributed energy resources (DERs),
storage, and the like. You have taken a rather, I do not know
what to call it, balls and strikes position, a conservative
``we don't have the jurisdiction to be making policy'' kind of
position. How do you feel about those efforts to, I believe,
recognize the value of DERs and storage to the security and the
efficiency of the grid?
Mr. Danly. Thank you for the question, Senator. So without
getting into the specifics of either of those two possible
resources----
Senator King. I am really looking for your feelings about
the concept of incorporating these kinds of resources into the
grid.
Mr. Danly. So as I mentioned in my opening statement, I
think one of the most amazing things about FERC is that it is
administrating a century old statute and in the process is
overseeing dramatic transformations of the electricity system.
And I would certainly hope to see FERC continue to do that sort
of work. Things like--technologies like storage provide a
tantalizing glimpse into what the future of the electric system
could be and I think it is incumbent upon FERC--in our
discharging of its duties to ensure just and reasonable rates,
it is incumbent upon FERC to try to allow as many of those
technologies as possible as much access to the system as we
can.
Senator King. I appreciate that and I appreciate your work,
but I think the important thing is that the values have to be
in the equation, the intangible values, and I think that is an
important part. Thank you very much for your testimony.
Thank you, Madam Chair.
The Chairman. Thank you, Senator.
Senator Hoeven.
Senator Hoeven. Thank you, Madam Chairman. Ms. MacGregor,
if confirmed, will you work with us to fill BIA law enforcement
officers in the Great Plains area? We have a real need for law
enforcement officers particularly throughout the upper Great
Plains on the reservation. Will you help us work to fill those?
Ms. MacGregor. Sir, absolutely. We will work with you on
BIA law enforcement writ large.
Senator Hoeven. And I want to thank you for visiting with
me earlier. I appreciate it. We also talked about the Red River
Valley water supply project. Are you willing to help us in that
regard?
Ms. MacGregor. Yes, sir. We will work with you.
Senator Hoeven. Also, you are committed to producing more
energy on federal lands and tribal lands. I mean, you know
tribes are sovereign but a lot of them want to produce more
energy, some traditional, some renewable. Are you committed to
do both?
Ms. MacGregor. We are and that has been a highlight, I
believe, of our Fiscal Year. Even on tribal energy, we have
increased revenues and production.
Senator Hoeven. Talk for a minute about how we can expedite
the permitting process on BLM lands or federal lands and also
working with tribes. How do we make sure that, you know, we do
it right, we do it well, but we get through it? I mean this is
about encouraging entrepreneurship and investment, creating
jobs and economic opportunity, willing to do it with good
environmental stewardship. We do not want red tape, we want a
good process. How do we do that?
Ms. MacGregor. Sir, that I know is important to your state,
to Wyoming, to New Mexico, and many states, and it isn't just
for permitting oil and gas. Permitting writ large, for
instance, if you wanted to permit rural communications towers
for broadband, it has to go through a permitting process. And I
think we are learning efficiencies through every branch and
many ways through the Bureau of Land Management. When we
started at Interior, the average permitting timeframe for an
APD was roughly 257 days, and through simply using
accountability, working with state offices, filling vacancies
in some cases, we have been able to bring that permitting
timeframe down to right now 108 days, and it varies in
different offices. The statute requires us to do it in 30 days.
That is pretty difficult. But we are going to work to make and
utilize ways to make permitting more efficient.
Senator Hoeven. Good, thank you. Again, I know Senator King
asked you about the Restore Our Parks Act and you are committed
to that, I think, as we have discussed. I think you responded
to him.
Ms. MacGregor. Yes.
Senator Hoeven. And also in Theodore Roosevelt National
Park, you and I talked and this is again more parochial, our
issue but, you know, we have a road failure out there, mission
critical, and we need your help with that. We have discussed
that.
Ms. MacGregor. We want to absolutely help you and work on
that road. Of the backlog, most of our backlog for National
Park Service is our roads. And I think it is 100,000 miles of
roads. So we have a lot of work cut out for us, and we
appreciate the bipartisan support we have been getting on
dealing with that backlog.
Senator Hoeven. Thank you. I appreciate it.
Mr. Danly, we need to do something in regard to baseload
generation as far as transmission. You have baseload that is
there. I am thinking that the Ranking Member probably brought
it up because he has a lot of coal in his state just as we do,
and we have to have something that addresses the fact that coal
is there, you know, 24/7 on the coldest day, the hottest day,
when the wind blows, when it does not blow.
In a lot of cases, they built that transmission and other
types of energy have a preference on the transmission that they
have built. What do we do to make sure that we are treating
baseload fairly and that we have that energy available when we
need it in terms of the transmission, the grid and, you know,
the ability to use it and so forth?
Mr. Danly. Thank you, Senator. So as you are aware, FERC's
jurisdiction extends to the transmission rates. Of course, not
the actual siting or construction----
Senator Hoeven. Right. And that is what I am getting at.
Mr. Danly. Yeah. And so the proper--not the proper tool, in
fact, the only tool available to the Commission to encourage
build-out of transmission infrastructure is in the rates
scheme.
And I take your point very seriously that there could be
assets that are effectively stranded on the transmission system
that have plenty of power that they could produce. They could
be in the blank otherwise and because of the constraints on the
transmission system, they are simply out of luck and nobody is
able to benefit from the dispatch of those units. This is one
of the considerations that is always taken into account when
new transmission projects are either being proposed or planned.
And so it comes down to FERC's oversight of the transmission
rates.
Senator Hoeven. I am not sure though if that was a yes or
no.
Mr. Danly. I am not sure what the yes or no question was.
Senator Hoeven. We need something that takes into account
the fact that the baseload is there all the time and right now
some of the variable systems have preference in terms of the
rates and access on transmission lines. And we have to do
something to address that. Do you agree with that?
Mr. Danly. I agree that the transmission system has to be
designed and operated for the purpose of ensuring the best
possible dispatch of the most efficient units. And those units
are in many cases what you are terming baseload.
Senator Hoeven. Do you think, based on your experience, you
have the ability to help us solve this issue with baseload?
That we can come up with some good solutions and that you can
be part of that?
Mr. Danly. I would be delighted to assist in working on any
of this----
Senator Hoeven. You are committed to working on it. And you
recognize there is a challenge that has to be dealt with?
Mr. Danly. Absolutely. The transition from the old dinosaur
era of vertically integrated utilities to these to the rightist
cacophony of the current market system has been a challenge and
there are many problems that have arisen along the way. But I
would argue that the electric system is better for it, and I am
happy to work on any of the subjects with you.
Senator Hoeven. Yes, and one other question. Are you
willing to ensure that states and local shareholders maintain
the ability to make decisions over distribution and that you
would be responsive to them in that regard?
Mr. Danly. Distribution is firmly placed within the hands
of the states under the FPA, and I support that.
Senator Hoeven. Okay. Thank you. Thank you, Madam Chair----
The Chairman. Thank you, sir.
Senator Hoeven. ----and to the Ranking Member too. I
certainly would not want to leave him out.
The Chairman. Yes, do not leave him out. Do not leave him
out. I just have a few, perhaps a little more parochial,
questions. Ms. MacGregor, you and I spoke about some of this
earlier, but we have a very unique relationship between Alaska
tribes and the Federal Government following the Alaska Native
Claims Settlement Act (ANCSA). Because of ANCSA, as you know,
there is almost no Indian country or reservation land in the
state. We are now approaching the 50th anniversary of ANCSA's
enactment, but many of the commitments that were made by that
law are yet to see fruition. So I just need to know that you
will continue to work with us to ensure that the Federal
Government's commitments to Alaska Natives under ANCSA are met.
Ms. MacGregor. Absolutely, Senator. And we have a
consultation process in place at the Department when it comes
to ANCSA corporations, and we are implementing them.
The Chairman. Well I appreciate that because as we hear far
too often, there are many back home who feel that consultation
is seemingly a check the box exercise and it needs to be
meaningful consultation. Some agencies are better than others
but, again, I am seeking your commitment to ensure that it is
true and meaningful consultation.
I mentioned the Public Land Orders, section 17(d) of ANCSA,
gave the Secretary of the Interior the authority to withdraw
lands for further study and reclassify them for use in the
public interest. It was smart at the time when the selections
were being made. The problem is that now, some 50 years later,
much of this land remains withdrawn and has yet to be
reclassified. There have been some PLOs that have been lifted
in this year. We appreciate that. We know that there is more
work to be done. Again, I am just seeking your commitment to
that and that we continue in that vein and work to complete
some of these PLOs.
Ms. MacGregor. Yes. We will work with you on those.
The Chairman. Last one, and this should be a no-brainer. It
just stuns me that we are still arguing, going back and forth,
regarding the Gustavus Hydro Intertie-Connection project with
National Park Service at Glacier Bay National Park. This is
something that is so easy. It should have been such a win-win.
It gives clean affordable energy to Glacier Bay National Park,
it helps the community of Gustavus out. It is something that
should have been done years ago and I am told we are always
getting closer, but I need to know that we are going to keep
this project on track and get this contract awarded. So if you
can just make sure that that is being bird-dogged
appropriately.
Ms. MacGregor. Senator, strong renewable hydropower is
important to the Department, and we will work with you on that.
That is the first I am hearing of this project, so I will look
into it.
The Chairman. It won't be your last. Lucky you. Thank you
for that. I had really hoped I would never have to raise it
again to anybody within Department of the Interior because,
again, it is something that we have been working on for a
decade plus and it really is----
Ms. MacGregor. I wrote it down.
The Chairman. Very good. Thank you. We appreciate that. We
invite you out to Glacier Bay National Park.
Mr. Danly, in the Southeastern part of the state, Alaska
hydropower is everything for us. It is about half of our power
generation, and we are proud of what we do and how we do it. As
I look through and as we have conversations about the role that
hydropower plays, it continues to amaze me that we are in this
process that approvals for issuing either new licenses or
relicensing existing dams can take over a decade, can cost tens
of millions of dollars. We received testimony here in the
Committee that obtaining a license renewal routinely exceeds
$20 million per license with some proceedings topping $50
million. Again, these are renewals.
And so we hear in the Committee that some of the costs and
the delays are due to lack of coordination among FERC and the
resource agencies--sometimes redundant reviews at the federal
and state levels. So this is a matter that we are looking at
critically here in the Committee. And as an add-on to that, we
have also had an opportunity to focus on hydropower pump
storage and recognition that 95 percent of energy storage in
the U.S. and globally with 44,000 megawatts of proposed
projects are before the FERC right now in the preliminary
stage. So you are looking at a double of U.S. pump storage
capacity.
As we are looking to what we can be doing to make this
process a better process and FERC's role in it, I would ask
that you consider and perhaps you have some impressions you
would like to share with me right now about how the hydropower
licensing process can be improved and whether or not you think
the hydropower and the pump storage projects are being properly
valued and fairly compensated for the grid reliability services
that they provide?
Mr. Danly. Thank you for the question, Senator. One of the
most important functions we have is permitting infrastructure
of various types, this includes the section 1 responsibilities
for hydro. And it is absolutely essential that the Commission
do everything it can to expeditiously review all of the
applications that it has in front of it. It has been an ongoing
issue that has been raised many times, how long it takes for
hydro to be approved. And part of that is that there have been
historical frictions in getting coordination.
Also, these are very significant projects that have their
dire consequences for bad oversight and so the i's are dotted
and t's are crossed, and that is just part of what is going to
have to happen in any hydro licensing regime. But I am
absolutely dedicated to the most expedient possible review of
every application in front of us, and I would be delighted to
work with you on that should I be lucky enough to be confirmed.
The Chairman. Well, I would like to explore it a little bit
more in detail because as you mentioned that yes, some of these
projects are really significant projects within their region. I
am taking it back to where I am from where we have smaller
hydro projects that really should not be as challenging as they
are, should not be as complicated and expensive. And so how we
can work to address that I think is a challenge for all of us.
Coordination with the agencies is something that--it just makes
good common sense to do it. So note that that is an area of
keen interest of mine, that and what we are doing to help
facilitate the hydro pump storage as well.
Senator Manchin.
Senator Manchin. Thank you, Madam Chairman. And thank you
all. It has been a very good hearing. I think you had a good
exchange. You had a little lively audience participation.
[Laughter.]
So it has all worked out well. With that, I just have two
final questions.
Ms. MacGregor to you. I introduced a bill to extend the
Abandoned Mine Land (AML) Reclamation Act for another 15 years,
and I think you are familiar with AML. Basically $11 billion
has been collected in its life over the last 15 years, and we
have about $10 billion of identified reclamation that needs to
be done and that comes from the fee on extraction of fossil, of
coal, and we are asking for that. I do not know what your
position would be on that. Do you support us?
Ms. MacGregor. Sir, I am from the Commonwealth of
Pennsylvania. We have some Appalachia too. It is really
important. A lot of the AML projects are also funded in the
State of Pennsylvania. So I know that Congress is working on
reauthorizing that program, and we will work with you on that.
Senator Manchin. So you support extending the fee for
another 15 years, if possible?
Ms. MacGregor. We will work with you on AML.
Senator Manchin. I understand. Well, we need your help. We
really do. If you can just basically identify the good it has
done and why the fee is needed. If not, the money will be
replaced somewhere, and now it comes from the extraction so the
industry is paying for itself. It makes a lot of sense not to
put the burden on the average taxpayer.
Ms. MacGregor. We absolutely think AML is an important
program, and we want to work with you on that.
Senator Manchin. Thank you.
Mr. Danly, security of the electric grid has a great
importance to me. I have sat on the Intel Committee before, so
I know the threats that we receive minute-by-minute to our
country. I had the privilege of going out and seeing the attack
on the Saudi Aramco oil refineries and seeing how it could have
disrupted the whole oil and energy industry for our whole
globe.
With that, I am a proud co-sponsor on the PROTECT Act with
Senator Murkowski. The PROTECT Act, as you know, would require
FERC to issue rulemaking establishing rate incentives to
encourage cybersecurity. So rate incentives, we are all paying
basically, but we understand that the security and the cyber
threat that we face could be very damaging to all of us. What
do you see FERC's role to be with respect to protecting the
grid from cyber? Do you think it is a real threat, a concerted
threat that we could be alleviating or minimizing?
Mr. Danly. Thank you for the question, Senator. Yes,
cybersecurity threats are truly, truly important, and the scope
of the threats faced are sobering. We have, as you are aware,
limited processes to make mandatory standards and when it comes
to a field like cyber, the rate at which the NERC process,
which is the liability process, the rate at which a NERC
standard comes out, you know, 18 months to 2 years for anything
when it comes to the world of cyber, it's already ancient
history. And so what FERC does to try to bridge that gap is we
have an Office of Energy Infrastructure Security which does
best practices and architectural reviews and the like in order
to enhance the awareness of the jurisdictional utilities to the
threats. As to the question of ratemaking, I am all for
Congress having specific subjects that it wants to direct
ratemaking on and, in fact, sometimes in the past FERC itself
has done single-issue ratemaking--immediately after 9/11. I do
not remember the exact date of the issuance, but single-issue
ratemaking was explicitly contemplated by the Commission for
the purpose of physical security. So as far as that goes as a
ratemaking regime, I have no objection to it whatever.
Senator Manchin. Well on this, the thing that amazed me is
the attack on Aramco. Have you all seen the news reports on
that? There is no doubt where the attacks came from. Every
missile hit from the North and then hit from the South. With
that being said, I asked Aramco officials, I said, are you all
concerned about espionage and how someone would have this
pertinent information and the coordinates to do the damage they
have done? He looked at me and he said, ``That is a
consideration. We do a very extensive job as far as reviewing
any of our employees and we understand that, but we cannot
compensate for Google Maps.'' And I said, what? And he said
``Google Maps.'' He says Google Maps are so precise that they
were able to get all their information off those. I kept
thinking about our cyber vulnerability, because I can assure
you it does not take much to take us down.
If that can be done, can you imagine what could be done to
this great country? So I am concerned about that very much, and
I would hope that you would be supportive of the PROTECT Act.
When it comes to the importance of cyber, because of the
challenges we are facing, and what we are facing every day from
terrorist threats, something as vulnerable as that, it could be
catastrophic to our country. I would hope that you all will
consider that protection, as well as we talked about Ms.
MacGregor on yours. Those are very, very critical. AML, cyber,
two big things.
Mr. Danly. Absolutely. I think it is very important.
Senator Manchin. Thank you all for being here today.
The Chairman. Thank you, Senator Manchin. Before we wrap
up, I want to say a few words about somebody who is going to be
leaving my team here on Energy. We have had a gentleman who has
been with the Committee now for about eight years, Chester
Carson. Chester is not here. He probably knew that we were
going to say something about him, but Chester comes from
Juneau, Alaska. I am not quite sure how we were able to lure
him here to Washington, DC, but he came not only to the
Committee but he was one who started out as an Executive
Assistant before he moved into the comms shop and then he went
from comms to full-time policy advisor.
So when you think about those who really rise through the
ranks, Chester is one of those. He has been my lead on so many
of the issues that we have actually been talking about here
today--renewables, efficiency, climate, tribal energy. He has
made some significant contributions to the Committee, and he
has done so with enthusiasm and a smile on his face. I am not
quite sure what has struck him, but this young man from Alaska
has decided that Hawaii is now calling to him. So he moved from
Alaska to DC to now Maui. We wish him all of the aloha and
mahalo for the work that he has done. But I wanted to be able
to acknowledge him here before the Committee.
I want to thank both of you this morning. This has been a
good hearing. I think you have seen very personally the level
of interest from so many of the members on the Committee. We
had really strong attendance here this morning, a morning when
quite honestly, we are not set to have votes for a little bit.
Usually you have a lot of people that are still traveling on a
morning like this, but I think they made a special effort to be
here.
I think both of you provided good strong information to the
Committee on important issues that we care about, that you care
about. You have clearly demonstrated your competence in your
fields, the depth of knowledge, and really, your willingness,
your desire to serve at the Department of the Interior and at
the Federal Energy Regulatory Commission.
So I thank you for not only being here this morning, but I
thank you for your respective leadership. I thank you for
bringing your friends and family here to support you. We know
the jobs that we all have are tough jobs, and they are made a
little bit easier when we have those that are loyal always.
We thank you for joining us, and we thank you all again for
your commitment. With that, the Committee stands adjourned.
[Whereupon, at 11:57 a.m., the hearing was adjourned.]
APPENDIX MATERIAL SUBMITTED
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