[Senate Hearing 117-276]
[From the U.S. Government Publishing Office]
______
S. Hrg. 117-276
HEARING TO REVIEW THE RECENT ACTIONS
OF THE FEDERAL ENERGY REGULATORY
COMMISSION RELATING TO PERMITTING,
CONSTRUCTION, AND OPERATION OF INTERSTATE
NATURAL GAS PIPELINES AND OTHER NATURAL
GAS INFRASTRUCTURE PROJECTS
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
__________
MARCH 3, 2022
__________
[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
47-754 WASHINGTON : 2024
COMMITTEE ON ENERGY AND NATURAL RESOURCES
JOE MANCHIN III, West Virginia, Chairman
RON WYDEN, Oregon JOHN BARRASSO, Wyoming
MARIA CANTWELL, Washington JAMES E. RISCH, Idaho
BERNARD SANDERS, Vermont MIKE LEE, Utah
MARTIN HEINRICH, New Mexico STEVE DAINES, Montana
MAZIE K. HIRONO, Hawaii LISA MURKOWSKI, Alaska
ANGUS S. KING, JR., Maine JOHN HOEVEN, North Dakota
CATHERINE CORTEZ MASTO, Nevada JAMES LANKFORD, Oklahoma
MARK KELLY, Arizona BILL CASSIDY, Louisiana
JOHN W. HICKENLOOPER, Colorado CINDY HYDE-SMITH, Mississippi
ROGER MARSHALL, Kansas
Renae Black, Staff Director
Sam E. Fowler, Chief Counsel
Brie Van Cleve, Senior Energy Advisor
Armando Avila, Senior Professional Staff Member
Richard M. Russell, Republican Staff Director
Matthew H. Leggett, Republican Chief Counsel
Justin Memmott, Republican Deputy Staff Director for Energy
Patrick J. McCormick III, Republican Special Counsel
James Bartholomew, Republican FERC Detailee
C O N T E N T S
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OPENING STATEMENTS
Page
Manchin III, Hon. Joe, Chairman and a U.S. Senator from West
Virginia....................................................... 1
Barrasso, Hon. John, Ranking Member and a U.S. Senator from
Wyoming........................................................ 4
WITNESSES
Glick, Hon. Richard, Chairman, Federal Energy Regulatory
Commission..................................................... 6
Danly, Hon. James, Commissioner, Federal Energy Regulatory
Commission..................................................... 22
Clements, Hon. Allison, Commissioner, Federal Energy Regulatory
Commission..................................................... 28
Christie, Hon. Mark C., Commissioner, Federal Energy Regulatory
Commission..................................................... 35
Phillips, Hon. Willie L., Commissioner, Federal Energy Regulatory
Commission..................................................... 40
ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED
Barrasso, Hon. John:
Opening Statement............................................ 4
Christie, Hon. Mark C.:
Opening Statement............................................ 35
Written Testimony............................................ 37
Responses to Questions for the Record........................ 252
Clements, Hon. Allison:
Opening Statement............................................ 28
Written Testimony............................................ 30
Responses to Questions for the Record........................ 237
Consumer Energy Alliance:
Letter for the Record........................................ 110
Danly, Hon. James:
Opening Statement............................................ 22
Written Testimony............................................ 24
Responses to Questions for the Record........................ 139
Glick, Hon. Richard:
Opening Statement............................................ 6
Written Testimony............................................ 8
Responses to Questions for the Record........................ 119
Industrial Energy Consumers of America:
Comments for the Record...................................... 106
Interstate Natural Gas Association of America:
Letter for the Record........................................ 89
Manchin III, Hon. Joe:
Opening Statement............................................ 1
Millenium Pipeline Company, LLC:
Letter for the Record........................................ 113
Our Children's Trust:
Letter for the Record with attachments....................... 282
Phillips, Hon. Willie L.:
Opening Statement............................................ 40
Written Testimony............................................ 42
Responses to Questions for the Record........................ 269
TC Energy Corporation:
Letter for the Record........................................ 96
TC Energy Corporation et al.:
Letter for the Record........................................ 101
U.S. Chamber of Commerce:
Letter for the Record........................................ 85
WBI Energy Transmission, Inc.:
Letter for the Record........................................ 114
(The) Williams Companies, Inc.:
Letter for the Record........................................ 52
HEARING TO REVIEW THE RECENT ACTIONS
OF THE FEDERAL ENERGY REGULATORY
COMMISSION RELATING TO PERMITTING,
CONSTRUCTION, AND OPERATION OF INTER-
STATE NATURAL GAS PIPELINES AND OTHER
NATURAL GAS INFRASTRUCTURE PROJECTS
----------
THURSDAY, MARCH 3, 2022
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. Joe Manchin
III, Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. JOE MANCHIN III, U.S. SENATOR FROM
WEST VIRGINIA
The Chairman. The Committee will come to order.
Before we begin, I would like to acknowledge two members of
my staff whose time on the Committee is coming to a close. The
first is Amanda Hoffman. Amanda has been with us for a year, on
loan from the Bureau of Land Management, and will be returning
to her home base in Idaho. Her expertise and hard work have
been integral to our work on public lands issues and
legislation. She brings a wealth of knowledge and is very,
very, very helpful to us. The other is Armando Avila. Armando
has been our expert on fossil fuels, carbon capture, carbon
management, and hydrogen for the past two years. In that time,
he worked to ensure that the Energy Act of 2020 and the
Bipartisan Infrastructure Law advanced these critical
technologies. Armando came to us from the private sector, and
that experience has been invaluable to our team. His last day
is next Friday. So I wish both Armando and Amanda well and
thank them for their service to all of America and to my State
of West Virginia. Thank you. Stand up.
[Applause.]
The Chairman. Okay, Amanda is watching us, so, Amanda,
thank you so much.
Now, today's hearing is about the recent actions taken by
the Democratic Commissioners on the Federal Energy Regulatory
Commission, which, in my view, serve to elevate environmental
considerations above American energy reliability, security, and
independence. While I am aware of the fact that the D.C.
Circuit ruled that FERC needed to adequately consider
greenhouse gas emissions, I believe very strongly that the new
policy statements overshoot what was necessary in the national
interest. I believe you all took the direction from the court
and applied it far more broadly than you needed to, setting in
motion a process that will serve to further shut down the
infrastructure that we desperately need as a country and
further politicize energy development in our country.
So I want to thank all five Commissioners for being here
today to answer for your actions. But let me take a step back
because this decision, along with several other recent
decisions made by the courts at the state level and in other
political arenas, represents a shortsighted attack on fossil
fuel resources without recognizing the heavy lifting they have
done and continue to do and the integral role they play in our
economy going forward. In my view, there is an effort underway
by some to inflict death by a thousand cuts on fossil fuels
that have made our energy reliable and affordable, while also
providing us countless products and a vast strategic advantage
over our adversaries and benefit for our allies and our trade
partners. I have consistently fought back against anything that
puts our economy and energy security at risk under normal
circumstances--something we all agree on, but we are now at a
time of war, given Russia's invasion of Ukraine--a freedom-
seeking country. This is in many ways an energy war, and we
need to treat it with that kind of gravity. We cannot bring a
knife to a gunfight.
I tell you, in my lifetime, the only other time I have been
more concerned for our country--who we are, and the people that
we are--was as a teenager during the Cuban Missile Crisis. I
believe this is just as serious and can be further expanded. I
say that because I know what it can escalate to when we are
dealing with nuclear weapons and the threat of using them. We
cannot take this seriously enough. So to deny or put up
barriers to natural gas projects and the benefits they provide
while Putin is actively and effectively using energy as an
economic and political weapon against our allies is just beyond
the pale. If we could actually get natural gas infrastructure
built, it would not only help with the energy transition here
at home, it would also help keep costs down for American
families, create good-paying jobs, and strengthen our ability
to use energy as a geopolitical tool to fight for our values
abroad and support our strategic partners.
But it is not just the infrastructure that we need. We also
have to increase our domestic production or we will squander
this opportunity to help ourselves and others around the world.
While the international effort to displace some Russian oil
through release of Strategic Petroleum Reserves is warranted,
it is not a long-term fix. We sit on an ocean of energy in West
Virginia, my state, with nearly 214 trillion cubic feet of
untapped natural gas in the Appalachian Basin, a resource that
is even greater when you consider the rest of the United
States' reserves. But we cannot get our abundant natural gas
out of West Virginia with the roadblocks being placed in the
way of each project developer, and the impacts are felt by the
construction workers and the energy communities who need the
jobs and the tax revenues. That is just ridiculous. We have
tapped into these resources efficiently, with nationwide
production of natural gas reaching 34.1 trillion cubic feet in
2021. That is almost a 50 percent increase in the last decade.
However, since then, crude oil production has fallen almost 9
percent to 11.2 million barrels per day by 2021.
I understand that part of this impact is due to the
pandemic, but while demand has ramped back up, production has
not. That has driven up prices, but what is maddening is that
we are prolonging the high price pain on our American citizens
with unnecessary regulatory uncertainty and shortsighted
actions, like the ones that you all took two weeks ago. I
understand the projections of both crude oil and natural gas
are expected to grow in the short term, but that is heavily
dependent on favorable policies to allow for their efficient
development. Our issue is certainly not a shortage of energy
resources. It is a lack of support for the responsible
development and transport, but we also need industry to step up
to the plate and start producing instead of prioritizing their
profits over the good of our country. It makes no sense at all
for us to continue importing energy from Russia while they are
attacking a friendly nation seeking democracy and that the
whole world has rallied behind, nor does it make sense for us
to call on OPEC countries to increase production when we are
not willing to do it ourselves, despite our abundant resources.
That is why Senator Murkowski and I are introducing the Ban
Russian Energy Imports Act today, together with many of our
colleagues on both sides of the aisle--bipartisan. We have
Senator Dan Sullivan from Alaska here with us today, and I
appreciate you being here, Senator. This bill will prohibit
importation of Russian crude oil, petroleum, petroleum
products, LNG, and coal during this emergency. I stood by the
new Administration when they called for a pause on the federal
leasing programs last year. But the time for pausing has come
and gone, and despite a court ruling saying the same, the
Administration continues to drag its feet when it comes to
leasing on federal lands and in federal waters.
And let me be clear, I am in no way saying that we should
throw our efforts on climate change to the wayside. No way.
Without continuing to use all of our energy resources in the
cleanest way possible, we will simply lose an ability to
compete globally, as other countries plow ahead with their own
plans for fossil development. The oil and gas that we produce
is cleaner than what we are importing from Russia. That is a
fact. Our allies should take note and work with us to advance
technologies like carbon capture utilization and sequestration,
and clean hydrogen that will strengthen our energy security and
reduce global emissions. We also need to be deploying the
existing technologies that would reduce our own methane
emissions while also getting more product to market. For the
next several decades, fossil fuels will be part of our energy
mix. I am committed to the United States leading the world in
the development and use of energy technologies that will allow
us to produce and use fossil fuels in the cleanest possible way
while we are ramping up zero carbon alternatives like nuclear,
energy storage, and hydrogen.
With that, let me get back to FERC. You permit natural gas
infrastructure, including LNG export facilities. As such, you
all have a big role to play when it comes to all of these
issues pertaining to energy security and reliability, and any
action you take has implications. I strongly disagree with the
decision to put a new policy statement with these huge
potential ramifications into effect before an opportunity for
comment. Putting ``interim'' on the title is misleading. This
went into full effect two weeks ago, and the American people
deserve transparency behind what you are trying to do and what
you are doing. These actions and arbitrary lines drawn within
them suggest a political agenda that the Democratic majority of
FERC has gone overboard with rushing forward. Your policy
statement updates a similar statement from 1999, and it
concludes a process initiated by former FERC Chairman, Chairman
Kevin McIntyre, but instead of building on those documents,
your work swings the pendulum far to the left. Doing so
exacerbates the politicization of your agency, undermines long-
term regulatory certainty and the ability of industry to plan
and invest.
It is critical for the security of our country that we
strike the right balance and that environmental factors be
given consideration, but that must be weighed in the broader
context, and I do not believe this was done. So I very much
look forward to this discussion and hearing from all of you.
With that, I will turn to Senator Barrasso for his opening
remarks.
OPENING STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM WYOMING
Senator Barrasso. Well, thank you so very much, Mr.
Chairman. Thank you for holding this important hearing, and
thank you for your very strong opening statement properly
critical of the political and partisan decision by the FERC to
undermine our nation and our nation's security.
Today we are going to consider the FERC's two recent policy
statements on natural gas pipelines and related infrastructure.
It is difficult to overstate the damaging impact of these two
orders--damage to our nation's energy supply, damage to our
ability to help our allies escape the trap from Russian energy.
These policies are going to make it next to impossible to build
any new natural gas infrastructure or upgrade our existing
facilities in the United States. These orders are going to
increase the cost for American families to heat their homes, to
power their homes at a time of record 40-year-high inflation,
and they are going to undermine the reliability of our electric
grid. These orders were among the chief objectives of
Commissioner Clements' former employer, a group with a mission
to block pipelines. And now, for a purely partisan vote of
three to two, a majority of the Commission has delivered on
this approach.
The Commission's majority is going to claim that it was
time to update a 1999 policy statement on natural gas. They are
going to claim that the courts require the Commission to
consider climate change when evaluating pipelines and related
facilities. Remember the President's Climate Advisor, John
Kerry, did not want what was happening in Ukraine by Russia and
the deaths that were to come to distract from the climate
agenda that members of this Commission, in a partisan way, seem
to be more focused on than American national security. Neither
time nor the courts required the Commission to ram through
these orders on a completely partisan basis. Chairman Glick
brought these orders forward only after the Senate had
confirmed Commissioner Phillips. The majority issued them when
they no longer needed to compromise with Commissioners Danly
and Christie, and they wrote these orders in such a manner that
cast doubt on whether anyone can challenge them in court. It is
intentional.
Congress intended the Commission to be independent and non-
partisan. At this point you wonder if you even need a FERC, the
way it is behaving. We now know it is a political arm of the
White House, a White House intent on shutting down American oil
and gas production. The fact that the Commission issued the
partisan orders as inflation has hit record highs and just
before Russia's invasion of Ukraine is enough to astonish all
Americans. The U.S. Supreme Court has explained the principal
purpose of the Federal Power Act and Natural Gas Act. It is to
encourage the orderly development of plentiful supplies of
electricity and natural gas at just and reasonable rates. We
know a majority of the FERC does not agree with the mission of
the FERC, does not agree with what the mission is, does not
agree with the law. They want a new mission and are willing to
violate the law in the process. This radical, extreme, and
dangerous majority now claims that the Natural Gas Act gives
the authority to reject an application for a natural gas
pipeline on the basis of climate change. This majority of the
FERC claims that it can require applicants to mitigate for
climate change and that applicants can pass mitigation costs on
to American families. These are sweeping new powers that have
nothing to do with the Natural Gas Act.
Now, I am particularly disappointed in Commissioner
Phillips. During your confirmation hearing, you assured us that
``the cornerstone of utility service is reliability.'' You went
on to say, ``There are many people who are less fortunate, who
depend on utility regulators to make sure that we have energy
services that are efficient, at the lowest possible reasonable
rates.'' These very people are going to have to decide whether
they can afford to heat or to eat as a result of this recent
decision. So I cannot square those statements with the decision
to approve these orders. These orders are going to have the
exact opposite effect on what he has promised this Committee
just a few months ago. We know what happens when partisans
block efforts to build or upgrade natural gas pipelines and
related infrastructure. Prices continue to go up. The electric
grid is put at unacceptable risk. We have seen it in New
England. We have seen it in California. We have witnessed it
across Europe, where millions have been forced to decide
whether to pay their utility bills or put food on the table.
This Committee has a responsibility to ensure that the
Commission operates in a non-partisan manner, especially on the
most consequential decisions. But we must insist, Mr. Chairman,
that the Commission go back to the drawing board. FERC must
make major changes to these orders, changes that can win the
support of Commissioners Danly and Christie. This Committee
should use every tool at our disposal, including our authority
over future nominations to the Commission, to ensure that that
happens.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Barrasso.
Now we are going to turn to our witnesses for today's
hearing for their testimonies, and we will begin with Chairman
Glick.
STATEMENT OF HON. RICHARD GLICK, CHAIRMAN,
FEDERAL ENERGY REGULATORY COMMISSION
Mr. Glick. Thank you very much, Chairman Manchin, Ranking
Member Barrasso, and members of the Committee. Thank you for
inviting us to testify this morning. I appreciate the
opportunity to discuss FERC's recent Updated Certificate Policy
Statement and Interim Greenhouse Gas Policy Statement, which
provide for how FERC will consider applications to site
interstate natural gas pipelines and LNG facilities.
As a Commissioner, I make every decision based solely on
the applicable law and the facts in the record. And that is
certainly how I approached our infrastructure siting
responsibilities. I have no other agenda. In order to issue a
certificate of public convenience and necessity to a proposed
pipeline the Commission must find that a project is needed and
that it would be in the public interest. For LNG projects, the
Commission is not charged with assessing need, but we do have
to conclude the project would not be contrary to the public
interest. As the Supreme Court has explained, the Commission
must weigh all factors bearing on the public interest. As part
of this inquiry, FERC examines a variety of potential impacts
on a project, including fisheries, wildlife, old growth
forests, wetlands, air quality, agricultural lands, soil,
visual impacts, and noise. In 2017, the U.S. Court of Appeals
for the D.C. Circuit vacated a certificate order, criticizing
the Commission for failing to consider the impact of reasonably
foreseeable greenhouse gas emissions associated with the
construction of the gas pipeline to be transported by the
proposed Sabal Trail Pipeline. In 2019, the D.C. Circuit in
Birckhead, again, admonished the Commission for its failure to
adequately analyze the impact of a proposed pipeline's
greenhouse gas emissions on climate change. Last year, in the
Vecinos case, the court again criticized the Commission's
failure to assess the significance of greenhouse gas emissions.
That decision also concluded the Commission's analysis of the
project's impact on environmental justice communities was
inadequate and remanded back to the Commission our approval of
the two LNG projects.
I think developers of energy infrastructure would agree
that when regulatory agencies ignore traditional directives or
cut corners, the courts typically vacate the permits and send
the agencies back to the drawing board. This often adds a
significant amount of time and hundreds of millions if not
billions of dollars of additional cost onto a project. In one
case, Atlantic Coast Pipeline, the developer ended up canceling
the project altogether after rounds of protracted litigation.
Several other pipeline projects are currently experiencing
substantial delays and cost overruns because the agencies, such
as the Fish and Wildlife Service, the National Forest Service,
and FERC, did not get it right the first time. I am confident
that the policy statements the Commission recently issued will
lead to project orders that are more legally durable.
To his great credit, and as Chairman Manchin mentioned,
Chairman Kevin McIntyre, who had his first public meeting in
2017, announced that FERC would revisit the 1999 Certificate
Policy Statement on pipeline siting and soon thereafter issued
a notice of inquiry seeking public comments. Further action was
not taken after Chairman McIntyre's tragic passing. Last year,
we reopened the proceeding, and in total we have received
approximately 38,000 comments in response to the two notices of
inquiry, which eventually led to the Commission approving the
two policy statements on February 17th. The Certificate Policy
Statement updates our 1999 Policy Statement in clarifying the
factors the Commission will consider when assessing whether a
pipeline project is needed and how we will determine whether a
proposed project is in the public interest. The interim policy
statement provides guidance as to how the Commission will
comply with the court's guidance concerning the consideration
of a project's potential greenhouse gas emissions.
I want to emphasize that just like all other environmental
impacts, a conclusion that the impact is significant is just
the beginning of the inquiry. The Commission often finds a
particular impact will be significant but still concludes that
the benefits of the project outweigh any adverse impact.
Moreover, and this happens all the time, the project developer
can engage in mitigation to reduce the adverse impacts. As
always, I would have preferred a unanimous vote on the policy
statements. Unfortunately, that wasn't the case here.
Commissioners Danly and Christie in their dissent essentially
argue that Sabal Trail, Birckhead, and Vecinos were all wrongly
decided. Commissioner Christie's dissent, which in my opinion
was particularly well written, suggests that the Supreme Court
will eventually overturn the D.C. Circuit's decisions because
in his opinion those appellate decisions conflict with the
major questions doctrine. But it is not our role to second
guess the courts. A fundamental principle of our constitutional
structure is that the judicial branch interprets the law, and
the executive branch applies it. The D.C. Circuit has spoken on
several occasions and, unless the court's interpretation is
reversed, we have no choice but to follow its unambiguous
guidance.
Now, before closing, I want to take a second to note that
my thoughts, and I am sure the thoughts of my colleagues, are
with the brave people of Ukraine. We are witnessing true
heroism. During times like these it is impossible to ignore the
role that energy security plays around the world, including the
geostrategic significance of natural gas and LNG exports. That
is all the more reason why we must not cut corners in
permitting decisions and risk further disruptions should the
court reject our decision-making. Instead, we need to do things
right the first time.
So thank you again for the invitation to testify, and I
look forward to your questions.
[The prepared statement of Mr. Glick follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you.
Commissioner Danly.
STATEMENT OF HON. JAMES DANLY, COMMISSIONER, FEDERAL ENERGY
REGULATORY COMMISSION
Mr. Danly. Chairman Manchin, Ranking Member Barrasso,
members of the Committee, thank you for giving us this
opportunity to discuss our recent issuances.
I want to begin by dispelling this misconception about the
meaning of these D.C. Circuit cases. The policy statements and
the decision that the Commission recently arrived at places far
too much weight on a handful of cases from the D.C. Circuit,
most importantly, Birckhead and Sabal Trail. The holdings of
those cases are narrow. Sabal Trail stands for the following
proposition, and nothing more, that the Commission is required
to give an upper-bound estimate of the downstream GHG emissions
that are reasonably foreseeable and explain why it is unable to
assess the particular project's impacts on the environment that
are due to the emissions from that particular project. And you
don't have to take my word for it. This is not my
characterization of the holding of that case. This is the D.C.
Circuit's description of the holding of Sabal Trail in a case
that was issued about 18 months later, Appalachian Voices. That
is the description that Appalachian Voices had and cited to
include Sabal Trail for that proposition. So I leave it to you
to determine whether or not you think that is nearly as
expansive as the majority at FERC would have you believe its
effect to be.
In the case of Birckhead, there was no rejection of
anything that the Commission did. We won Birckhead. Birckhead's
sole holding was that the court did not have jurisdiction to
entertain the petition for review because the petitioners had
failed to raise their issue earlier in the proceeding. That is
all it stands for, and yes, of course, the court did spill a
great deal of ink saying what it would rather we had done when
we reviewed that pipeline application, but that is not the same
thing as commanding action by the Commission. I defy anyone to
find a single sentence in a single appellate court case
anywhere that mandates, requires, and demands that the
Commission undertake the vast sweeping changes that it
implemented in these policy statements. It may be convenient to
appeal to these D.C. Circuit cases to justify the actions the
Commission took, but these policy statements were discretionary
actions by the Commission, and the policy statements were not
required to be in compliance with the terms of Sabal Trail.
How do we know this? Because we have issued many cases over
the two years following Sabal Trail that complied with those
exact requirements. Appalachian Voices was one of them, and we
were affirmed. That is all that was required to be within the
compass of those cases' demands of us. So I simply want to
highlight to the Committee the fact that these cases simply do
not bear the weight that is placed on their narrow holding.
To turn to a couple of other points about the contents of
the issuances, you know, we rely on private investment in order
to deliver this absolutely strategically important and
economically fundamental infrastructure for natural gas
pipelines and LNG terminals. Private investment is impossible
when the investors are unable to access risk premiums, and
uncertainty is what drives risk premiums up. The uncertainty
that is caused by these pipelines' certificate policy
statements is profound. We replaced the basic need
determination, which was primarily centered on the question of
whether there were precedent agreements, that is to say
agreements with shippers who wanted to use the pipeline's
capacity before ground was even broken and construction had
begun. That demonstrated market need, and is probably the most
objective and probative form of evidence you can get. This is
now muddied by raising a bunch of non-economic concerns to
determine whether or not the project is needed.
When it comes to the mitigation regime, which subjects the
emissions of the entire natural gas industry, from wellhead to
ultimate consumer to our jurisdiction, in a very dramatic
expansion of our jurisdictional reach, that mitigation regime
is so vague--the details of it--that it is impossible to know
what type of mitigation will be required, how much mitigation
is going to be required, and even if you do it with your best
efforts, the Commission has decided that it is going to
withhold to itself the right to impose unilaterally further
mitigation as a condition of the certificate. That makes it
impossible for you to pursue any application without, at every
single stage, reassessing the economic fundamentals of the
project you are proposing. I cannot imagine anyone being able
to rationally allocate capital under those circumstances, or
certainly manage to get financing on terms that are
commercially viable.
I would be remiss if I did not mention that FERC is not
acting in a vacuum. We have other agencies that are pursuing
similar objectives. The Interior is delaying leases. The
Department of Transportation is regulating existing pipelines
through PHMSA (Pipeline and Hazardous Materials Safety
Administration) very aggressively. We have the SEC and other
financial regulators shaming companies into divesting energy
holdings. And I guess the last point I would make is that, as
everybody is aware, the electric system and the natural gas
pipeline system are very deeply intertwined. When you have
supply constraints, you are going to have higher prices, which
are going to drive up the cost of electricity for everybody,
and this is going to lead to reliability problems. At a time
like this, when reliability is fundamental and the geostrategic
importance of energy independence and energy security are
playing out in front of us every day in stark terms, these
policy statements come at a bad time.
Thank you.
[The prepared statement of Mr. Danly follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you.
Ms. Clements.
STATEMENT OF HON. ALLISON CLEMENTS, COMMISSIONER, FEDERAL
ENERGY REGULATORY COMMISSION
Ms. Clements. Thank you, Chairman Manchin, Ranking Member
Barrasso, and members of the Committee for the opportunity to
be here this morning.
Much has changed since the 1999 Policy Statement the
Commission issued on the certification of natural gas
facilities. Hydraulic fracturing has dramatically increased the
supply of natural gas, and demand has grown here and abroad.
Applications for new projects have multiplied, and tribes,
landowners, communities, and environmental groups have
participated to make their voices heard in Commission
certificate proceedings. Court challenges to the Commission's
decisions have mounted, and in recent years, the courts have
found that the Commission's decision-making is deficient for
the failure to examine project need, greenhouse gas impacts,
and environmental justice implications closely enough. The
Commission's Updated Certificate Policy Statement is based on a
record of over 38,000 comments. It has the same broad goals of
the 1999 predecessor and retains much of its content.
There are several important improvements, and I will
highlight two. First, the new policy provides clear guidance on
project need, which is now the gating question in the public
interest analysis. Over the years, the Commission's needs
assessment has devolved to rely almost exclusively on the
existence of precedent agreements. That is not what the Natural
Gas Act or the 1999 Policy Statement intended, and the
insufficiency is increasingly indefensible in light of vastly
changed market circumstances over the last 23 years. Second,
the Updated Certificate Policy Statement follows the Supreme
Court's instruction by providing for the consideration of all
factors bearing on the public interest. This is about the
balance that the Natural Gas Act calls for. We will balance a
project's benefits with its adverse impacts. Our analysis will
then result in decisions that can withstand judicial review.
Regarding the GHG Policy Statement, stakeholders, including
industry, told us that they wanted more guidance on how the
Commission would calculate and assess emissions and when it
would require an environmental impact statement as opposed to
an environmental assessment. The interim policy sets a
numerical threshold of annual GHG emissions that presumptively
triggers the preparation of an EIS. It also encourages project
sponsors to propose measures to mitigate GHG emissions. Let me
be clear, despite the consternation, that the policy does not
purport to regulate greenhouse gas emissions, that is the role
of state and federal environmental agencies. Instead, as it
does with other impacts, the Commission will take GHG emissions
and mitigation measures into account in balancing a project's
benefits against its adverse effects. Nothing in the policy
statements requires the Commission to reject a project that has
significant GHG emissions. Our balancing would lead to approval
if the project's benefits--for example, reliability--outweigh
its adverse impacts.
My colleagues, Commissioner Danly and Commissioner
Christie, argue in their dissent that the two policies exceed
the Commission's authority because they advance environmental
goals in conflict with the purpose of the Natural Gas Act,
which the Supreme Court has said is to encourage the orderly
development of plentiful supplies of natural gas at reasonable
prices. In considering their concerns, we must acknowledge
three things. First, the Supreme Court also said in the very
decision to which their dissent cites that the statute's
purpose encompasses environmental concerns. Second, the Supreme
Court's interpretation cannot be understood to render language
out of the Natural Gas Act. The statute provides that the
Commission shall issue a certificate only if it is required by
present or future public convenience and necessity. Otherwise,
it shall be denied. All projects before the Commission
contribute in some way to the supplies of development of
natural gas. The Congress could not have meant that every
project proposed should be approved, or else the Act's specific
Section 7 instructions for review would be superfluous. Third,
the D.C. Circuit has held that the Commission must consider GHG
impacts, which, of course, are an important environmental
factor, and has the authority to require mitigation of those
impacts.
As regulators, we must follow binding precedent. We do not
have the statutory or constitutional authority to substitute
our own opinion that circuit cases were wrongly decided or may
one day be overruled. We can continue to dig in to the status
quo. We can parse through the words of these decisions, whether
or not they are in this part of the decision or this part, and
continue to criticize the Commission's insufficiency. All that
does is set us up for further delay and expense. This is a
good, balanced policy. It goes nowhere near as far as the many
thousands of comments suggest we should go.
Finally, I want to assure the Committee that we will
implement these polices with due regard for the important role
natural gas plays both domestically and abroad. A lot is
happening right now. We could not have this conversation
without acknowledging the impact of the war, inflation, and
other factors on U.S. customers and our allies, and I take that
very seriously. Thank you, and I look forward to your
questions.
[The prepared statement of Ms. Clements follows:]
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The Chairman. Thank you.
Chairman Christie.
STATEMENT OF HON. MARK C. CHRISTIE, COMMISSIONER, FEDERAL
ENERGY REGULATORY COMMISSION
Mr. Christie. Thank you, Chairman Manchin, Ranking Member
Barrasso, and members of the Committee, thank you for this
invitation.
I strongly dissented from this new policy. I think it is
wrong on the law, and I think it is horribly wrong in terms of
national energy policy at this point in time. It will
definitely raise costs and uncertainties of building natural
gas facilities, and by raising costs and uncertainties it is
going to undeniably act as a deterrent to building the
facilities this country is going to need to keep our electric
grid reliable, to heat people's homes in the winter, to provide
manufacturers with the energy supply they need to keep
manufacturing jobs here in the United States, and even to serve
our national security as current events in Europe and Ukraine
illustrate. Now, I agree there were reasonable updates we could
have made to the 1999 Policy Statement. I agree with the
majority that precedent agreements among corporate affiliates
should not, in and of themselves, prove need. I was more than
willing to compromise on that. We could have had a compromise
on that. I also agreed that we need to strengthen the due
process considerations that go to property owners and affected
communities. We could have compromised on that.
Unfortunately, the new policy the majority imposed does not
represent a reasonable update of the 1999 policy. What the
majority did was read into the Natural Gas Act a power to
address climate change by rejecting facilities that otherwise
under the Natural Gas Act are absolutely needed. They violated
a core maxim of administrative law that has been in effect for
many years, and that is that an agency cannot--that Congress
does not hide elephants in mouse holes. And what they did here
is pull a big elephant out of a little mouse hole because they
wanted the power to address climate change, and that is exactly
what has been done here. But you have that power. That is a
major, major policy issue addressing climate change, and you
are elected by the people to address those major questions, not
us, an unelected Commission.
And as the Chairman mentioned in his opening remarks, don't
be fooled by the term ``interim.'' It's meaningless. It is in
effect now. It's not temporary. It's not time limited. It
applies right now, and it applies not only to future
applications, but also to pending applications, and it's going
to inflict material harm on many pending applications. And I
know there is, and Chairman Glick has said many times, it's
just a framework, don't worry about it, nothing to see here. It
applies now, and it is going to be a deterrent now. Now, it
didn't happen in a vacuum. It's only the latest example in a
year of a pattern of actions that have been delaying and adding
costs to natural gas facility applications. There's no question
about that. In January, for example, the majority imposed a new
procedural rule that allows in a pipeline case, even after FERC
has found it was needed to serve the public, unlimited late
interventions by parties that want to come in--and of course,
they want to come in--to oppose it. I said at the time, that is
not a legal standard. That is a legal weapon. Well, this new
policy is the mother of all legal weapons because it is going
to be used against every major natural gas facility in the
country. And again, Chairman Manchin mentioned that the
national campaign against all fossil fuel facilities, really,
there's no question this is going on. And this new policy is
going to hand, as I said, the mother of all legal weapons to
this campaign against all fossil fuel facilities, but
specifically natural gas.
So it is not about legal durability. As the Chairman says,
it is about making these projects even more vulnerable on
appeal just because FERC even approves a few. And I have no
doubt--just let me say this, there's no doubt in my mind, we're
going to see a handful of pipeline approvals brought forth to
the Commission to vote on, and it's going to be a Potemkin
village because it's not going to represent a true indication
of this--of how damaging this policy is. So, finally, I want to
say this. This issue of how to deal with climate change is an
issue for you, who are elected by the people. This is not for
unelected Commissioners or any administrative agency. In a
democracy, the major questions that affect tens of millions of
Americans' lives, those are supposed to be made by you all. You
are the elected legislators. We don't have that power, and you
haven't given it to us. No bill has ever been passed saying
FERC gets to reject projects based on climate change. No
President ever signed a bill saying FERC gets to reject
projects based on climate change. And I can tell you, Sabal
Trail didn't require us to do this. There's not a case that
required us to do this.
So, with that, Mr. Chairman, I appreciate the opportunity
to be here, and I look forward to any questions that you may
have. Thank you.
[The prepared statement of Mr. Christie follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you.
And Commissioner Phillips.
STATEMENT OF HON. WILLIE L. PHILLIPS, COMMISSIONER, FEDERAL
ENERGY REGULATORY COMMISSION
Mr. Phillips. Thank you, Chairman Manchin, Ranking Member
Barrasso, and members of the Committee for this opportunity to
testify today.
As you are well aware, Congress delegated to the Commission
the responsibility to certificate pipeline projects and LNG
export and import terminals in the public interest to provide
needed and reliable energy to consumers pursuant to the Natural
Gas Act. Under the National Environmental Policy Act, or NEPA,
we are directed to examine whether these projects significantly
impact the environment. I aim to fulfill these duties as
expeditiously as possible, consistent with each statute and
court guidance. Our failure to comply with court precedent
interpreting the NGA and NEPA risk possible remand or vacatur,
which may result in further delays or curtailment of needed
service. This does not help consumers. I believe the
Commission's recently issued guidance is a first step--I
repeat, a first step--in addressing the uncertainty and delay
associated with the Commission's review of the proposed natural
gas infrastructure projects. The Updated Certificate Policy
Statement does not establish binding rules, but is intended to
explain how the Commission will consider applications for new
projects.
The updated statement explains that, in determining whether
to issue a certificate of public convenience and necessity, the
Commission will weigh public benefits of a proposal, the most
important of which is the need that will be served by a
project, against adverse impacts. When assessing a project for
need, the Commission will continue to rely on precedent
agreements, but we may also examine additional evidence and,
like the 1999 Policy Statement, consider all relevant factors
bearing on the need of a project.
Now, the Interim Policy Statement on Greenhouse Gas
Emissions provides guidance on how the Commission will consider
and calculate projected GHG emissions for LNG import and export
proposals under Section 3 of the NGA and Section 7 of the NGA.
The statement establishes a presumptive threshold for assessing
whether GHG emissions are significant for the purposes of NEPA.
This threshold is not an emission cap, nor does it require
project proponents to mitigate direct emissions down to the
presumed significance level. Instead, it establishes a
guidepost to consider when GHG emissions may be significant. I
believe we have the authority to set this presumption to guide
our NEPA document preparation, but I also recognize that no
court has required the Commission to do so yet, nor has the
Council on Environmental Quality, the entity charged with
implementing NEPA. It has not indicated when GHG emissions are
significant. However, stakeholders--and I have met with these
stakeholders--have called for more guidance and proposed
thresholds, and the proposed threshold is meant to address the
ambiguity on how and when the Commission will assess
significance. It is intended to provide clarity.
While the Commission attempts to address the significance
standard during this interim period, I look forward to engaging
with responses from our comment period. If comments demonstrate
a better framework, which can withstand judicial review, I
remain open to those solutions. The Commission's role in
approving needed natural gas infrastructure is essential to
every American. I am committed to ensuring our decision-making
is timely, provides an opportunity for stakeholder input, and
is insulated from unnecessary court disruption. However, even
as we announced these statements, we acknowledge that they will
likely be modified if they fail to achieve their intended
purpose.
Now, much has been made about my commitment to
affordability and reliability. I want to say with clarity, my
commitments have not changed. I have deep experience regarding
reliability, and I do not have to recount my personal stories
dealing with affordability. That remains top-of-mind for me,
but it is now, Senators, and always will be, about balance for
me. That is what I have always done, and I came here to do one
thing. That is to make sure that we get to work. I look forward
to your questions. I thank you for your time.
[The prepared statement of Mr. Phillips follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Let me thank all of you for being here today
and for your testimonies. Now we will begin our questions. I
will start with the questioning.
The Commission--you all--acknowledge that to date, no
federal agency, including this Commission, has established a
threshold for determining what level of project-induced
greenhouse gas emissions is significant. Why do you all think
that FERC, whose primary purpose is to regulate efficient and
reliable energy, should be the first agency--the first--to set
such a standard rather than the environmental agencies?
Chairman Glick.
Mr. Glick. Thank you very much for the question, Chairman
Manchin.
You know, we certainly could wait, but then we would be
waiting. We had a number of cases sitting there, and we need to
act on this issue.
The Chairman. Why did the EPA not think they should be
first?
Mr. Glick. I can't answer for the EPA.
The Chairman. Why didn't Fish and Wildlife? Why not
Interior?
Mr. Glick. I can't answer.
The Chairman. Army Corps of Engineers?
Mr. Glick. Yes, I can't answer that. All I can tell you is
that we have cases for which the courts have told us that we
have to analyze the impact of the greenhouse gas emissions as
to whether they are significant or not, and, if we sat there
and didn't do anything, these cases would be sitting there. We
have been getting criticized because we are not moving cases.
That is what I am doing here. I am trying to move cases.
The Chairman. Thank you.
Mr. Christie.
Mr. Christie. Mr. Chairman, I think that the standard they
have chosen, the 100,000 tons, is purely arbitrary and
capricious, and there's no basis for it.
The Chairman. That is my second question. Where did 100,000
tons come from?
Let Ms. Clements answer first.
Ms. Clements. Sir, we looked to analogous situations in
other agencies and states across the country. We put forward
the number as a proposed interim basis.
The Chairman. Why did you put it in effect? There is
nothing proposed. You are in effect now.
Ms. Clements. Sir, we put it in effect so that we could
send certificate approvals through that the D.C. Circuit would
say, FERC did its job in considering these issues. We left it
open for input so that if we get more feedback from
stakeholders from the project sponsors that we landed in the
wrong place, then we have the flexibility on that front.
Mr. Danly. Senator Manchin.
The Chairman. Yes.
Mr. Danly. The reason stated in the GHG Policy Statement
for why the 100,000 was chosen, remember this is administrative
law.
The Chairman. Yes.
Mr. Danly. The only thing that matters is what the order
says. The order said it was administratively easy to do
100,000, that it would encompass 99 percent of the emissions of
FERC jurisdictional projects, and that 100,000 was used by
other agencies. And I will point out in that case, it was other
agencies administrating different statutes covering different
subject matter. Those were the reasons that the Commission said
it chose that number. None of them bear at all on the potential
effects or consequences or environmental effects of the
emissions.
The Chairman. Mr. Christie.
Mr. Christie. I was just going to add, Mr. Chairman, to
show how just arbitrary and capricious this whole thing is,
they don't even say what level of mitigation. They don't even
say they have the power to require mitigation of indirect
impacts because they don't. So what they are going to do is say
to the applicant, we encourage you to propose--sort of
encourage with a gun to your head--we're going to encourage you
to propose mitigation, but we won't tell you what's good
enough. We won't tell you how much is enough or how much is not
enough. So it's purely arbitrary, and it just comes down to
whatever three members are willing to approve.
The Chairman. Very quickly.
Mr. Glick. Thank you, Chairman Manchin.
You know, we do this analysis all the time with all sorts
of environmental impacts--geology, soil, water, land use,
visual issues. We do this all the time. Every single time the
Commission issues an order, we don't have the necessary metrics
that the other agencies use. We have to determine whether those
issues--those impacts are significant or not, and we do so
through our environmental impact statements, and then the
Commission votes on that. And this is no different. They're
making it sound like it's a totally different set of issues.
We're just following the law.
The Chairman. Let me just say this, if I may. LNG, we know,
is needed right now. With what Europe is going through and the
geopolitical climate that we have, which is very, very
dangerous, we are trying to ramp-up LNG to backfill if we can.
We cannot get anything through. I mean, this is the bottom
line. I will say this, as a person that comes from an energy
state, a transition is going on. I am all for transition from
the standpoint if we can make sure that we have reliable,
affordable, and dependable power. I am just not going to go out
10 years from now and be caught short. That is the problem.
That is what Europe did.
And we spoke to them yesterday about that. We do not have
to ramp-up. We already have it. Just let us go. We cannot get
lines in. And you all say, well, this and that. You are not
talking to agencies, must not be talking to each other. You are
not talking to the EPA. I guess you are all separate. Everybody
goes through their own process. You are wearing people out. You
are wearing people out and putting undue burden on the users in
America. We are paying much higher prices. We have never paid
these kinds of prices, not in my State of West Virginia. They
have doubled their utility prices, and we have not seen any
principal changes.
Mr. Christie. Mr. Chairman, I just want to respond to
something Chairman Glick just said under his nothing-to-see-
here defense that we've always done these environmental impact
analyses--nothing to see here, no big deal, we've always done
it. And I read his statement talking about the various
environmental impacts that FERC has historically done. They're
all impacts directly related to the specific facility itself.
There's no question we can mitigate or reduce or minimize
environmental impacts to a forest or a wetland where the
pipeline goes through, but to say that the applicant has to
mitigate global climate impacts is not even remotely related to
what FERC has historically done. So I think that it's totally
misleading to say there is nothing to see here, nothing new,
we've always done environmental impacts to compare drainage
mitigation going through a wetland to oh, you've got to
mitigate global climate change. If you can't see the difference
in that, you're not looking. That is a massive step different.
The Chairman. You are going to be able to answer many
questions, and I am going to go down to Senator Barrasso so
everybody gets a turn.
Senator Barrasso. Well, thanks so much, Mr. Chairman. I
appreciate your line of questioning. I appreciate the comments,
and I can clearly see the difference, Commissioner Christie,
what you have outlined, and I would think that any thoughtful
person could see that and understand it completely.
Let me get to Commissioner Danly, if I could. What is going
to be the impact of the Commission's two policy statements on
consumers for the near future, the medium future, and over the
long term? What is the impact?
Mr. Danly. So the immediate effect is going to be that
there will be a chilling of investment, which, for the most
part, is actually going to be realized in its palpable effect
to the consumer down the road. But the chilling of investment
is going to make it difficult for us to build this
infrastructure in the future. It's going to cause a rise in
prices, both for natural gas as a commodity that people burn in
their houses and the like, but also for electric generation,
and it's going to create supply constraints that are going to
imperil reliability.
Senator Barrasso. So what the Democrat members of this
Commission are doing right now is going to make inflation even
worse on American consumers by raising energy costs?
Mr. Danly. Yes, and of course, energy is an input to
virtually everything we do. And so it's going to make every
cost go up everywhere. It'll be most acute though in the case
of electricity and gas.
Senator Barrasso. And could the Congressional Review Act
enable Congress to block these orders and protect American
families?
Mr. Danly. I think it probably can. The question that is
often raised is the issue of the terminology rule. The word
rule in the Congressional Review Act by its definition in the
enactment is much broader than rulemakings that we have in
administrative agencies. I think it's virtually certain that
the CRA can be applied here.
Senator Barrasso. In your dissent, you state that the
Interim Greenhouse Gas Policy Statement violates the Natural
Gas Act, NEPA, and the Commission and the Council on
Environmental Quality's regulations. Could you expand a little
bit about your comments?
Mr. Danly. Certainly. So it violates the NGA because it is
designed to undertake tasks that are directly contrary to the
purpose of the NGA. The case with the NAACP informed us that we
have to interpret our statute in the light of the purpose of
the statute, which is to promote the orderly development of
natural gas in plentiful supplies at reasonable prices. It
violates the CEQ's regulations because we have regulations that
implement CEQ's regulations, and CEQ specifies the means by
which we're supposed to engage in our environmental review,
including when EAs or EISs are appropriate, and how the rule of
reason governs our NEPA analysis. These things are actually
contrary to the laws on the books as they stand.
Senator Barrasso. So, in your dissent, you discuss how the
Interim Greenhouse Gas Policy Statement applies to both new and
pending applications for natural gas projects. You say, the
applications to all projects, both new and pending, some for
over two years, is an affront to the basic fairness and is
unjustifiable, especially in light of the many unnecessary
delays already suffered by these applicants. Could you expand a
little bit on that for the Committee?
Mr. Danly. So, when I talk about the unnecessary delays,
one of the concedes so far that we've heard during this hearing
is that everything had to wait--this logjam had to build up
while we were waiting for the policy statement. Well, that
can't be true by the terms of the policy statement itself
because, according to my colleagues, it's nonbinding. We
could've engaged in any of these analyses that we had wanted to
as these cases were pending. That is what I mean by the
unjustified delays. When it comes to the unfairness, it is a
basic premise of the law that people are supposed to be on
notice about how it is that their request of government and
their interactions with government are going to be considered.
And all of the reliance interest that was built and all of the
money that was spent in getting these applications to the
Commission and prosecuted before the Commission are now thrown
into disarray, and people cannot rely upon any of those
assumptions that had been baked into our process for decades
before this policy statement was issued. That is obviously
unfair, and I think everybody who has a sense of fairness and
decency understands that.
Senator Barrasso. Commissioner Christie, let me first go to
you, and then I will ask Commissioner Danly to respond as well.
The Interim Greenhouse Gas Policy Statement claims that to
provide guidance for applicants on how to account for
greenhouse gas emissions from natural gas projects, you know,
your dissent paints a very different picture on this. When the
Commission applies the policy statement to specific projects,
what is likely to happen?
Mr. Christie. Well, that is an unanswerable question,
Senator, because it is so unclear, it's so confusing, that the
applicant doesn't even know what it takes to get approved. And
that is one of the most pernicious aspects of this whole thing.
You know, what they've said in here is, well, above 100,000
tons you're going to get an EIS, which is a very long,
involved, costly process, and by the way, the 100,000 tons are
going to end up meaning almost all major projects are going to
fall into that category. So they're all going to have to do an
EIS, which is very costly. But the pernicious thing about this
is that they say, we're not even going to tell you what you
have to do. We encourage you, again, with a gun to your head,
to propose mitigation, but how is an applicant for a
transportation facility--let's remember something, a pipeline
is a transportation service. It's not producing gas. It's not
consuming gas. It's just transporting gas from the producer to
the consumer. So what they're telling them in this policy is,
you're just a transportation service, but you have to propose
mitigating global climate change, and we're not even going to
tell you how much is enough. So you have to guess.
Now, who can go out and raise $6 billion of risk capital
based on a prospect that you don't even know what three members
of the Commission are going to be willing to approve? It is
purely arbitrary and capricious, but it's just utterly
pernicious and, of course, it's all set up so no one can
appeal. Let's get real. It's all set up so no one can appeal.
The Chairman says it's only a framework. You have to wait to
see how it works out in individual cases, and clearly, in
individual cases, we're going to see it work out, but I think
what we're probably going to see is that the deterrent factor
is so great, I think you're going to see a lot of applications
that are never going to get even proposed, and maybe that is
the point because who can raise $6 to $8 billion of risk
capital based upon a standard that says, try your luck, go buy
a Powerball ticket. Try your luck.
Senator Barrasso. Mr. Chairman, my time is up. I just want
to submit for the record a letter from Alan Armstrong on this
specific thing. He is the CEO of Williams Companies. They
transport about 30 percent of the natural gas in this country.
As he put it, ``One thing is clear, instead of providing more
clarity and regulatory certainty for natural gas infrastructure
projects, this new policy statement creates more confusion and
less regulatory certainty,'' and he concluded by then saying,
``The Interim Greenhouse Gas Emissions Policy Statement has
shrouded FERC's certificate decisions in a fog of indecision.''
I ask unanimous consent that----
The Chairman. Without objection.
Senator Barrasso. Thank you, Mr. Chairman.
[The letter referred to follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Senator Heinrich.
Senator Heinrich. So it seems to me that the real threat to
energy infrastructure is uncertainty, and cutting corners in
the planning process creates an enormous amount of uncertainty,
as we have seen borne out in multiple court rulings. Chairman
Glick, can you elaborate on how FERC's recent actions relate
directly to those court rulings and how certainty in the
planning process not only improves the prospects of completing
projects but also investment and finance?
Mr. Glick. Thank you for the question, Senator.
That is what this is all about. We are all talking about
certainty one way or the other. And I think that, you know,
there are different ways of looking at certainty, but with
regard to Commissioner Danly, who argued a second ago that the
Sabal Trail case doesn't say what we say it says, and read his
dissent, read Commissioner Christie's dissent, they spend the
entire dissent saying the court got it wrong. They don't say
the court didn't say what it said. They just said the court got
it wrong. And that is not our job to do.
And so there is the ACP case, which I mentioned in my
opening testimony. There's the MVP Pipeline, which is sent back
over and over again because the agency has kept on cutting
corners. In FERC's case we have the Spire case, the pipeline in
Missouri and Illinois in which the Commission, with no evidence
in the record, and the court said so, approved the pipeline,
and then it got sent back. Now it's back to us a couple years
later. And then we have a pipeline before the FERC's
jurisdiction, the Dakota Access Pipeline, an oil pipeline for
which the agency decided not to do an environmental impact
statement. You know what the court said? Sending it back.
And so we're talking about billions of dollars. We have the
MVP Pipeline in which they said recently they're thinking about
dropping out of the project because of the lengthy delays. And
so what we're trying to do here is provide more certainty. I
understand this is a difficult concept. I understand that I am
going to be meeting with a bunch of CEOs next week to talk
about it. They can certainly seek clarification. We will be
glad to clarify it, if that will help. But if we sat there and
did nothing, all we would be doing is further imperiling these
cases and adding more uncertainty to the whole process.
Senator Heinrich. Commissioner Clements, you brought up the
issue of what triggers an EA versus an EIS, and that is often
the subject of litigation and challenges to some of these
projects. Why is it so important to have some actual guidance
so that people do not have to guess what process is appropriate
for their project?
Ms. Clements. Thank you, Senator Heinrich.
The planning process for large, long-lived infrastructure
like a pipeline is expensive and long, a long planning process
regardless of whether or not you are performing an
environmental assessment or environmental impact statement. The
environmental impact statement will increase by a number of
months the upfront work. It involves a more thorough review. It
is time well spent. It sets the project sponsor up for success
in having a legitimate approval that not just the courts
respect, but that stakeholders who have other tools to
challenge the pipeline respect. So what we have done, to your
question, sir, is put forth a number that allows us to go
forward right now with an understanding we can work with and
then to take feedback as we apply this policy statement to the
facts of each given case on a going-forward basis.
Senator Heinrich. Thank you. I think that is a very
important point, and I want to thank you all for doing your
job. All five of you clearly do not have the same opinions, and
I think that is appropriate. And I hope that all of you will
remain independent and reject any efforts by anyone to bully
you into embracing one political agenda or another, and I
appreciate your independence.
The Chairman. Thank you.
Senator Lee.
Senator Lee. Thanks, Mr. Chairman.
Commissioner Christie, I would like to start with you. It
seems the majority is interested in essentially halting new gas
projects. Now, you addressed this point in your dissent noting,
``the new policy threatens to do fundamental damage to the
nation's energy security.'' Tell us how you think American
families will be hurt if these policies remain in place.
Mr. Christie. Well, we start from the premise that at this
point in our history, natural gas is absolutely essential to a
lot of things. First of all, it's essential to our electric
reliability grid. It's now the largest single source of fuel
for our electricity reliability grid. So natural gas is
essential to keep the lights on. It's also essential to our
manufacturing base. We hear, you know, not only is this going
to attack energy jobs, this is going to impact manufacturing in
the parts of America where manufacturing and manufacturing jobs
are a vital part of our economy because manufacturing
industries need reliable energy supply. And of course people
heat their homes with natural gas, and it is a national
security issue.
So we need natural gas supply. As Senator Manchin says, the
transition is underway. Certainly, we're going to move toward a
more carbon-free--and that is a good policy goal, but as we
move toward reducing carbon emissions, natural gas is going to
be an essential part of our energy mix. And what this policy is
going to do is, it's a massive deterrent to building the
natural gas facilities that we're going to absolutely have to
have.
Senator Lee. Thank you.
Now, Commissioner Danly, in your testimony you addressed a
finding in Appalachian Voices v. FERC which indicates that the
Commission is setting a standard for itself and for applicants
that simply is not supported by the law. Tell us how far beyond
the law projects will have to be able to go now. How far beyond
the legal standard prescribed by the law itself they will have
to go in order to comply?
Mr. Danly. Thank you, Senator. That, unfortunately, is the
very question that every one of the possible project proponents
is asking themselves. There's no way to know.
Senator Lee. Unknown and unknowable.
Mr. Danly. That is correct. And when you consider--if you
want to speak in just broad legal terms how far beyond the law
is required, I explained that Sabal Trail required that narrow
holding. Imagine this set of policy statements basically
declares that FERC now has the power to regulate emissions
going all the way from the wellhead to the ultimate consumer of
the gas. That means that it's everything from gathering at the
front to literally boilers in your house to heat water,
combined-cycle electric generators, and fertilizer plants. And,
although they put it in terms of exhortation, as in, we
encourage you to come up with a mitigation plan. That kind of
encouragement has a bit of coercion in it, right? The project
applicants are going to have to guess what it is, and worst of
all, even if it's extremely good mitigation, they can still
have more imposed upon them as a certificate condition.
Senator Lee. And in a field that requires--for the
stability of our access to energy in this country, it requires
substantial capital investment. Investment, in turn, cannot
happen, I mean, a condition precedent of investment is a degree
of legal certainty. Is that right?
Mr. Danly. That is correct.
Senator Lee. And that is why you have come to this
conclusion that this pushes us dangerously into a territory in
which such investments simply will not be made----
Mr. Danly. They will not be made. And many of the current
ones in the pipeline, I expect--I can't give a number, of
course, it's in the future--but 15, 20 percent, I could imagine
that high, withdrawing because of the uncertain mitigation
they're going to be facing. And in order for us to claim as an
agency that we're creating this level of uncertainty for the
sake of giving certainty down the road, for the legal
challenges that will arise, is like saying we have to destroy
the village to save it. It's just not believable. The chilling
effect is happening now. The lack of investment is happening
now. In the boardrooms they're discussing what they're going to
do for the sunk costs that have already gone into these
projects.
Senator Lee. All this is very troubling, and it is
troubling especially in light of the fact that it has not been
very long since we saw how fragile some of our systems are. It
has only been a few months since the Colonial Pipeline attack.
And in the immediate wake of that attack and others that have
occurred even more recently in the same time period and events
that occurred in Texas, we have seen how fragile it can become.
And in the wake of the Colonial Pipeline attack, Chairman Glick
noted--you noted, sir, that the, ``cyberattack against the
Colonial pipeline system, which provides nearly half of the
fuel supply for the East Coast, is a stark reminder that we
must do more to ensure the safety of our nation's energy
infrastructure.'' Now, I find it unsettling that just months
after making that statement, we saw a majority, including you,
Chairman Glick, undertaking actions that are the opposite of
that. As I see it, you have prioritized your own radical
climate agenda over expanding our energy infrastructure, and
this makes us more vulnerable to attack and leaves us with less
of what we need.
Now, I want to close just by noting, reminding everyone why
FERC exists. FERC was created to help bolster our nation's
energy security, not weaken it. And the Commission's recent
actions make clear that it prefers the latter. In light of that
and echoing what Senator Barrasso said in his opening
statement, I am now starting to think that perhaps we would be
better off without FERC, which, having been created by
Congress, can be eliminated by Congress. Perhaps it should.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
Now we have Senator Hickenlooper.
Senator Hickenlooper. Thank you, Mr. Chair, and I thank all
of you for your hard work on this. The conflict is obvious, and
I can see clearly the two sides. I see why FERC was compelled
to take this action under the current statute and the cases
that the D.C. Circuit Court made clear. They felt that the
business as usual was not working. In a way, this is similar to
the issues we are facing around transmission, which I think we
have heard Senators of both sides--I know I heard Senator
Lankford, Senator Manchin, and Senator Heinrich talk about
these issues. Maybe it is time that we get around the table and
just discuss a legislative solution to gas and transmission at
the same time because we really are running out of time. I
think there should be a sense of urgency around this. We will
continue to grapple with this and figure out how to do
everything and provide the protections and the process to touch
all the bases, but create a system that is going to move a lot
more rapidly, and with more assurance and less risk to
investors that are trying to make assessments on where to put
their capital.
So hopefully that would be something that the other
Senators could work on. Is that something that would be
receptive to each of you?
I think that is almost unanimous.
The Chairman. I don't know if they have ever talked to each
other before
[Laughter.]
Senator Hickenlooper. Honorable Mr. Christie.
Mr. Christie. Mister is fine, Senator Hickenlooper, thank
you.
You make a very good point, and I think it is a much bigger
issue even than gas pipelines. Just yesterday in Wisconsin a
federal judge struck down an electric transmission line that
was going to bring electricity from Iowa, mostly wind
generated, to Wisconsin, and he struck it down based upon,
guess what? You didn't do enough of your NEPA analysis. So
attacks on infrastructure that this country is going to need,
whether it's electric transmission lines or natural gas
pipelines, are incredibly vulnerable to the legal warfare that
can be used against by using these procedural statutes like
NEPA, APA, and so it is a much bigger issue even than natural
gas pipelines, Senator.
Senator Hickenlooper. Well, that is an issue that is not
going to go away.
Yes, Mr. Chairman.
Mr. Glick. Senator, we certainly would be willing to work
with you. To the extent you need any technical advice in
legislation, we're always willing to do that and talk about it.
I think Commissioner Christie is right, you know, we, as a
country, we have a problem. We know we need more infrastructure
as we transition into this energy future, whether it be
pipelines, LNG, whether it be electric transmission, whether it
be generating facilities. And constantly, the developers of
these projects run into all sorts of snags, and it's very
difficult. I understand that completely. But the answer is not
to ignore the law and, as Senator Lee mentioned a second ago,
maybe we don't need FERC, you know, if Congress wants to get
rid of FERC, someone is going to site the project though. You
give it back to the states. I don't think anyone wants that
because there is all sorts of checkerboard regulating. You can
give it to the Interior Department. You can give it to the EPA.
There are other agencies that can do it. But the problem still
exists. We have to do it right the first time and follow the
law. If we don't follow the law, we're just going to continue
to get these court orders that Commissioner Christie mentioned.
Senator Hickenlooper. Right.
And what would be the information that gas companies would
be required to submit to the Commission if we are going to go
forward on this?
Mr. Glick. Well, first of all, they're going to have to
submit information about the need for the project, which is
required under the law, and then they're going to submit
information about a whole variety of potential impacts, like I
mentioned earlier--wetlands, water quality, visual impacts, all
sorts of impacts, and they'll submit information as the courts
have required on a number of occasions now regarding their
potential greenhouse gas emissions. Greenhouse gas emissions
are primarily used, at least up front, to determine whether an
EIS is necessary or an environmental assessment is necessary.
The problem is, if you don't do the environmental impact
statement first, if you think there's potentially an
environmental problem and you do the environmental assessment,
the court is going to send it back to you and do the EIS. We
saw that in Dakota Access. It's just further delaying needed
infrastructure development.
Senator Hickenlooper. Right. And certainly, there is a
whole raft of new information that is available. I know we have
a company in Colorado called Canary that can measure very, very
accurate methane leaks and emissions, which, obviously, would
have to be a part of any kind of environmental impact
statement.
Mr. Glick. Absolutely.
Senator Hickenlooper. Great. Well, at some point we should
figure out what that process might look like because I think
whether you are talking about the grid or pipelines, we all
have the same sense of urgency of how can we move in this
transition a lot more rapidly.
The Chairman. Well, they want to move into transition
rapidly, but the bottom line is you cannot just abandon the
reliability that we need. That is the problem.
Senator Hickenlooper. Exactly.
The Chairman. They want to put the cart in front of the
horse and have the horse push the cart up the hill.
[Laughter.]
The Chairman. Can't do it. Just can't do it. It makes no
sense at all for us to be that vulnerable, for a superpower of
the world to be this vulnerable, especially when the world
needs us more now than ever. And here we sit having these
conversations here that are going to restrict us. That makes no
sense to me.
Senator Hickenlooper. But I bet we could sit down fairly
quickly and figure out some ways to----
The Chairman. Well, I think we need to all sit down.
Senator Hickenlooper. Absolutely.
The Chairman. This is wrong.
Thank you. I'm sorry.
[Laughter.]
The Chairman. You got me going there, Senator.
Senator Hickenlooper. I yield.
The Chairman. Thank you.
Senator Hickenlooper. In a nick of time.
[Laughter.]
The Chairman. You saved me.
Senator Lankford, it is your turn.
Senator Lankford. Mr. Chairman, thank you very much.
In the week that Russia is murdering its neighbors and
using fuel as a weapon again, against all of Europe,
intimidating everyone with it, we are discussing how much
slower fuel will be managed in the United States. That is the
problem, is that this continues to slow down this conversation
about certainty that has been here. My understanding from
reading through this is FERC will now handle mitigation plans
on a case-by-case basis. A case-by-case basis does not give
anyone a sense of certainty to say turn it in, we will look at
it and we will discuss it, and especially with a new process,
when literally we should be trying to expedite things. It is
now a case-by-case basis. Do a $3 billion proposal, and we will
take a look at it, case by case, depending on the makeup of
this body.
I'll tell you, Keystone sent a pretty clear message on day
one of this Administration. We do not want to do pipelines on
oil. And then, there was an announcement of a Federal Reserve
nomination that the nominee announced immediately and made it
very clear that they are going to use the Federal Reserve to
then punish any entity that provides capital for any kind of
fossil fuel projects. We have paused federal lands for a year,
permitting on federal lands and doing new leasing on that. So
the pause for a year, and then this rule was announced, and it
is an interim rule.
Mr. Danly, how long does an interim rule last?
Mr. Danly. Senator, there's really no such thing as an
interim rule. This rule isn't interim in that it applies
immediately and, of course, the Commission can always hear
comments and listen to what people have to say, but nothing
makes the Commission as a body do anything about those later
requests.
Senator Lankford. So let me just ask a question,
Commissioner Danly. Does FERC have the authority to regulate
flaring natural gas at the production of the wellhead?
Mr. Danly. No.
Senator Lankford. Does FERC have the authority to regulate
the combustion of that gas at the power plant?
Mr. Danly. No.
Senator Lankford. Does FERC have the authority to regulate
my stove top at my house?
Mr. Danly. No.
Senator Lankford. Or my water heater at my house?
Mr. Danly. No, it doesn't.
Senator Lankford. But this pipeline conversation, the
transport device, is now going to have to say for the pipeline
company, show where you are mitigating all sources and your
total environmental impact of greenhouse gases of actually
moving this molecule?
Mr. Danly. That is correct. The idea is that the
transportation service provider is requested to mitigate the
emissions that occur upstream and downstream. They're
encouraged, to use that word again, to give that mitigation
plan.
Senator Lankford. So what it sounds like FERC is doing is
to say, I don't have the authority to regulate those things,
but I do have the authority to regulate you, and so I'm going
to encourage you, as an entity, to go to them and put pressure
and to make changes because I can't do that, but I also don't
have to give you a permit until you put pressure on somebody
else.
Mr. Danly. It is, in my opinion, a classic case of doing
indirectly what can't be done directly.
Senator Lankford. It is what it reads like, and it is what
it feels like.
Commissioner Christie, let me ask you a question here, and
again, this goes back to our certainty conversation we are
trying to be able to have on this and how it is going to handle
what a case-by-case mitigation proposal is going to be for any
entity that already has approval by the Commission now for
their project. They already have approval. They are already
done. They come back to request a minor change, let's say a
timeline change, a date change or something. If they come back
to be able to make a minor change on that, are they going to
have to go through this process all over again? Those that are
in process that have started long ago, will they have to go
through this if they ask for a timeline change?
Mr. Christie. It applies to all future and pending
applications, and we actually have already approved facilities
that are asking for route changes, minor route changes. And
they're pending right now, and they're not being brought in
front of us to vote on. And my assumption is, this whole policy
is going to apply to those as well. So my answer to you would
be, based on what I know, yes, it applies to everything, even
when you've been approved five years ago and you come back in
for a route change, you're going to have to do this.
Senator Lankford. Chairman Glick, is that correct?
Mr. Glick. Thank you, Senator.
So that actually isn't necessarily correct. It depends on--
--
Senator Lankford. Well, this would be helpful to everyone
listening right now to be able to know because everybody is
trying to get certainty.
Mr. Glick [continuing]. Right and I think this is all about
certainty, as I said earlier. I think it depends on what's
filed before the Commission, but if it's a major request for a
significant change, then yes, we're going to have to look at
the environmental impacts. But you said earlier----
Senator Lankford. Hold on, hold on. Can I just clarify
this?
Mr. Glick. Sure.
Senator Lankford. Because everybody's listening. Who knows
what is significant and minor is in that sense--a date change,
a timeline change, a route change--how significant of a route
change is now significant and has to go through this process
all over again?
Mr. Glick. We are presented with that question every single
day. We have been presented with that, FERC has been presented
with that question, the Federal Power Commission before that,
ever since 1938, as to what kind of change. We have amendments
that come that are considered minor amendments, and we have
amendments that come to the Commission that are considered a
major amendment, amendments to the licenses. And the fact is,
is that we look at these issues, we do these issues all the
time, and we assess, on a case-by-case basis, as you
referenced, whether those issues are significant, whether it
be--the greenhouse gas is just one of many. All you have to do
is look at our environmental impact statements or even our
environmental assessments before we move forward with the
projects. We look at every single case on a case-by-case basis
and determine, by voting--the Commissioners determine by a
majority vote whether any particular item is significant. And
even when we find those items are significant, we often--and
often meaning 99 percent of the time--still find the project is
in the public interest. So this is not----
Senator Lankford. But this is different. This is trying to
be able to set a whole new set of standards for them. If there
is a deadline change or a route change, that is still going to
be a case-by-case decision on a vote of this, five members of
this body to be able to determine if they are going to have to
go through this whole process all over again, even though they
have already been approved for the project.
Mr. Glick. As has always been the case.
Senator Lankford. No, this is new. So that is what I am
trying to figure out.
Mr. Glick. No, what's new is that we're looking at one
additional environmental impact, but we've always determined on
a case-by-case basis whether that particular proposal, the
amendment to the license, for instance, is significant enough
that it requires additional environmental review or not.
Senator Lankford. Okay. I have gone past my time. Thank
you.
Senator Barrasso [presiding]. Senator King.
Senator King. Thank you, Mr. Chairman.
I spent a good deal of my life permitting energy projects
and also with FERC. And I find this whole discussion sort of
weird because I remember in the 1980s doing an exemption for a
hydro project, which was a very small one- or two-megawatt
project, but we had to do environmental analysis of wetlands.
We had to work with U.S. Fish and Wildlife. We had to look at
the effects on the water surrounding the project and fish
passage and all of those issues, and here we are saying that
the FERC cannot require the examination of the most serious
environmental threat that this country and world has ever
faced. I think that is preposterous. Plus, it strikes me that
what you have done is to try to develop more certainty than is
the case today because all of these projects are going to go to
court, and you keep losing them because you do not have the
environmental analysis of the effect on greenhouse gases.
So isn't that true, Mr. Chairman, that you are trying to
put more certainty into the--I mean, everybody is talking about
certainty here, but you do not have it. If you are an applicant
you do not have any certainty if you go through the whole
permit process and then your permit gets bounced in the federal
court, which is what is happening.
Mr. Glick. Thank you, Senator. You're 100 percent right.
Senator King. Let the record show that please. He just said
100 percent right.
[Laughter.]
Senator King. I want to be sure.
Mr. Glick. When we sign off on each project, we have to say
whether the project is going to have significant adverse
impacts to the environment and what my two colleagues----
Senator King. And that is required by law. That is NEPA.
Mr. Glick. That is correct.
Senator King. Right. This is not something that is nice to
do. NEPA says that any federal agency shall identify and
develop methods and procedures which will ensure that presently
unquantified environmental amenities and values may be given
appropriate consideration and that the environmental impact of
proposed actions--you have to do that. That is the law, and is
greenhouse gas an environmental impact?
Mr. Glick. That is what the courts tell us, so, yes.
Senator King. So the courts tell us that, and common sense
tells us that, and the thing that troubles me about this is, I
have talked to representatives of the industry. They say, don't
worry about methane. We have it under control. If they have it
under control, what are they worried about? Why are we having
this big hoorah to try to pressure you guys to back off what to
me is a common-sense regulation?
Mr. Glick. That is exactly right. And I want to point out
that in many cases a proposed project, when it comes to us, the
applicant will say whether the project is actually going to
reduce a dirtier fossil fuel, like in electric generation, for
instance. And we consider that a benefit. So what's wrong with
taking a look at that if it's actually going to benefit our
consideration of the project because the project is actually
going to reduce greenhouse gas emissions, and my colleagues
don't want us to look at greenhouse gas emissions at all.
Senator King. Well, it seems to me that there is an
argument that you could clarify the order. You could work with
stakeholders and try to make it to provide more clarity, but
the fundamental premise is that this is an environmental
impact. Methane is 80 times worse than CO2, and it
is the low-hanging fruit of climate change, and we have to do
something about it, and it involves the transport of natural
gas. And by the way, Mr. Christie, you say, this is a
transport. This is transport. NEPA applies to highways. And
don't say NEPA is a procedural law. NEPA is one of the most
important substantive laws that we have in this country to
protect our environment. You act like it's something that's,
you know, it's just sort of where you check a box or something.
This is a major substantive premise and what we are arguing--I
want to keep New Orleans above sea level. I want to keep New
Orleans from being sunk. And we are talking about a foot of
sea-level rise in the next 30 years. That is where--that is the
latest work. And I think it may actually be more than that.
So this is not some abstract thing. It is not an effort to
delay, Mr. Chairman. It is not an effort to delay, it is an
effort to actually mitigate the delays that are inevitable if
we don't take this step because the courts are going to keep
kicking your decisions back if you don't comply with NEPA.
Isn't that correct?
Mr. Glick. Yes, that is correct, and we've seen it just in
the last several weeks. The Fourth Circuit decision in the MVP
case, the agency said, well, we're not going to look at
greenhouse gas emissions, and the court said you can't do that.
And then, I think it was in the D.C. Circuit in the Dakota
Access case, said we're not going to do an EIS, and the court
said you can't do that. So in both cases now we've just delayed
the projects further, added hundreds of millions, if not
billions of dollars.
Senator King. Well, I want to ask a couple of the minority
members. Is it Mr. Daily?
Mr. Danly. Danly.
Senator King. Danly. Is the drainage situation on a ditch
adjacent to a pipeline more environmentally significant than
methane releases?
Mr. Danly. No, not necessarily.
Senator King. I am delighted you gave that answer.
Mr. Danly. Well, I don't know how much methane leakage
you're talking about, but the only reason I hesitated there was
because I don't have enough facts to answer the question
properly.
Senator King. But do you see--what I am getting at here is,
my mother used to say, you are straining at gnats and
swallowing camels. You are doing this, you know, you are saying
it's okay to do a detailed environmental impact statement,
which I had to work on when I was doing these projects on, you
know, the riparian wetlands.
Mr. Danly. Yes.
Senator King. But not on greenhouse gases, which is the
major environmental issue that we now face. Are you just saying
that's just off the table? We don't need to talk about that?
Mr. Danly. What I am saying is there is prevailing Supreme
Court precedent on Public Citizen that describes what the
proximate and legal causes of environmental effects are that
are properly examined under NEPA. There is a carve-out from
that very broad requirement of Public Citizen in the form of
Sabal Trail, which has a narrow holding, as I have discussed
already during this hearing and that the Commission does not
have, either from its organic statutes or its obligations under
NEPA, the privilege of regulating things for which it is not
the proximate legal cause.
Senator King. All right, well, I understand the argument,
but it seems to me if you build a pipeline and there are
associated with the pipeline either at the back end or the
other end are methane leaks, then that is an impact of the
project.
Mr. Danly. I agree. And so all of the emissions that are
the direct result of the construction and the operation of the
pipeline, those, FERC is definitely the proximate legal cause
for. I have no doubt about that.
Senator King. So perhaps----
Mr. Danly. I am talking about--I'm sorry, Senator.
Senator King. No, no, you go ahead.
Mr. Danly. I was going to say I am referring more broadly
that we cannot simply encompass all emissions. That is to say,
the emissions burned downstream in every case because they're
not necessarily reasonably foreseeable and they are not
necessarily caused by----
Senator King. So this is an area where you are suggesting
this order might be tightened and clarified.
Mr. Danly. I would love to see it tightened and clarified.
Senator King. Thank you.
Thank you, Mr. Chairman.
The Chairman [presiding]. Thank you, Senator.
Senator King. I hated that you were not here.
The Chairman. Oh, I was listening right through the door.
[Laughter.]
Senator King. I should have started with ``all due
respect.'' That really means that is just before the knife goes
in.
The Chairman. I know. I have plenty of holes.
[Laughter.]
The Chairman. Senator Marshall.
Senator Marshall. I want to yield to Senator Cassidy.
The Chairman. Oh, okay. That is very kind of you.
Senator Cassidy.
Senator Cassidy. Yes, so, I have a couple of quick
questions, and then I have a kind of more extended question.
Mr. Glick, Mr. Lankford just went through kind of a litany,
and it was not even complete of the kind of multi-front ways
this Administration is going after fossil fuel. Senator
Heinrich said something along the lines that he does not want
anyone bullied into a political agenda on these matters. Has
anyone higher up in the Administration ever spoken to you in
regards to how slow-walking or otherwise impeding or otherwise
accentuating policy would have the effect of impeding the
development of natural gas pipelines?
Mr. Glick. Absolutely not----
Senator Cassidy. Okay, that is fine.
Ms. Clements, you had mentioned, and I will just go to you
just to kind of spread my questions around. Mr. Glick said
that, in a sense, we have to do this to provide certainty in
order to make it easier for people to get things permitted. But
Senator Barrasso entered a letter from a guy who says he is a
pipeline guy who hates it. I have been getting my phone blown
up with people that hate it. It kind of reminds me, I think Mr.
Danly had kind of an interesting analogy. We have to burn the
village to save it. So it seemed like the people who
potentially benefit from the certainty are the ones who are
complaining the loudest. Can you quickly tell me, how do you
connect the disconnect?
Ms. Clements. Thank you, Senator.
To continue your analogy, the village has been burning, and
that is not in the global warming sense. There has been
uncertainty for the gas industry related to pipeline
applications since at least 2013.
Senator Cassidy. But these guys don't want it. They are
objecting to what the majority is doing, so it seems like they
would be the ones, if they were enlightened by your analysis,
that would be welcoming this sort of certainty being granted.
Ms. Clements. Sure, you know, I respect the concerns from
individual companies about what this policy framework, which is
now in place, might mean for any potential investment. That is
the reality of making investments and the need to change. It
hits at some point, right? Some projects are going to be
implicated. What we think we are doing here, and I genuinely
believe this is a reasonable, balanced approach to allowing
these projects to go forward with more legal certainty, with
less stakeholder----
Senator Cassidy. So in a sense, the people who are most
directly affected, the pipeline builders, just don't have your
insights. And I don't mean that kind of snidely, I just mean
that they just don't have the fullness of your insight.
Ms. Clements. Yes, I have worked hard to engage with
Williams----
Senator Cassidy. Okay, let me stop you.
Mr. Glick, Mr. Danly makes a pretty good case. You are
asking a pipeline guy to figure out how to mitigate. Now, I
think I saw you maybe shaking your head no, but if a pipeline
guy, how is the pipeline person supposed to mitigate that at
the wellhead and at the consumption, and Mr. Danly suggests
that the word ``encourage'' is a latent pregnant phrase. Do you
agree? Disagree? And by the way, how do they mitigate? Because
that seems to inject the uncertainty that Ms. Clements says we
are trying to avoid.
Mr. Glick. So we ask and sometimes require companies to
mitigate all sorts of environmental impacts.
Senator Cassidy. No, that is different because if I am
building a pipeline and I mess up a wetlands, I must mitigate.
Mr. Glick. Right.
Senator Cassidy. But if I am pumping gas, and the guy
burning it down at the end does it inefficiently, then that is
not my mess. That is his mess.
Mr. Glick. Well, I understand the legal distinction. The
point is, the court told us that it is his mess, it is the
pipeline's mess.
Senator Cassidy. No, no, no, no, no, no, no. My
understanding was the decision--am I wrong on this?--that you
had to do an inventory of it, but you did not necessarily have
to require mitigation?
Mr. Glick. That is correct. But the court also said that if
the greenhouse gas emissions were significant, including if the
downstream gas emissions were significant, the Commission could
reject a project based on that.
Senator Cassidy. Now, ``could'' is not ``shall.''
Mr. Glick. That is exactly right because it depends on a
case-by-case basis.
Senator Cassidy. But I am getting a sense from Mr. Danly
and Mr. Christie that you all are kind of interpreting a
``shall,'' and that is certainly how it is being perceived by
the people doing the $6 billion financing, as opposed to
``could.''
Mr. Glick. Yes, and I think you are right. I think there is
a misunderstanding about what ``shall'' is versus ``could,''
and I think that is exactly right. And I want to make it clear
that we actually say that for downstream emissions we're not
going to require you to do it, to mitigate, and I said----
Senator Cassidy. And then what about upstream? If the guy
at the wellhead is flaring, are you going to require mitigation
for that?
Mr. Glick. The same--we're not going to require that.
Upstream is very difficult to find--I'm not saying you can't
ever do it, but the Commission has never found upstream
emissions----
Senator Cassidy. So just to put a point on it, the only gas
that you are going to require them to mitigate would be the
fugitive gas associated with the pipeline operation itself?
Mr. Glick. And construction, yes.
Senator Cassidy. And construction.
Now, Mr. Danly, that actually seemed like that would give
certainty. Okay, I am not having to worry about the guy burning
at downstream, the guy pumping at the upstream. It is only my
fugitive gas and my construction. How would you react to that?
Mr. Danly. Those are not the terms of the policy statement
as issued.
Senator Cassidy. So hang on. We have a question of fact
here. I am a gastroenterologist, okay, and so I am just trying
to figure this out. You are saying we got a certainty policy,
which to me seems reasonable, and you say that's the not the,
kind of, statement of the policy?
Mr. Danly. That's correct.
Senator Cassidy. Mr. Christie, who's right?
Mr. Christie. Mr. Danly is right on that one because what
the policy says is, if you expect to get this thing approved,
you've got to propose mitigation. It's not a choice.
Senator Cassidy. Mr. Glick, this is--help me out here,
brother.
Mr. Glick. There are two types of mitigation we're talking
about. Mitigation on direct emissions and construction and
operation. Yes, exactly right, Commissioner Christie, the
policy statement says you have to propose it if it's going to
be significant, as we require all these other environmental
impacts, but if it's downstream emissions, you do not have to
propose it, and we say that explicitly in the policy statement.
Senator Cassidy. Now wait a second. How do I mitigate the
fact that a guy is burning a diesel truck in order to haul
material to a pipeline site and a bulldozer is leveling the
ground and, you know--you follow my example?
Mr. Glick. Yes.
Senator Cassidy. The pipeline operator has to mitigate that
cost of construction?
Mr. Glick. The courts have not directed us on that point.
So I would argue that----
Senator Cassidy. But you just included that as part of your
example. You said both the fugitive and the emissions
associated with construction.
Mr. Glick. If it's associated with the construction of the
pipeline and the operation of the pipeline.
Senator Cassidy. Now, the construction--I just gave you
three examples--the diesel truck, the bulldozer, and the crane.
Yes or no, they have to mitigate that emission?
Mr. Glick. Well, maybe I misunderstood your hypothetical,
but if it actually relates to the construction of the project
then yes.
Senator Cassidy. Now, we don't do that for roads.
Mr. Glick. We don't?
Senator Cassidy. No, when you build them, when you build a
highway, if I build a highway to Maine, I am not required to
mitigate the emission profile of my diesel truck hauling
gravel.
Mr. Glick. That is not related to construction of the
project. I mean, as I said before, if the court were to find or
the Commission were to find that it's related to construction
of the project, then yes.
Senator Cassidy. That is pretty broad. Now, how many
degrees do you go out? Does that include the manufacturer of
the bulldozer?
Mr. Glick. I know this isn't going to be satisfactory, but
it's on a case-by-case basis. You have to----
Senator Cassidy. No, but there has to be some guideline and
I want to be firmly on these two guys. If it is going to be
only first degree, the gasoline you burn, that is one thing.
But if it is going to be second degree, the energy required to
bring the crane to the site, okay, that is second degree. And
then third degree would be the people pushing the paper, and
how much is the electricity?
Mr. Glick So it's not, as I understand, as we've been
applying it to date, the impact associated with bringing
material to the site is not considered a direct environmental
impact. If you're actually talking about the trucks onsite that
are digging up the ground, for instance, and using fossil fuel
to power their equipment, then yes, that is considered a direct
emission.
Senator Cassidy. So this is kind of a back door way to get
them to buy electric vehicles?
Mr. Glick. No.
Senator Cassidy. Well, it works out to be that way
functionally.
Mr. Glick. I don't know how it's going to work out. All I
can tell you is----
Senator Cassidy. Because that, you know, theoretically you
have an emission that is first degree if it's an electric
bulldozer as opposed to a diesel bulldozer.
Mr. Glick [continuing]. All I can tell you is that we're
trying to apply the law here as the courts have interpreted.
Senator Cassidy. No, but it does not seem like the courts
told you to include the cost of the gasoline in the gas tank.
The courts--I can see fugitive leaks from a pipeline. I totally
get that. I totally get that, but not upstream, not downstream,
which you say is not part of it. So that is good. But then the
bulldozers and the tractors, I have to admit, I am a little
confused by, but on the other hand, I am way over my time, and
you have been very forbearing.
The Chairman. Now we know why you are a gastroenterologist.
Senator Cassidy. Passing gas, brother. Methane.
[Laughter.]
Senator Cassidy. But I do think that going back to what
Senator Hickenlooper said, if this is just an issue of us
passing a law that you were to consider only those emissions
associated with fugitive leaks and/or a criteria that would
otherwise be similar to that required to build roads, that
could be common ground between these two sides if what they are
telling us is true that they are not requiring upstream and
downstream. And the only thing that seems to be a variable here
is the bulldozers, tractors, and cranes. Maybe that is our
middle ground, Mr. Chairman.
The Chairman. We are going to find out before this meeting
is over, sir.
Senator Cortez Masto.
Senator Cortez Masto. Thank you, and I am all about finding
middle ground, and I think we can. So let me just clarify what
I have heard in this important discussion.
Commissioner Christie, is it your position that FERC does
have the ability to regulate greenhouse gas emissions or not?
Mr. Christie. FERC has the authority, and Senator King
mentioned methane. If the pipeline facility that is the subject
of the certificate is leaking methane or has the potential to
leak methane, FERC has the authority to mitigate the leakage of
the methane from the pipeline facility. What this policy
statement does though, is say something infinitely bigger than
that.
Senator Cortez Masto. Well, can I stop you there? That is
after the fact.
Mr. Christie. Okay, sure.
Senator Cortez Masto. That is after the pipeline is built.
Mr. Christie. Yes, they can attach conditions to the
certificate to control methane emissions during the operation
of the pipeline.
Senator Cortez Masto. Okay, and which you would, I would
assume, try to do because the goal here is to prevent
greenhouse gas emissions.
Mr. Christie. Yes. In my dissent I said that that is the
kind of thing that FERC could do and should do.
Senator Cortez Masto. Okay. So what is your concern then
with the policy?
Mr. Christie. Because the policy went way beyond that and
said, after the gas has left the pipeline, globally, which FERC
has no jurisdiction over global use, we don't have jurisdiction
over combustion and use in the United States, much less
jurisdiction over Europe or Asia or another part of the world.
What the policy says is because global climate change is a
major policy question, a major threat, we're going to require
pipeline developers--we're not going to tell them they have
to--but we're going to say if you really want to get this thing
even considered for approval, you are ``encouraged'' to propose
mitigation of downstream global impacts.
How can a transportation service mitigate the use of the
gas way beyond the pipeline?
Senator Cortez Masto. Thank you. And let me say, I only
have so much time. Chairman Glick, do you interpret the policy
that way as well?
Mr. Glick. The courts have required us to examine the
impact of those greenhouse gas emissions even downstream. So we
said if you want to propose mitigation, and some companies have
proposed mitigation already to do that, you can do that, but
we're not going to require that.
Senator Cortez Masto. And Mr. Danly, is your interpretation
that the courts have not required that?
Mr. Danly. They certainly have not required mitigation. In
fact, they have been explicit that no mitigation is required.
What is required is an upward-bound estimate and an explanation
for why we cannot assess the actual amount of damage done to
the environment by discrete project.
Senator Cortez Masto. And Commissioner Christie, do you
agree with that interpretation that the courts have not
required that?
Mr. Christie. Yes, Senator.
Senator Cortez Masto. And then, Mr. Glick, do you agree?
Mr. Glick. No, Sabal Trail----
Senator Cortez Masto. Okay, that is why we are here. Yes,
as an attorney, somebody who, I think there needs to be this
common ground--we figure out here this common ground.
The Chairman. You are a prosecutor.
Senator Cortez Masto. Yes, and so I just thank you for this
conversation because we clearly see. I actually do agree with
Senator Heinrich. Thank you all for being independent. I think
you should be and stay that way. It is so important, but we do
have a role to play here in Congress, after hearing, clearly,
look it, clearly the courts are going to weigh in, one way or
the other and slow these down if there is a stakeholder or
somebody that has concerns. It is just going to happen. I
understand what you are trying to do to take those court cases
into consideration, and based on what we are all talking about
is reducing our carbon footprint. We are all talking about
reducing carbon footprint. How do we protect the greenhouse gas
emissions?
So it is not unreasonable for this policy to come forward.
I do think it sounds like there is the potential to narrow it,
clarify it a little bit more in this conversation. So I am
going to stop there because I think we have talked this to
death right now, but thank you so much, all of you, for your
comments today.
The Chairman. Thank you, Senator.
Senator Marshall.
Senator Marshall. Thank you, Chairman.
Chairman Glick, we will start with you. Can you put any
type of a price range increase you think these rules will have
on consumers? Is it going to increase the cost to consumers one
percent to five percent?
Mr. Glick. No, Senator. As a matter of fact, arguably, it's
actually going to reduce costs for consumers by reducing legal
uncertainty.
Senator Marshall. Okay.
Mr. Danly, we live in a time when our European allies are
struggling to get natural gas, and one of the options, besides
coming from Russia, of course, is coming from the United
States. Do you think this rule will impact our ability to
compete against foreign producers?
Mr. Danly. Yes, it will chill investment in LNG facilities.
Senator Marshall. Okay. Okay.
Mr. Christie, how do you feel about that? Do you feel like
it will impact our ability to compete in foreign markets?
Mr. Christie. Well, it will reduce supply. Let me just say,
in terms of the price and relative to the Chairman's statement,
you know, Econ 101 says that price is set by supply and demand,
and what this is going to do is to deter the creation of
supply, and the transportation of supply, so when you strangle
supply you get a higher price. That's just Econ 101.
Senator Marshall. Could you see the price going up on a
range of one percent, two percent, and five percent because of
the strangling of the supply?
Mr. Christie. Oh, I wouldn't dare make a prediction like
that, but if you look at prices in Europe, they have
skyrocketed, and largely because Europe has followed policies
for a decade of strangling the supply of natural gas----
Senator Marshall. And I am not sure if I got your answer on
the question if you thought this would impact our ability to
export gas to our European allies.
Mr. Christie. Again, if you reduce supply, you don't have
enough, you reduce the supply to export or use domestically. So
you reduce use both ways.
Senator Marshall. So that is a yes.
Mr. Christie. Yes, sir.
Senator Marshall. Okay. All right.
I am trying to word my next question here. We will go back
to Mr. Danly. Do you think that this could have a significant
impact--these rules could have a significant impact on
competition, investment, productivity, innovation, or the
ability of United States-based enterprises to compete?
Mr. Danly. Yes.
Senator Marshall. Okay.
Mr. Danly. When you chill investment on the front end for
major capital-intensive projects that is always going to cause
everybody in the value chain from production down to
consumption to have problems, and it's going to cause scarcity,
and it's going to raise prices. Every time. It's the
ineluctable physics of the way economics functions.
Senator Marshall. Go ahead, Chairman.
Mr. Glick. Thank you very much, Senator.
You know, you talked about LNG facilities and the need to
export to Europe, and obviously we're well aware of what's
going on. I think we need to ask ourselves a question. I wish
we actually were really debating this issue because it's much
more, I think, essential. FERC has approved 18 LNG facilities.
Only nine of them have been built. I think we need to think
about it. FERC, Congress, other policymakers, why those other
nine haven't been built. There's a lot of demand out there.
There's a lot of need for U.S. gas to be exported, and they're
not being built. I think a lot of it has to do with contractual
issues and getting financial certainty.
Senator Marshall. I think it is a great question, and I
wish the White House would answer that question. I will tell
you right now that people in the oil and gas industry are
scared to death to invest money in this field because the White
House has declared war on the oil and gas industry. We cannot
get the banks to loan us money. We cannot get people to invest
in it because we are so scared of the future that this White
House is painting for oil and gas. And the concern is, do these
rules, you know, accentuate that or not?
Mr. Glick. I would think that if the project has already
been approved, and the White House and the Department of
Energy, in this case, have already approved the export of that
gas; it's a financial issue, absolutely. I don't think it
necessarily has to do with existing policy related to
production or not.
Senator Marshall. I yield back. Thank you.
The Chairman. Thank you, Senator.
Senator Hirono.
Senator Hirono. Thank you, Mr. Chairman.
It is pretty clear to me that FERC cannot keep making its
decisions the way it has been because you have a court and
maybe other courts telling you that you can't. And so I see the
need for a change in how FERC is going to operate.
So I have a question for Commissioner Clements. You have
heard the criticism today that it is beyond FERC's authority to
incorporate greenhouse gas emissions on these projects into
FERC's determination of a need and public interest in the
project. So, you know, the public convenience and need, that is
a term of art, isn't it? Isn't that a legal term that is
supposed to be applied by FERC in making its decisions?
Ms. Clements. Yes, it's understood to be a broad standard
that exists in Section 7 of the Natural Gas Act.
Senator Hirono. Yes. So we should apply the words, ``there
should be a public need, and there should be public
convenience.'' So for FERC to have operated as though the
public need was evidenced by the fact that there was a contract
for this kind of facility to be built, even if the contract was
between companies that were corporate affiliates, that that
presumptively meant the public need is, in my view, outrageous.
So the court has told you that you have to look at greenhouse
gases, and so you have revised the FERC's approach. Do you find
it puzzling to be told that on the one hand FERC has the
discretion under the Natural Gas Act to effectively narrow its
assessment of need to the existence of a contract against being
simultaneously told that FERC cannot consider climate change
impacts when determining the public need and necessity for the
project?
Ms. Clements. Thank you, Senator.
You raise an important point that I fear is getting lost in
this conversation a bit, and that is that the new policy
provides increased specificity around the evidence that project
sponsors can provide to the Commission to demonstrate need. So
there is more opportunity to be clear that your proposed
project has a reliability need or some sort of energy security
implication that will be balanced in the process. Nothing in
the revised policy statement takes away the half of the
proposal that is the benefits of the proposal. Those are right
up front in the needs determination.
Senator Hirono. I agree with you, and for the Commissioners
who take the position that somehow that FERC should not be
considering greenhouse gases in its determination, I don't know
how that kind of position can be sustained based on what the
courts are telling you folks. And for you, for FERC to narrow
its own authority is also somewhat puzzling to me.
For Commissioner Phillips, you mentioned your support for
including environmental justice and equity concerns in FERC's
decision-making. So that says to me that these kinds of
concerns are not particularly considered or adequately
considered. So what does the updated policy statement do to
improve FERC's engagement with these communities?
Mr. Phillips. Thank you for the question, Senator.
It is clear from recent court precedent that the Commission
has not done enough. The court in Vecinos just last year told
us that we did not properly consider environmental justice
communities. And this policy gives a real opportunity for those
communities to be heard on the front end. And what happens
often in these projects is that if you have a disadvantaged
community, they don't have an opportunity to weigh in until
after the project is complete. This, I believe, is something
that is very valuable and one of the reasons why I support
modifying the 1999 Policy Statement.
Senator Hirono. I would say that allowing these community
voices to be heard also is very much a part of a showing of
convenience and need for the facility to be built in the first
place.
Thank you very much, Mr. Chairman.
The Chairman. Thank you, Senator.
Senator Murkowski.
Senator Murkowski. Thank you, Mr. Chairman.
The Chairman. Best for last.
Senator Murkowski. Thank you.
Well, and it is good, actually, in this case to be last
because there is a lot of wrap-up to do. I think this has been
a particularly important hearing and a particularly important
time. We are all captivated with the situation on the ground
right now in Ukraine. We are trying to figure out what some of
these policies are and how the United States can be most
helpful. It is very frustrating to many of us that this
Administration has almost effectively taken the weapon of
choice that Putin has used to help fund his effort and to gain
an advantage, and that is with energy and energy supplies.
And so, when we are talking about the current events of the
day, this is a pretty timely discussion, but for me and my
state as a producing state and as a state that has some of the
highest energy costs for our consumers out there, Ukraine is
occupying our attention now, but we have long struggled with
this. And I want to follow on with the question that Senator
Hirono has raised with regards to environmental justice in
balancing this because we are in a situation right now where
you have a very resource-rich state, but a very infrastructure-
poor one. And one reason is that it is super-expensive to
operate and construct projects in rural Alaska, we know that,
but when you have guidance out there that is putting in place,
or will put in place new barriers for basic infrastructure to
the point where it is going to be out of reach--out of reach
not only for many of the rural communities that, quite
honestly, right now are powered by diesel generation, but for
some of those communities that are not so rural.
And so at what point in time is it an environmental
injustice to make it impossible for communities to complete
projects that would lower their emissions, lower the cost of
electricity, and increase their reliability, because right now
that is what Alaskans are looking at--they are looking at this
and saying this is taking us in exactly the wrong direction
where we do not have a lot of ready, affordable alternatives.
We have the natural gas. We just need to be able to access it.
And so, Mr. Phillips, I will direct this question to you
because you and I had a long conversation, and you spoke at
your confirmation hearing about what it meant to be growing up
in a household where you are making those tradeoffs with
affordability. Tell me how this is actually going to help
either those families that you are familiar with, or the
families that I represent, because I don't see this taking us
in the right direction.
Mr. Phillips. Thank you, Senator Murkowski, for the
question.
With regard to environmental justice communities, to be
clear, the policy is not intended to use EJ communities as a
means to block projects. The intent is to make sure that we
have the voices heard of these real people--low-income, middle-
income, tribal communities. My focus is making sure that we
have a process. I have already begun working with our Office of
Public Participation at the Commission, especially with regard
to our government-to-government tribal community consultation
processes to have that conversation on the front end, and what
it will do, Senator, is it will help us avoid protracted
litigation on the back end, avoid the pain on the back end
which, quite frankly, we have seen these cases sent back to the
Commission on remand, and it just creates further delay and
further cost.
Senator Murkowski. So, sir, I appreciate conversation on
the front end, but again, if you have those conversations on
the front end and it is clear that what we have put in place
are barriers to those communities who need these alternatives,
and it is almost feasibly impossible to address them. You have
not done anything other than have a conversation. And what I
think people are asking for is, they want to see it translate
to them, to their families and their communities.
I want to quickly in my remaining time ask about the
ability for the United States right now, in light of all that
is going on with Russia's war in Ukraine--this policy could not
come at a worse time, I believe, when we are trying to improve
the United States' ability to respond to international events,
acts of war, and to provide alternative sources of LNG to our
allies abroad. And I, maybe that is not a question, my time is
over, but I think we have to recognize that you are putting in
place policies or guidelines or a framework, to use your term,
that for the long-haul are going to be harder and harder on
communities like I represent, and then for the immediate term
when we are dealing with a truly international crisis, our
ability, as a producing nation, to respond, we are handcuffing
ourselves and our ability to provide a level of support that, I
think, other countries look to us and say, what is happening in
the United States? Why would you throttle not only yourself
back, but your ability to help your allies at a time of war? I
think I have not posed a question, Mr. Chairman, and I
apologize for that.
Mr. Chairman. We expect no less.
[Laughter.]
The Chairman. It was very good.
I am going to take a little privilege here, if I can,
because I have to go to an energy call, and then Senator
Barrasso will take over, and Senator Daines, you will be right
after I say something.
Senator Daines. Of course, you bet.
The Chairman. I just want to say one thing. The only thing
I want to ask you all, first, I want to thank you all. We see
the differences. We see, you know, you are independent, should
be independent.
Did you all have a lengthy discussion and work about trying
to work your differences out at all as a group, the five of
you? And was there any compromise at all? And I will give you
the one compromise that seems very, very easy, which is just
delaying your effective date. Why did you think it was so
necessary to go back? Whoever wants to say anything.
Mr. Glick. Mr. Chairman, if I can?
The Chairman. Yes, go ahead.
Mr. Glick. So a couple things. First of all, yes, we did,
as we do all the time, we did have a very lengthy discussion.
We have----
The Chairman. Was it dispirited?
Mr. Glick. This issue has been dispirited for a couple
years, so, yes. It has been very spirited. I wanted to say that
first of all we vote together 88 percent of time.
The Chairman. Yes.
Mr. Glick. I was doing some analysis. Commissioner Christie
and I vote together 94 percent of the time. So most of the time
we do get along, and I try to work as closely as I can with my
colleagues. Sometimes we have honest disagreements, which we
clearly do today.
I want to answer the question about why we didn't just
wait, why we didn't defer this, and the reason is because we
have a number of orders that were pending that, as I said,
we'll get the orders out when we have the votes. We didn't have
the votes. I can't go into more detail about why that is the
case, but we didn't have the votes. And because of that, we
needed to provide greater----
The Chairman. You didn't have the votes, the five of you
did not have the votes in order to make----
Mr. Glick. We had four for a long time, and we didn't have
the votes.
The Chairman. Okay, I got you.
Mr. Glick. But you know, I am not permitted to go into the
details.
The Chairman. No.
Mr. Glick. But nonetheless, the point being is that we are
trying to move these orders and, you know, we have gotten a
number of letters from Senator Barrasso, and a point has been
made time and time again, we shouldn't be delaying these cases.
And so we're not trying to delay these cases. That is why we
put this policy statement out to provide guidance for everyone
so we could move forward and hopefully meet what the courts
have told us to do.
The Chairman. Yes.
Mr. Christie. Mr. Chairman.
The Chairman. Mr. Christie.
Mr. Christie. You know, on the question of voting, Chairman
Glick sent a letter to Senator Barrasso just two days ago and
answered the question, will you reconfirm that the Commission
will not put any application under review on hold, and the
answer was yes, I reiterate my commitment to put up certificate
orders when there are votes to prove them. It sounds like a
standard. We are only going to get to vote if the three members
in the majority want to vote on a pipeline project. Otherwise,
we're not going to get to vote on them, which, of course,
denies the applicant who loses on a 3-2 vote the ability to
appeal.
Mr. Glick. Can I answer that just quickly, Mr. Chairman?
That is completely untrue. I have put orders up that I have
disagreed with. As a chair I would never--I am not going to
stand in the way, even if I disagree with the majority of the
Commissioner votes. I am always going to put the orders up for
a vote, even if I disagree with the order.
The Chairman. Mr. Phillips.
Mr. Phillips. Thank you, Mr. Chairman.
I just want to note that your concerns about both consensus
as well as the impact of our decisions, they are my concerns.
We share the same concerns, especially when you talk about what
Senator Murkowski was mentioning about Ukraine. I understand
the geopolitical implications of our decisions and I believe,
Senator, that our decisions aren't made in a vacuum. It's not
lost on me, the impact. And so, as we go forward, I am
committed to making sure that if there's a better framework, if
there are reasonable, legally durable modifications that we can
make to these policies, I am committed to doing so.
The Chairman. I just want to make one final statement, if I
can. I differ with my party, and I differ with my
Administration and the President on this issue on energy. The
world is weaponizing energy. Putin is not backing off. He has
weaponized energy, and he will continue. And if you are going
to be the superpower of the world, you have to be able to
deflect that and be superior in that, and the only thing I
would say to all of you, when I was Governor, I said our job as
government is to be your best partner, not your provider, but
your partner. In a partnership, it is a two-way street. And I
said, so when my Department of Environmental Protection went
out to address environmental concerns, I said, try to help
companies make the changes to their environmental practices so
they will be compliant, rather than letting them go through the
timelines and the cost and then turn them down at the end.
And I think that is the uncertainty that goes on in
government today. I think all of you made a point here, but we
know the uncertainty is extremely costly. I am going to give
you one example that I am very much involved in because I know
what is going to happen. If the Mountain Valley Pipeline is not
completed, and it is 95 percent done, over $5 billion, twice
the cost because of court battles and rejections. If that one
is not built, there will not be another investment taking the
most abundant, plentiful gas reserves out of an area that can
basically backfill domestic gas supply so that we have surplus
LNG to export, to be able to defend our great country, and to
help our allies have the freedoms they want.
So it looks like Chairman Glick, and to my Democratic
Commissioners here, that this is an impediment. Industry is not
going to invest if they don't have certainty. They are done.
They are walking away, and all you have done is accelerate the
walk-away. I am going to have an energy call right now. I am
asking, I am begging the major producers to step up production
because we are going to shut off all petroleum, all fossil
projects, all fossil energy coming from Russia to the United
States. We should at least do that to support the Ukrainians
and to support the rest of the world so Putin does not have the
amount of resources that he would like to have to use against
us and the Western world and the freedoms that we enjoy.
And I know exactly what is going to happen. There are going
to be people in America who say it is going to raise American
gas and gasoline prices. There is no way in the world it
should, and I have to make sure that these companies do not put
profit and their shareholders above what the necessary needs
are that we have. And I think they will step up to the plate.
But if we don't, you know, right now have the gas, we are not
going to have the LNG. We are not going to be able to do what
we need to do. That is my concern. I want an all-in energy
policy. The transition is going to happen. I am all for the
transition. It is going to happen. But with that, I am not
going to accelerate it to get rid of the reliability that we
have. I am just not going to do it.
So I know I spoke to a few of you, and I got very upset. I
feel this so personally that this is self-inflicted. And I
guarantee you one thing, the public will not stand for that. So
I would ask you all to really, truly consider--just consider
delaying the policy statement. Consider the input you received
today, and I am sure you will hear from the public. Just give
them a chance. I think that is your responsibility. I really
do. I hope you would consider that.
And with that, I am going to turn it over to Senator
Barrasso to take over, and I think you have Senator Daines
next.
Senator Barrasso [presiding]. Senator Daines.
Senator Daines. Yes, let's go to Senator Hoeven here. So
thank you.
Senator Hoeven. Thank you, Senator Daines, and I appreciate
your deferring to accommodate timelines. So thank you very
much.
For Commissioners Christie and Danly, some projects still
pending a decision from FERC were filed over two years ago with
final environmental impact statements already completed. Is it
fair to move the goalpost and subject existing project
applications to new requirements?
Mr. Danly. I think it is not only unfair, I think it is
economically catastrophic. You are telling the entire private
investment community, upon whom we rely to pay for this
infrastructure, that none of the assumptions that they base
their investment decisions on, none of the assumptions that the
basic economics, the fundamental economics of their projects
can be relied upon.
Senator Hoeven. Commissioner Christie.
Mr. Christie. I think changing the rules in the middle of
the game is patently unfair, and I also think as a legal
matter, it's arbitrary and capricious.
Senator Hoeven. So will these environmental impact review
statements have to be done again? And what does that mean in
terms of timeline and cost, and to the Chairman's point, people
at some point throwing up their hands and walking away from
projects?
Mr. Danly and then Mr. Christie.
Mr. Danly. There's no particular reason why once a NEPA
document is completed it has to be done again. Though,
unfortunately, over the last year, we've seen that happen in
several cases.
Senator Hoeven. Commissioner Christie.
Mr. Christie. Senator, by the terms of the policy it does
apply to pending applications. So yes, the requirements are
applicable to pending applications.
Senator Hoeven. And then, what does that mean in terms of
costs for consumers?
Commissioner Danly and Commissioner Christie.
Mr. Danly. I think probably the most startling part of
these policy statements is that as far as I can tell, none of
the cost to consumers as a subject actually factored into the
consideration of the issuance of these. There's no discussion
in the policy statements about calculations or research as to
what it was going to cost consumers, though, there are some
vague references to, you know, greater certainty of the future.
Those are all first-principles questions, and we did not
conduct that analysis before issuing the statements.
Senator Hoeven. Commissioner Christie.
Mr. Christie. Senator, we're going down the same road
Europe went down 10 years ago. We are strangling supply of
natural gas. And just like Europe, when you strangle supply,
you're going to drive up the price. And Europe right now is
suffering through skyrocketing energy prices for gas and in
consumer's bills for electricity. And it's just supply and
demand. When you strangle supply, the price goes up.
Senator Hoeven. To pick up on your point, Commissioner
Christie, let's talk about New England. New England lacks
pipeline capacity. Not long ago, 10 of our colleagues on the
other side of the aisle sent a letter to the Administration
saying do not export LNG because we are worried about LNG
capacity in America. In my state we have stranded natural gas.
We can't get it to markets because we don't have pipeline
capacity. New England maybe being the best example of
constraints, which is why the Senators wrote saying do not
export at the very time we should be exporting more to Europe
so that they don't have to depend on natural gas from Russia.
Talk to me about--and maybe Commissioner Christie go first,
if you would--talk to me about New England as an example of
constrained capacity because of pipelines.
Mr. Christie. Well, there is constrained capacity, and ISO
New England, which is a system operator in New England, has
cited that very constraint due to pipeline constraints for
threatening ultimately the reliability of the electric grid. So
I think it's a very serious issue. Gas is the major source
today of our electric generation in the United States. And if
we cut off the supply of gas, obviously, that is going to
affect electric reliability, and it's going to drive prices up.
Senator Hoeven. And it forces us to rely on home heating
oil transported by vehicle with poorer environmental standards
than using natural gas. Would you agree with that, Commissioner
Christie?
Mr. Christie. Yes, I would, because remember, the
pipeline--I mentioned this earlier--a pipeline is a
transportation service. It doesn't produce gas. It doesn't
consume gas. It transports gas. And if you can't transport gas,
then obviously, it renders it useless. And I think that is the
whole point of this national campaign of bringing lawsuits
against every single natural gas pipeline, is to cut off the
ability to transport gas from the production to the
consumption.
Senator Hoeven. Commissioner Danly, talk about this
balancing test. What is the point of this balancing test, and
what are the real-world ramifications of it going to be?
Mr. Danly. So I think as a general premise, and this shows
you my judicial minimalist streak, every time you get a
multifactor balancing test that is going to be done on a case-
by-case basis by an administrative agency, what you effectively
have is the irrigation of power to pick winners and losers at
the whim of the decisionmaker. And that will be the case here.
I predict that we are going to see favored parties being given
the nod, and those who aren't will have their applications
rejected, and the real-world consequences will be supply
constraints and rising prices.
And I'd like to point one thing out about the LNG export
thing you raised earlier, sir. I am very sympathetic to the
concerns about rising prices. And of course, when you export,
that changes the total supply and demand. If we had a properly
functioning economic system and regulatory system, that
wouldn't be a problem.
Senator Hoeven. Right.
Mr. Danly. Because prices would rise that would incentivize
investment in new infrastructure that would then increase
supply, and prices would drop again. That cannot happen when
you chill investment from the beginning. We will never be able
to approve the number of pipelines, the Section 7 applications
that weren't filed, right? This is a hypothetical that we will
never know, but it will chill investment, and we have already
had submissions in the docket saying just that.
Senator Hoeven. Thank you to both of you, I appreciate it.
Senator Barrasso. Senator Daines.
Senator Daines. Chairman Barrasso, thank you.
I am deeply disappointed in FERC's recent partisan decision
to make it more difficult, more costly, and more convoluted to
build new natural gas pipelines in the United States. On
September 30th I had Ukrainian leaders in my office who were
pleading with us to shut down the Nord Stream 2 project and
continue to build out U.S. capacity because they saw what was
going to happen. That was well before the buildup on the
Ukrainian border was happening with the Russians. What we are
talking about here is not just hypothetical think-tank, New
Green Deal ideology. This is reality. And the consequences the
world is facing right now are severe, and it is hitting the
American people as well, our pocketbooks, and this is a warning
shot. Do not, please don't follow the path that Germany went
down with green ideology to shut down nuclear plants, shutting
down 11 nuclear plants. They have three more they are going to
shut down, and what did that do? Despite policymakers, some,
who saw the reality of energy saying you can't do this, they
yielded to green ideology zealots, and now Germany is paying a
price. The world is paying a price. And please don't allow
America, for the sake of our kids and our grandkids, to end up
because of policies here that are going to constrict U.S.
energy transport as well as production.
The U.S. should be removing roadblocks to supply ourselves
and our European partners with reliable and affordable American
natural gas, not putting up new ones. These recent actions by
FERC are the next chapter in the Biden Administration's efforts
to roll back American energy production. Anyway, you can say
what you like to try to spin it, but that's what is actually
happening. As Chairman Manchin mentioned, it is chilling
capital markets. It is chilling long-term investment, and these
pipelines are long-term investments, and you are chilling the
investment, and we are going to pay even a more severe price as
the years continue to go on. If Biden was serious about
stopping Putin, he would unleash American energy production. I
would have liked to have heard that in the State of the Union
Address. He should have stood up there and said we need unleash
more made-in-America energy, increase oil production three to
five million barrels a day, get the Keystone Pipeline operating
again. And I recognize the Keystone Pipeline is not going to be
the one thing that is going to save us. We have 70 pipelines
coming into the United States from Canada.
But for heaven's sake, why would he want to kill that
pipeline? Why? It sent a message, is the issue. It is sending
message to investors. You basically are putting them on notice
saying you better not be putting investments because of ESG
requirements and so forth into more oil and gas production. It
is wrong. FERC has been and should remain an economic and
safety regulator, not a climate panel. Not only will FERC's
actions make it more difficult to expand natural gas
distribution, it will threaten and delay existing projects,
putting on the line high-paying jobs and revenue for some of
these rural communities. The United States should be promoting
domestic development, promoting transportation of natural gas,
removing barriers to that end, to supply ourselves and our
allies, not kneecapping energy providers.
Commissioner Christie, in your dissent you say, and I
quote, ``the new policy threatens to do fundamental damage to
the nation's energy security.'' Could you further explain to
this Committee how damaging this action will be for U.S. energy
security, especially in light of what is going on at this very
moment in Ukraine?
Mr. Christie. Well, Senator, you made a reference to
Germany. The German government, just last week, announced a
major fundamental change in their policy that they followed
over the last decade. The German government said they were
going to build two new LNG import facilities on the Baltic
Coast. This is a radical change for Germany, which has been
shutting down gas production, basically, for more than the last
decade. And interestingly enough, the German government
includes the Green Party, which has been one of the leaders in
trying to shut down gas production. So they have come face to
face with reality in the last couple weeks.
But where is that LNG going to come from that Germany is
building these LNG facilities? Well, I am sure they'd like it
to come from the United States. So, if gas is a resource that
we have, you either exploit it, as Chairman Manchin has
mentioned repeatedly today, or you strangle it. And I am afraid
this policy is really about strangling supply of natural gas.
Senator Daines. Yes, and we can't let, you know, the
Democrat Party is becoming the Green Party in this nation. I
grew up, my Grandpa Daines was a die-hard Democrat. He would be
rejecting these policies today that lack common sense to what
is going on. And the problem is, once you get to a point of a
war, the damage is done, and we need to be--these are long-term
strategic directions we are setting for our country right now.
And I am not opposed to renewable energy. We just want an all-
of-the-above energy portfolio. We are proud of the fact in
Montana, we have solar. We have wind. We have hydro. We also
have coal, natural gas, and oil. And if we lose this balance
and allow this country to shift, embracing, basically, the
Green New Deal, and you can spin it how you want, but that is
what's actually happening. It is very, very dangerous for our
country and for the entire world. And just turn on the cable
news right now, look at your--and when you see the tragic
outcomes when you allow a dictator to start having energy
dominance in the world and it threatens our country, it
threatens the entire world.
Thank you, Mr. Chairman.
Senator Barrasso. Well, thank you very much, Senator
Daines.
And I would point out that I think I repeatedly heard
President Biden say, build it, made in America, this, that, and
the next thing, and it must have been eight or nine different
things during the State of the Union, but energy was not one of
them, to your very point. Thank you.
Senator Cassidy.
Senator Cassidy. Well, I left and I came back after
meditating on what I heard.
Mr. Glick, I felt like I made progress and that it appears
that according to your analysis, although I think my two
minority would disagree, this only pertains--the mitigation--to
fugitive and to construction-associated greenhouse gases. I
will come to that in a second.
But then as Cortez Masto was asking and asked about the
mitigation and then I think this kind of pivots on the word
``encourage'' because my minority members feel like that is a
coercive, pregnant--you have a lot of ``encourage''--you better
do it, sort of thing, if you want to get it done. And you are
kind of soft pedaling as in no, it is very limited here.
But when Cortez Masto asked what about people mitigating
and you said, kind of with a triumphant voice, or at least a
very pleased voice, yes, there are some operators who have
already offered plans to mitigate downstream emissions. Now,
that tells me they did not understand it is only the fugitive
and the construction-associated emissions, and it also makes me
think that Mr. Danly is right in terms of his interpretation as
this is a word pregnant with the potential for coercion and
denial of a permit.
So I got a little bit of disconnect between what I have
been told and what I heard.
Mr. Glick. Thank you, Senator. I don't know about the
triumphant voice, but I will try to explain further. There are
an enormous number of environmental impacts that we look at,
the Commission looks at for every proposed natural gas project,
all the way from wetlands and water quality and air quality. I
mentioned a whole bunch of them earlier. I am not going to do
that again for the record. But the point is, sometimes we
encourage companies for all those potential impacts to come in
and mitigate those impacts to the extent they can, and if they
can't, sometimes we require--if they don't come in with the
proposed mitigation--sometimes we require additional mitigation
and sometimes we don't, depending on, again, a case-by-case
basis, depending on how significant we think the impact is
versus how beneficial we think the project is. And that, again,
we have to do that on the facts of the particular case.
So again, for downstream emissions we are not going to
require--and we say this explicitly--greenhouse gas emission
reductions. That doesn't mean companies can't come in and
propose it.
Senator Cassidy. But why would they do so? Why would they
take on that extra expense? It makes me think they felt they
were more likely to be approved if they presented a plan to
mitigate, which gives me a thought that Danly may be right
after all.
Mr. Glick. So when the Commission considers a project, as
the courts have told us, we have to consider the adverse
impacts versus the benefits. The greater the benefit of the
project, the less the concerns are about the adverse impacts to
the extent there aren't significant benefits with the project
or there are some benefits, but not significantly, they don't
significantly outweigh the adverse impacts, then it's more
likely companies come in and try to mitigate those adverse
impacts. So it depends, again, on a case-by-case basis.
Senator Cassidy. That actually seems to start veering more
toward Danly. What you told me was very saccharine--only
fugitive and construction--but if you make a judgment that the
downstream impact outweighs the benefit, and I don't know how
in anything but a centrally planned economy you can imagine
that, since markets would substitute. There may be a downstream
use that you have no clue, ultimately no clue what it is going
to do. It may be a downstream and the market will decide, and
that will be regardless of what your consideration is.
Mr. Glick. If those downstream emissions are not reasonably
foreseeable, and the court say they're not always reasonably
foreseeable, then we can't consider them.
Senator Cassidy. Lastly, I am struck about the construction
aspect because we don't require that on roads, and we don't
require it on bridges, but you are requiring it here. Are you
requiring it on the greenhouse gas impact of making cement? For
example, if cement is required as a base for a support system
for the pipeline, is the greenhouse gas profile of the
manufacturing of the cement part of the consideration?
Mr. Glick. We don't do that, sir. And I would say that with
regard to construction projects, we always look at other
environmental impacts associated with those construction
projects, such as NOX emissions, such as
SOX emissions, particulate matter related to the
equipment that is brought upon, like, for instance, to do the
construction.
Senator Cassidy. That is a very local effect though. That
is not a global effect.
Mr. Glick. In most cases, that is correct.
Senator Cassidy. Mr. Danly, I would just like--and the
Chair is being so forbearing--the last word to you. If it is
only fugitive emissions and only construction, whatever I think
of that, is that a more manageable regime than having to
mitigate upstream and downstream?
Mr. Danly. That is more manageable. That is not what the
policy statements call for. What it says is that the Commission
encourages--and we can load that with however much coercion you
want as you read it--it encourages the project sponsors to
propose mitigation for reasonably foreseeable downstream
emissions, and it then states that the Commission will take
that into account in its public interest determination. So I
think you'd have to be pretty innocent in your outlook to
believe that that is not going to weigh heavily on the minds of
any potential project sponsor. One doesn't typically go to
one's regulator and flout the regulator's expectations.
Expectations are strong things, and so are encouragements, and
let's not allow the financiers that pay for our infrastructure
and invest in it to be subject to this soft, vague coercion. I
don't like it.
Senator Cassidy. I think you are probably right. Thank you.
Senator Barrasso. Thanks, Senator Cassidy.
Look, let us close this out. Commissioner Danly, in
Chairman Glick's written testimony, he explains that the
Interim Greenhouse Gas Policy Statement ``encouraged applicants
to propose greenhouse gas mitigation measures limited to the
direct emissions caused by the project, not indirect
emissions.'' But the Interim Greenhouse Gas Policy Statement
says, ``the Commission encourages project sponsors to propose
mitigation of reasonably foreseeable indirect emissions.'' I
cannot square the two statements. What is it? Is the Commission
encouraging applicants to propose measures to mitigate indirect
emissions or not?
Mr. Danly. That is a good question, and I am sure that the
entire pipeline industry is wondering the same thing.
Certainly, if you think you have a project that is potentially
economically viable, wouldn't you try to do a belt-and-
suspenders approach, which is going to end up costing more to
consumers and be harder to get financing on commercially
reasonable terms? You know, this idea that you can--I'm sorry,
but I have to say cynically--avoid responsibility by placing it
instead on the project sponsor and say, you come up with
something, and if it pleases us--if it pleases us--we will
approve it, right? But if it doesn't please us, we may either
deny or demand unilaterally more mitigation. That is not, in
anybody's view who watches what we do, it cannot possibly
produce more certainty on the part of the project proponents.
It can't.
Senator Barrasso. So in your dissent you state the Interim
Greenhouse Gas Policy Statement is ``deliberately drafted so as
to evade judicial review.'' Could you talk a little bit more
about that?
Mr. Danly. Yes. So we were just talking about the major
examples of this where project proponents are expected and
encouraged to do things. They are not given a command. This is
hortatory. It is not an obvious command. That means then, along
with the declarations repeatedly throughout the policy
statements, that this will be done on a case-by-case basis down
the road, that it purports by its own terms not to be binding.
I would argue that this sets absolutely clear requirements
because the fear that it is going to descend upon the project
proponents to achieve these unstated goals is real. I think it
changes the declaration of our jurisdiction, and I think that
when you phrase things like that to avoid judicial review,
you're kicking the can down the road so that you can get a few
approvals. This was something that Commissioner Christie
referenced, this Potemkin village of a few approvals to get
this in the record and done and precedent set, so that then
later the more aggressive requirements for mitigation can be
applied.
Senator Barrasso. So even before Russia's invasion of
Ukraine, Europe was undergoing an energy crisis. European
families have been paying record prices for natural gas and
electricity for at least the last year due to Europe's
overreliance on renewable energy and Russian gas, among others.
So what should the Commission learn from the events taking
place in Europe?
Mr. Danly. I think that Europe offers us a startling object
lesson in how important energy independence and energy security
are. LNG export and our own internal pipeline system are
geostrategic assets that are fundamental to America's position
in the world and the prosperity and well-being of the American
people. Commissioner Christie referenced the decision for LNG
terminals in Germany. In fact, France, also, has now begun
having second thoughts regarding the decommissioning of the
nuclear plants.
There is absolutely no reason, having watched what is going
on in Europe--in the center part of Europe, but also in the
periphery--right in front of us day by day. There is no reason
not to take that object lesson. We should not wait to let those
consequences reach America.
Senator Barrasso. Yes, so I have letters from the U.S.
Chamber of Commerce, Interstate Natural Gas Association of
America, TC Energy, The American Gas Association, and others,
including companies with operations in my home State of
Wyoming, and a warning about the disastrous effects that these
specific policy statements are going to have on American
energy. Examples--TC Energy stated in their letter, ``Lower gas
prices, increased resiliency and reliability, greater domestic
and international energy independence and security, and
environmental benefits all flowed from FERC's stable,
predictable, and bipartisan framework. FERC's recent departure
from this approach endangers these gains.''
And without objection, these will be included in the
record.
[The letters referred to follow:]
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Senator Barrasso. Let me just end with Chairman Glick.
You claim these policy statements are going to bring more
certainty and that they will help the Commission's decisions
survive litigation. People who actually build natural gas
infrastructure or depend on natural gas, they do not agree.
They think the orders are going to make things worse, much
worse. They point out that these two orders go well beyond what
the courts actually require. They think this is a thinly veiled
effort to grind the permitting of natural gas pipelines to a
halt.
So my question is basically this. How are you going to fix
this?
Mr. Glick. So thank you very much for the question, Senator
Barrasso.
I would first say that I speak to those same companies, and
I am meeting with a group, a bunch of them, next week. I would
say that first of all, they have been complaining for some time
now, and they know that the previous Administration didn't do
the proper environmental analysis on Mountain Valley, ACP,
Dakota Access, Spire, a whole bunch of others, and they
complain about it. They know that it needs to be done right.
Now, whether they agree with specifically what we're proposing,
we can certainly talk about it, and we will talk about it. And
if they want clarification, we'll further clarify so we can get
a majority of Commissioners to clarify, and I assume we will.
But this is not some, you know, you mentioned earlier
partisanship, and I heard zealotry from somebody else and so
on. This is not, as I said before, I don't have any other
agenda besides making sure that we are following the law and we
are applying the facts of each case, and I am going to stick
with that because that is what we're doing here. And, you know,
different people have different views, and I certainly
appreciate that and we try, as much as possible. That is why we
split this thing up into two policy statements because we were
hopeful to be able to get at least four votes on one of them,
but unfortunately that didn't work, but we're going to continue
to try to reach consensus as much as we can.
Senator Barrasso. Well, I will just say that what you just
said gives me no confidence that you will actually fix this,
and this Committee should be prepared to use every tool
available at our disposal to clean up this mess.
Thank you for being here today.
Members are going to have until the close of business
tomorrow to submit additional questions for the record.
This Committee stands adjourned.
[Whereupon, at 12:25 p.m., the hearing was adjourned.]
APPENDIX MATERIAL SUBMITTED
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