[Senate Hearing 118-288]
[From the U.S. Government Publishing Office]
______
S. Hrg. 118-288
OPPORTUNITIES FOR CONGRESS TO REFORM
THE PROCESS FOR PERMITTING ELECTRIC
TRANSMISSION LINES, PIPELINES, AND
ENERGY PRODUCTION ON FEDERAL LANDS
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HEARING
BEFORE THE
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
JULY 26, 2023
__________
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
55-570 WASHINGTON : 2025
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 BILL CASSIDY, Louisiana
MARK KELLY, Arizona CINDY HYDE-SMITH, Mississippi
JOHN W. HICKENLOOPER, Colorado JOSH HAWLEY, Missouri
Renae Black, Staff Director
Sam E. Fowler, Chief Counsel
C.J. Osman, Senior Counsel
Richard M. Russell, Republican Staff Director
Justin J. Memmott, Republican Chief Counsel
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
Panel I
Stanek, Jason M., Former Chairman, Maryland Public Service
Commission..................................................... 5
Smyth, Antonio P., Executive Vice President, Grid Solutions and
Government Affairs, American Electric Power.................... 14
Teply, Chad A., Senior Vice President, Transmission and Gulf of
Mexico, The Williams Companies................................. 33
Panel II
Milito, Erik G., President, National Ocean Industries Association 74
Obermueller, Pete, President, Petroleum Association of Wyoming... 87
Speakes-Backman, Kelly, Executive Vice President, Public Affairs,
Invenergy 96
ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED
Air Products and Chemicals, Inc.:
Letter for the Record........................................ 133
Barrasso, Hon. John:
Opening Statement............................................ 4
Chart entitled ``Average Annual Acreage of New Federal Oil
and Gas Leases by President''.............................. 108
Business Roundtable:
Letter for the Record........................................ 136
Dream.Org:
Letter for the Record........................................ 138
King, Jr., Hon. Angus S.:
Mother Jones article entitled ``Yes in Our Backyards'' by
Bill McKibben, published May-June 2023..................... 63
Manchin III, Hon. Joe:
Opening Statement............................................ 1
Chart entitled ``Transmission Permitting Reform: Eliminate
Duplicative Reviews by Consolidating at FERC''............. 44
Chart displaying text from the Building American Energy
Security Act of 2023....................................... 46
Milito, Erik G.:
Opening Statement............................................ 74
Written Testimony............................................ 76
Responses to Questions for the Record........................ 127
National Association of Manufacturers:
Statement for the Record..................................... 140
National Electrical Manufacturers Association:
Letter for the Record........................................ 143
NextEra Energy, Inc.:
Letter for the Record........................................ 146
Obermueller, Pete:
Opening Statement............................................ 87
Map depicting lease ownership in a Wyoming basin............. 89
Written Testimony............................................ 91
Risch, Hon. James E.:
Statement for the Record..................................... 131
Smyth, Antonio P.:
Opening Statement............................................ 14
Written Testimony............................................ 16
Responses to Questions for the Record........................ 124
Speakes-Backman, Kelly:
Opening Statement............................................ 96
Written Testimony............................................ 98
Responses to Questions for the Record........................ 128
Stanek, Jason M.:
Opening Statement............................................ 5
Written Testimony............................................ 8
Responses to Questions for the Record........................ 123
Teply, Chad A.:
Opening Statement............................................ 33
Written Testimony............................................ 35
United South and Eastern Tribes Sovereignty Protection Fund:
Statement for the Record..................................... 148
Western Governors' Association:
Letter for the Record........................................ 153
Policy Resolution 2023-10.................................... 154
Policy Resolution 2022-01.................................... 157
OPPORTUNITIES FOR CONGRESS TO REFORM
THE PROCESS FOR PERMITTING ELECTRIC
TRANSMISSION LINES, PIPELINES, AND
ENERGY PRODUCTION ON FEDERAL LANDS
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WEDNESDAY, JULY 26, 2023
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The Committee met, pursuant to notice, at 9:30 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.
Today we continue the important work of considering reforms
to our energy permitting system and the state of energy on our
public lands and waters. Permitting reform is essential for
more reliable and affordable energy and to make our country
more secure and competitive. Congress took a meaningful step
forward in June with the Fiscal Responsibility Act--the debt
deal--with several common-sense reforms that I know had
bipartisan support from our Committee members. That included
firm deadlines to complete reviews, requirements that agencies
work simultaneously on a single environmental review, and
several others, but there is still much more to do. Our
Committee is uniquely situated to be able to make real progress
by coming together in a bipartisan fashion around a targeted
set of top priorities for both Democrats and Republicans.
We had a constructive hearing on overall energy permitting
reform way back in May, and today we are going to drill deeper
on some of our Committee members' top priorities based on the
various permitting bills that have been referred to us. This
includes responsibly addressing issues that are slowing down or
blocking energy infrastructure critical for energy security and
reliability, like pipelines and transmission lines. That
discussion will be coupled with one on leasing and permitting
of all types of energy on federal land and in federal waters,
which is a tremendous energy resource and a critical piece of
our jurisdiction.
Let me begin with transmission. Over the last year, there
has been an attempt to paint transmission permitting reform as
just another subsidy for intermittent renewable energy. If that
were the case, that would be very hard for a lot of us to
support, but this is simply not true. And we should not
politicize infrastructure that has long enjoyed bipartisan
support. Here are the facts as I see them. Number one--big,
interstate transmission lines just are not getting built. In
2021, we had the lowest build-out of extra high voltage
transmission construction in the last decade. Number two--the
process of siting, paying for, and planning large, interstate,
and interregional transmission is different from other types of
infrastructure and requires unique fixes. Number three--
transmission is a key electric reliability tool, particularly
during weather events that span hundreds of miles. Long-
distance transmission and interconnectivity enables power to
move to where it's needed. As we have seen in Texas and other
parts of the country, the areas that need the power aren't just
blue states with aggressive climate targets that some of us may
not agree with. Of course, transmission infrastructure alone
isn't enough for reliability--we also need dispatchable
generation like coal, natural gas, hydropower, and nuclear. But
without transmission, that generation has nowhere to go and it
cannot help the areas that need it.
Let me be clear, states are currently in the driver's seat
on transmission projects. And I believe, in most cases, that is
where decisions should be made. But in the limited instances
where there is a project that is in the national interest and
it gets stuck at the state level, we need an efficient federal
backstop to provide a pathway for the project to get the
permits and be fairly paid for based on benefits received. The
solution set for other types of energy projects looks different
than transmission. One critical element which was not included
in the debt deal that would benefit all types of energy
projects--from pipelines to offshore wind, to mining projects--
are judicial reforms. In my home State of West Virginia, just
one project--the Mountain Valley Pipeline--has faced dozens of
lawsuits in the five-plus years since they received all the
necessary federal permits. While the debt deal shrunk NEPA
review timelines down to no more than two years, as we all
know, litigation on the back end can add many more years to the
permitting process after agencies have completed their work.
There are three stages in the litigation process that we
should look at streamlining--the filing, the case, and the
remedy. On the first issue, right now, in many cases, parties
can file suit and begin litigation up to six years--I repeat--
up to six years after a permit has been issued. Allowing three
times as long to challenge a NEPA review as we are allowing for
agencies to issue one makes no sense at all. The second issue
is the length of the court case itself. Given how behind we are
building the energy infrastructure this country needs for our
security, Congress should direct the course to expedite
proceedings for these projects. Third is what happens if a
court sends a permit back to an agency for more work. Usually,
when a court sends a permit back, it identifies a few specific
issues that must be fixed, yet we have agencies taking almost
as long on these fixes as it took them to write the whole
permit from scratch. All of these parts of the judicial process
can and should be structured so that everyone gets their day in
court, but project developers of all kinds have more certainty.
Our second panel today will discuss how we can bring some
timelines, certainty, and efficiency to building and producing
on federal lands and waters. We need to be clear about what we
mean by permitting here because the conversation tends to blur
two distinct steps. Whether it's an oil and gas well in New
Mexico, a solar project in Arizona, geothermal in Nevada,
offshore wind off the California coast, or an oil and gas
platform in the Gulf of Mexico, the first step is to navigate
the Department of the Interior's leasing and right-of-way
process. Then there is the separate process of getting permits
to build or drill on that particular lease. Both steps have
environmental reviews and approval processes, each with
litigation risk. Energy producers on federal lands and waters,
like those on private or state lands, want legal certainty
about their leases, a steady flow of future sales to justify
long-term investments, and infrastructure and skilled
workforces. Continued production of these federal resources is
incredibly beneficial, not just to our energy security, but
also to fund western state priorities like education, and
national priorities like the Land and Water Conservation Fund.
I have been concerned about efforts by the Administration
to throttle back oil and gas leasing and production, so I made
sure that the Inflation Reduction Act tied the ability to issue
wind and solar leases to whether or not Interior is holding
significant oil and gas lease sales, both on and offshore. And
because that is now the law, the unprecedented delay in
finalizing the next five-year offshore oil and gas plan is now
putting both offshore wind and offshore oil and gas at risk.
On top of that, just last week, the Administration and
environmental groups released a voluntary settlement
agreement--negotiated behind closed doors--that would take 11
million acres in the Gulf off the table from leasing and impose
restrictions that only apply to oil and gas leaseholders. If
the settlement agreement goes through, you will have oil and
gas vessels barred from operating at night or restricted to
slow speeds, while commercial shipping, passenger vessels, and
fishermen would be completely unaffected. I don't know if there
is a better example of this Administration's targeting of
American energy production than this--a domestic energy
provider literally held back while a tanker ship importing
foreign crude can cruise on by unrestricted.
Onshore, while they still have work to do, I am glad to see
that the IRA has pushed BLM to finally resume holding lease
sales, including New Mexico's record-setting sale back in May.
But as I said, once you have a lease, you have then got to
permit the project itself. I am interested to hear from our
witnesses how Interior's permitting process affects each of
their industries. I imagine there are a lot of common
challenges, regardless of the energy type. As the superpower of
the world, with abundant natural resources, a strong workforce,
and the ability to produce cleaner than anyone else, there is
no reason for us not to have a robust energy production program
on our federal lands and waters. As the Chairman of this
Committee, I am committed to continuing to convene my
colleagues for open dialogue and negotiations on how to make
more progress on permitting this year.
Let me end with some housekeeping, since we have two panels
today with two separate topics. For the first hour and a half,
we will have the opening statements and then ask questions of
our first panel of witnesses on transmission lines and
pipelines. Then, we will hear the opening statements and ask
questions of our second panel on energy projects on federal
lands and waters.
With that, I am going to turn to my friend, Senator
Barrasso, for his opening statement.
OPENING STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM WYOMING
Senator Barrasso. Well, thanks so much, Mr. Chairman. Thank
you for holding today's hearing, and I am so grateful that we
continue to pursue meaningful, bipartisan permitting reform in
this Committee.
Last month, Congress passed legislation to address spending
and the debt ceiling. That legislation included important steps
to expedite the review process under NEPA, the National
Environmental Policy Act. It also authorized the Mountain
Valley Pipeline. While the legislation was helpful, Congress's
work is far from over. Congress still needs to fix the broken
leasing and permitting process for oil, natural gas, and coal
production on federal land, and we need to ensure that the
Mountain Valley Pipeline is not the last major interstate
natural gas pipeline ever to be built in America. Under federal
law, the Secretary of the Interior is required--required by
law--to hold quarterly lease sales in each state with federal
oil and gas resources. Since President Biden took office, the
Secretary of the Interior has held only two lease sales in
these states. That is two lease sales in ten quarters. That
means, when it comes to leasing, the Secretary of Interior is
violating the law 80 percent of the time. It is a complete
disgrace.
Oil and gas production on federal lands employs tens of
thousands of people in Wyoming and throughout the West. In
Wyoming, it pays for K-12 public education and other essential
services. It is central to the economics and the economies of
rural communities. By failing to hold robust lease sales each
quarter, Secretary Haaland is setting our states up for failure
in the future. That includes her home State of New Mexico,
which is among the poorest states in the nation. The
Secretary's decision is having a similar impact on coastal
communities. Under current law, Secretary Haaland was required
to finalize a five-year offshore oil and gas leasing plan by
June 30, 2022. We are now beyond that date of 2023. Instead,
she issued a draft plan which included the option of ending all
offshore oil and gas leasing altogether. Since then, this
Secretary has dragged her feet on taking further actions. That
almost certainly means that 2024 will be the first year without
any offshore oil and gas lease sales in the United States since
the mid-1960s.
I do not support President Biden's radical and economically
disastrous efforts to electrify everything almost immediately.
One thing that is necessary is expanding transmission lines to
improve the reliability of the electric grid. Such expansions
will not happen without permitting. As I have told Chairman
Manchin, I am willing to discuss changes to laws addressing
interstate electric transmission lines. We must follow two
principles. First, any changes to laws governing transmission
must actually address electric reliability. The biggest threat
to reliability is not the lack of transmission lines, it is the
premature retirement of coal, natural gas, and nuclear power
plants. That is what we heard in this Committee at that table
from experts, including NERC--the North American Electric
Reliability Corporation, and FERC--the Federal Energy
Regulatory Commission.
Second, any changes to laws governing transmission cannot
be just another subsidy. Congress should not try to force
electric customers in rural inland states, such as Wyoming and
West Virginia, to subsidize ill-conceived policies of coastal
states, such as California and New Jersey. If California, New
Jersey, and New York want to rely on offshore wind, then their
customers should pay for it. I suggest that we pursue
permitting changes that actually put steel in the ground. We
should pursue changes in law that will benefit all energy
sources and projects, not just those favored by President
Biden. And we should pursue changes that help ensure these
projects are not defeated in the courts.
Mr. Chairman, I look forward to continuing to work with you
and other members of this Committee on permitting reform.
Together, we can improve our nation's economy, restore American
energy dominance, and reduce the high cost of energy for
American families. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Barrasso.
And I would like to welcome our first panel of witnesses to
the Committee and thank you all again for coming today.
First, we are going to have Mr. Jason Stanek. Jason is
former Chairman of the Maryland Public Service Commission.
Then, we are going to have Mr. Antonio Smyth, Executive
Vice President, Grid Solutions and Government Affairs for AEP,
American Electric Power.
And then third, we are going to have Mr. Chad Teply, Senior
Vice President, Transmission and Gulf of Mexico with Williams.
So we will start with you, Mr. Stanek.
STATEMENT OF JASON M. STANEK, FORMER CHAIRMAN, MARYLAND PUBLIC
SERVICE COMMISSION
Mr. Stanek. Thank you.
Good morning, Mr. Chairman, Mr. Ranking Member, and members
of the Committee. As the Chairman just noted, I am the recently
departed Chairman of the Maryland Public Service Commission. I
appreciate the opportunity to testify today on an issue of
critical importance. As both a former federal and state utility
regulator, I offer you the perspective of one who has seen how
the current permitting process impacts and then oftentimes
challenges the development of needed energy infrastructure in
this country.
As our regional power grids face record demands, as our
reliability incidents increase--seemingly weekly--and as our
aging infrastructure nears the end of its useful life,
attention to permitting reform can no longer wait. Whether it
is developing offshore wind turbines or building new
interregional transmission lines, the glacial pace of our
approvals process is threatening the nation's ability to
deliver reliable and affordable energy supplies to our
citizens. Of course, when it comes to the permitting of large,
major infrastructure projects, the federal and state
governments have overlapping responsibilities. For its part,
the state siting authorities have a responsibility to use best
efforts to conduct a thorough review and to make a final
determination within a reasonable time frame. Project
developers, likewise, deserve to know that their applications
and proposals will be processed efficiently and without delay.
Fortunately, state regulators have tremendous experience with
reviewing energy projects and should be viewed as partners when
evaluating the need for and siting of energy infrastructure.
In turn, it is equally important that federal authorities
respect the state's jurisdiction and to provide deference to
allow the state process to run its course, including electing
not to exercise backstop authority or otherwise preempt the
state from completing a review that is underway and moving
toward a final determination. As I noted in my written
testimony, if our reforms are to be successful, meaningful
consultation and mutual respect between the state and federal
regulators will best reflect the spirit of cooperative
federalism. I think it will also be essential for permitting
reforms to include clear language to include the roles of both
the federal and the state regulator when reviewing proposals to
site projects of national interest.
Beyond streamlining the federal permitting processes, there
are other issues that are either slowing or inhibiting the
development of energy infrastructure--namely, how we plan for
new electric transmission lines and how we decide who will pay
for them. As the former co-chair of the Joint Federal-State
Task Force on Electric Transmission, I can testify that the
need to modernize the way in which we conduct transmission
planning ranks very high. Going forward, we will need to employ
planning practices that can better project future load growth,
that could incorporate state policies from the outset, and
anticipate severe and increasingly unexpected weather events
and threats to the power system, both cyber and physical.
Improving this framework within planning regions and requiring
closer coordination between neighboring regions will result in
the most efficient development of new transmission lines at the
lowest overall cost.
Equally important is answering the question of who is going
to pay for these new projects. Determining which customers or
which states should pay for a particular project has been a
challenging exercise for many years. While cost-benefit reviews
have historically focused on production cost savings, we now
have experience in evaluating a range of other benefits, both
broad and narrow, both quantifiable and harder to quantify. But
by spreading those costs to a broader class of identified
beneficiaries in a fair and equitable manner, I believe we can
remove a formidable barrier to the development of needed
transmission lines. I should also note that FERC has several
rulemakings currently underway on all these issues and state
regulators have participated at every stage of these
proceedings.
Ultimately, the bottom line is that the current regulatory
environment facing energy infrastructure developers is
challenging under the best of circumstances. With increasing
demands on our energy delivery networks, permitting reform is
the first step to ensure that our nation can make timely
investments to access reliable, affordable, and abundant energy
supplies. I emphasize timely because I believe we are running
out of time based on current projections and trends.
Ultimately, having Congress establish protocols that will
facilitate state regulators and their federal counterparts to
work cooperatively, while respecting each other's jurisdiction,
will result in an efficient permitting process that will get
projects built more quickly, while strengthening this nation's
independence and energy security.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Stanek follows:]
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The Chairman. Thank you, sir.
Now, Mr. Smyth.
STATEMENT OF ANTONIO P. SMYTH, EXECUTIVE VICE PRESIDENT, GRID
SOLUTIONS AND GOVERNMENT AFFAIRS, AMERICAN ELECTRIC POWER
Mr. Smyth. Good morning, Chairman Manchin, Ranking Member
Barrasso, and members of this honorable Committee. Thank you
for the invitation to testify at today's hearing. My name is
Antonio Smyth. I serve as Executive Vice President of Grid
Solutions and Government Affairs at American Electric Power,
which is one of the largest electric utilities in the United
States. We serve 5.6 million customers across an 11-State
footprint, and we develop, own, operate, and maintain the
largest electric transmission system in North America.
First, I want to thank you for your work to streamline and
make our country's siting and permitting processes more
efficient. We are grateful for your efforts. As you know, our
nation's electric system is in the midst of a fundamental
transformation, driven by an aging grid as well as changes in
both the consumption and the production of energy. The
confluence of these changes means far greater complexity for
grid operators and planners as we seek to make long-term
investments that balance system reliability with customer
affordability and environmental sustainability. Maintaining a
reliable electric grid is critical to the health and welfare of
our customers, and affordable electric power is vital for
economic growth and to uphold our nation's competitive
advantage.
AEP is experiencing significant increases in demand in
different parts of our service territory, due in part to the
location and performance of our transmission system. For
example, we have agreements in place to interconnect customers
in Central Ohio that would double the demand we currently serve
with additional demand beyond this currently under study. When
we connect the pending demand, Columbus, Ohio will surpass New
York City in electricity consumption. In the race to capitalize
on technological transformation, industrial customers cannot
wait for us to modernize our energy policies, and more forward-
looking policies will allow us to make grid investments that
will deliver value to all customers in the future.
Today, it can take ten or more years to plan, permit, and
build transmission projects, and sound transmission investment
requires three key elements. We call them the three P's--
planning, paying, and permitting. We identify three priorities
for Congressional action in these categories. First, Congress
should encourage the Federal Energy Regulatory Commission to
reform both regional and interregional transmission planning
processes to (a) incorporate longer-term planning time
horizons, (b) include more modern and expansive planning
scenarios, and (c) incorporate a wider range of benefits over
longer time frames to better reflect the true value of
transmission investments to customers.
Second, Congress should encourage FERC to ensure that the
allocation of costs of transmission investments are
commensurate with the distribution of benefits and that all
appropriate benefits are carefully considered. Benefit metrics
used for both regional and interregional projects need to be
expanded to encompass all appropriate reliability, resilience,
and economic benefits of the grid. In addition, benefits need
to be measured over the useful life of assets, as opposed to
the far shorter time periods used today.
And third, Congress should streamline the process for using
federal backstop siting authority under the Federal Power Act
by eliminating the requirement to utilize national interest
corridors designated by the Department of Energy for
transmission projects that provide significant regional or
interregional reliability benefits. States play a lead role in
the siting of transmission facilities, and we believe that they
should continue to do so. However, it is important for federal
law to provide a workable backstop siting process for projects
that deliver important grid reliability benefits in the rare
instances where this may be needed. AEP has primarily focused
our transmission siting and permitting efforts on partnering
with our states to obtain necessary permits. For most of the
transmission projects we have built, permitting has not been a
challenge that could not be overcome, but it can be time
consuming and litigious. For example, we were recently denied
state authorization in Pennsylvania for an important congestion
relief project that was approved by both the grid planner--PJM,
in this instance--and the State of Maryland. The project is
currently in litigation.
In summary, more robust planning processes with better
articulation of benefits, especially for multi-value
transmission investments, could lead to better outcomes in the
siting and permitting processes. If we proactively address
these challenges with appropriate and targeted reforms, it will
help us achieve a coordinated and reliable energy transition
that benefits customers and advances our economy. We remain
deeply committed to supporting this Committee's efforts in this
regard and encourage you all to continue this important work.
Thank you, and I look forward to your questions.
[The prepared statement of Mr. Smyth follows:]
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The Chairman. Thank you.
Mr. Teply.
STATEMENT OF CHAD A. TEPLY, SENIOR VICE PRESIDENT, TRANSMISSION
AND GULF OF MEXICO, THE WILLIAMS COMPANIES
Mr. Teply. Thank you, Chairman Manchin, Ranking Member
Barrasso, and distinguished members of this esteemed Committee.
Thank you for the opportunity to provide my testimony before
you today. My name is Chad Teply and I work for the Williams
Companies as a Senior Vice President responsible for overseeing
our interstate natural gas transmission pipelines and our
operations in the Gulf of Mexico. Williams builds and operates
interstate pipelines and the associated infrastructure
throughout the country, including many of the states that are
represented here today. On any given day, we handle
approximately one-third of all natural gas delivered in the
United States. Today, I am here to emphasize the pressing need
for targeted and pragmatic permitting reforms for interstate
natural gas pipelines.
I would like to highlight the following three reasons that
pipeline infrastructure is critically important: First,
interstate pipeline infrastructure delivers our nation's
abundant natural gas supplies to millions of households across
the country, providing an affordable and reliable source of
energy. Second, pipeline infrastructure ensures energy security
and emissions reductions abroad. With reforms, we can export
more liquefied natural gas to our European allies to reduce
their dependence on imports from Russia, and to Asian
countries, to reduce their dependence on higher-emitting forms
of energy. Third, pipeline infrastructure is necessary for our
transition to a lower carbon economy here at home. As our power
sector adds increasing amounts of intermittent energy
resources, it needs dispatchable natural gas-fired power to
ensure grid reliability and affordability. In addition,
increased use of both hydrogen and carbon capture and
sequestration in our lower carbon economy will not be possible
without the development and construction of new interstate
pipelines to transport hydrogen to facilities and carbon
dioxide to storage and utilization facilities where it is
needed.
Currently, companies like Williams can construct an
interstate, multistate pipeline in just six to nine months.
However, the permitting for that set of pipelines and
infrastructure takes approximately four years, and in some
cases, can be halted completely. The flowchart attached to my
written testimony illustrates the very extensive permitting
review process and the requirements to construct an interstate
natural gas pipeline. When Congress enacted the Natural Gas Act
of 1938, it determined that when an interstate natural gas
pipeline is deemed to be in the public interest, the permitting
and review should be done at the federal level. Congress
largely preempted state permitting over such projects, in part
to ensure that one state could not block a pipeline project
crossing its jurisdiction when that pipeline can serve and
benefit a neighboring state.
Several decades later, Congress enacted the Clean Water
Act, which had the sweeping goal of eliminating pollution in
our nation's waterways. One component of the Clean Water Act is
the Section 401 certification process, which requires the
developer of any project obtaining federal authorizations, such
as an interstate natural gas pipeline, to obtain certification
from a state that the proposed project will not violate water
quality standards. For most states, this 401 certification
process prompts a useful discussion between the project
developer and the state about ways to site or design the
project to mitigate or avoid water quality impacts. However,
some states wield Section 401 as a one-state veto. For those
states, there is no real discussion to be had about the design
of the project or the siting. They are simply bent on rejecting
it. This outcome is entirely inconsistent with Congressional
intent and it has real consequences for energy affordability,
reliability, and security, as well as for environmental
protection.
Fortunately, the SPUR Act, introduced by Ranking Member
Barrasso, offers a solution. Section 3004 of the SPUR Act makes
narrow but important reforms to restore state/federal balance.
First, it directs any state that has water quality concerns
about a proposed interstate natural gas pipeline to bring those
concerns into the National Environmental Policy Act (NEPA)
environmental review process. Second, having established that
NEPA is the proper forum for the environmental impact reviews,
Section 3004 removes such projects from the coverage of the
Clean Water Act Section 401 certification process. Importantly,
Section 3004 does not remove the interstate pipelines from the
purview of the Clean Water Act, nor does it impact other types
of projects covered under Section 401, just interstate natural
gas pipelines.
Section 3004 of the SPUR Act solves the one-state veto
problem for interstate pipelines while still preserving
critical environmental protections for all states and
communities under both NEPA and the Clean Water Act. This is a
common-sense reform we need. The SPUR Act also proposes
unlocking some of the most abundant supplies of natural gas we
have in federally controlled onshore and offshore regions,
making it possible for gas to contribute to our energy
affordability and climate mitigation as well. Williams
appreciates the efforts of this Committee to apply its
expertise in this area and we stand ready to be a resource for
your work.
Senators, thank you again for the opportunity to present
here before you and I thank you for your time.
[The prepared statement of Mr. Teply follows:]
GRAPHIC(S) NOT AVAILABLE IN TIFF FORMA
The Chairman. Let me thank all of you for being here today
and sharing with us your challenges and your knowledge and some
advice, maybe, in how we should go forward.
Let me start our questioning now.
We know the litigation process can create potentially
endless delays of all types. You have been speaking about
that--pipelines, transmission lines, and everything in between.
Once a project has gone through years of federal agency
reviews, Congress never intended there to be a review process
in the courts that can take as long or longer than the overview
of the project, whether this has merits or not. So I want to
quickly ask each of you, and we will go through this very
quickly, if you will, about the litigation reforms that we
proposed, okay?
Would it be helpful to limit the amount of time parties
have to bring a case? Yes, no, whatever.
Mr. Stanek. Yes, I think it's necessary, yes.
The Chairman. To bring a case, okay, so we know that we can
bring that.
Would it be helpful to direct courts to set energy project
litigation for expedited review?
Mr. Teply. Yes.
Mr. Smyth. Yes.
Mr. Stanek. It is necessary.
The Chairman. Okay.
Would it be helpful to set hard timelines on how long
agencies can take to fix permit issues identified by the
courts?
Mr. Teply. Yes.
Mr. Smyth. Yes.
Mr. Stanek. Most definitely.
The Chairman. Now, I want to go to this chart up here. Let
me show you what we are dealing with in America.
[The chart referred to follows:]
GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
The Chairman. Usually it's nine years--normally nine years
right now if you go through this process, and the bills that we
have been talking about and think that we should be passing
would take us down to four years--cut it in half. It would be
great for transmission. It would be great for all types of
energy because you have got to move electrons, okay? People say
they want transmission, but no pipelines. Some people say they
want pipelines, but no transmission. We need everything. And
this would give us a process of how we would do it more quickly
and expedite things.
So do you think we should consolidate a federal backstop
siting process so there is a single environmental and national
interest review at FERC?
Mr. Stanek. Yes.
Mr. Smyth. Yes, we do.
The Chairman. And any comments on that would be welcome, if
you have on that how some of your personal experiences--what
you have run into and how we can cut this down.
Mr. Stanek. I would say that currently, the process would
entail two EIS reviews, two NEPA reviews, for conceivably the
same project, and that is the understanding that the courts
have explained out in the Ninth Circuit. Consolidating the
process into one EIS, one NEPA review, just makes a lot of
sense, saves a lot of time, and there is no redundant use of
resources.
The Chairman. Let me go through one more chart here that I
have, and I want to show you--this chart here shows a portion
of the transmission reform proposal that I put up, which
specifies the benefits of transmission that FERC can require
users to pay for.
[The chart referred to follows:]
[GRAPHIC] [TIFF OMITTED] T5570.033
The Chairman. The goal was to include quantifiable electric
system benefits that previously were accepted by FERC and
supported by courts. The biggest thing, basically, is, who
pays? So if you are coming through the State of West Virginia,
we are a net exporter of power. We don't need any more power
coming in, making us pay for reliability. You just need, maybe,
to go through our state.
So here, basically, if you can see this, it shows you what
the bill does. Before there can be any cost allocations
whatsoever, you have to show that it has improved reliability--
so if you didn't have a reliable system. You have to have
reduced congestion, reduced power losses, greater carrying
capacity, reduced operating reserve, and it requires an
improved access to generation. Some states might not need any
of this, but it has to have a pathway forward. Also, what we
allowed in our bill is to have every state with a PSC, even if
FERC requires it to be a national concern, or of national
interest, to go one year to work with the PSC and the local
provider, such as AEP. You would make a determination. Do you
want that or not? Do you want to be part of it or just
basically say no? But you have one year to work with your PSC
to make sure that you're not burdening your customers or
burdening your company and your bottom line, if you will, to
make a decision--is that good for our business? Is it good for
our customers, or not?
We think that was a reasonable approach and we are trying
to get that so that the cost allocation does not become a
cumbersome thing to where everyone says, well, it has to be
states' rights. You can't do this and that. John doesn't need--
Senator Barrasso doesn't need--he is a big powerful state with
a lot of power. He is like my state. We produce a lot of power,
but you might need our pathway through. So we are looking at
some of that. So any comments you have on that, very quickly,
of how that would work.
Mr. Stanek. I would quickly say that that list of
highlighted language reflects quantifiable benefits that are
used by PJM and others. So that is a generally accepted list of
benefits that we could put a price tag on with relative ease.
The Chairman. Anybody else on that?
Mr. Smyth. Yes, I mean, we are proponents of including all
reasonable reliability and economic benefits when it comes to
the allocation of cost. I think you have captured many of them
there in your language today.
The Chairman. Mr. Teply, of all that, same as transmission
for gas lines and pipelines too, right?
Mr. Teply. The timeliness of reviews and the timeliness
uncertainty----
The Chairman. Your biggest obstacle right now, I mean, I
know with MVP.
Mr. Teply. Yes.
The Chairman. How that can--it's just unbelievable.
Mr. Teply. Very much so correlated.
The Chairman. So what is your biggest obstacle you have
right now in any type of pipelines? What would you say is your
biggest obstacle?
Mr. Teply. Our biggest obstacle is permitting certainty and
then the subsequent judicial reviews.
The Chairman. Got you.
Senator Barrasso.
Senator Barrasso. Well, thanks so much, Mr. Chairman.
Mr. Teply, just following, Williams transports natural gas
produced in Wyoming all across the United States. So how
important is it to your company and to you and to our nation to
have a reliable source of production from federal lands in
Wyoming?
Mr. Teply. It is extremely important. Our operations in
Wyoming, in particular, are in the Wyoming checkerboard that
you are very familiar with. You know, efficient development of
that resource drives--not only from a timeliness perspective,
to certainty around project development, but ultimately also
costs in the marketplace. Certainty around efficiencies in
development in the federal land is extremely important.
Senator Barrasso. So it seems to me that a few states have
abused federal statutes to block the construction of new
pipelines. The State of New York blocked the Constitution
Pipeline and the Northeast Supply Enhancement Project. Both of
these pipelines would have brought much-needed natural gas to
New England. It seems every year we hear about how expensive
natural gas is in New England. We have Senators on this
Committee from those areas. New York blocked these pipelines,
even though FERC, the Federal Energy Regulatory Commission,
found that both projects were actually in the national
interest.
Can you expand on how New York abused its authorities under
the Clean Water Act to halt these important projects that would
be so helpful in bringing affordable energy to so much of our
country?
Mr. Teply. Thank you, Senator.
The experiences we had in our Constitution Pipeline and our
NESE Pipeline in particular were varied. With respect to the
Clean Water Act permitting processes, the issues ranged from
administrative requirements for completeness of application to
short-term construction-type impacts that would not have
carried through to the broader project's lifetime. The impacts,
they are obviously from a constituency perspective. Disallowing
those projects requires that the New England states that would
have been served by these pipelines ultimately continue to burn
heating oil. They are not only more expensive, but also have
higher polluting characteristics than other sources of energy.
Senator Barrasso. So worse for the environment because they
blocked these things and higher costs for consumers. It seems
like----
Mr. Teply. That is correct.
Senator Barrasso [continuing]. A lose-lose.
So what impact did this decision have specifically on, say,
natural gas prices and stability of the grid in New England?
Mr. Teply. I think from a stability perspective, the issues
that you see in New England--obviously, a lot of that energy
served from LNG. Because of the lack of pipeline infrastructure
in that area, causing significant concerns with respect to both
reliability and cost on an annual basis as we, in particular,
are heading into the heating seasons for that area.
Senator Barrasso. I mean, sometimes you hear natural gas
prices in New England at $18 versus Pennsylvania at $3, and
they are not that far apart.
Mr. Teply. That is correct.
Senator Barrasso. Now, Mr. Smyth, the Committee has
recently heard testimony about the increasing risks to electric
reliability in the United States. From that table, we have
heard from FERC, the Federal Energy Regulatory Commission, and
also the North American Electric Reliability Corporation. They
agree that the country is potentially running into a
reliability crisis. They also agree that the principal reason
for the problem is the premature retirement of coal, natural
gas, and nuclear power plants before there are replacement
energies available.
Do you agree that the primary problem right now is the
premature retirements, and not lack of transmission?
Mr. Smyth. Yes, you know, I think as you look at the NERC
data, that is what it will clearly tell you. Transmission does
play an important part in this, and we would like to see more
transmission developed. We think that can be, you know, very
constructive insofar as, you know, solving some of these future
potential reliability issues going forward.
Senator Barrasso. So FERC has specific authority to site,
Mr. Smyth, the interstate electric transmission lines within
the national interest corridor. Corridors are established by
the Department of Energy. Do you believe Congress can improve
the Department of Energy's process for establishing a national
interest corridor?
Mr. Smyth. Yes. Yes, we do. In particular, for projects
that provide significant reliability benefits, you know, we
think that process can be streamlined to one set of processes
without reducing the quality of the environmental reviews.
Senator Barrasso. So should Congress ensure that states and
regions and other experts have more of a say in establishing
the corridors?
Mr. Smyth. Yes.
Senator Barrasso. Okay. So would improving opportunities
for state input in streamlining the process remove some of
these barriers that we talked about?
Mr. Smyth. We believe so.
Senator Barrasso. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
And now we are going to have Senator Hirono.
Senator Hirono. Thank you, Mr. Chairman.
This hearing is happening when millions of people in this
country, as well as around the world, are suffering through
record-breaking heat, following on the hottest June ever
recorded. And literally, when you see people being injured just
by stepping on sidewalks, et cetera, you see the enormity of
the concerns. So we are on a path towards even more intense
heat, wildfires, and extreme weather unless we reduce our
greenhouse gas emissions by shifting to solar power and other
lower-cost, zero-carbon sources. Democrats in Congress passed
the Inflation Reduction Act to help speed the transition to
clean energy, and we need to build new clean sources of energy
in a fair manner and at a pace that reflects the severity of
the global warming we are facing. So I thank you, Mr. Chairman,
for holding this hearing.
For Mr. Teply, your testimony states your company ``is a
strong believer in NEPA and the environmental impact statement
process. We use the EIS process to engage with affected
communities and understand their needs. And in our experience,
the EIS process helps us identify modifications we can make to
pipeline projects that will avoid or mitigate adverse impacts
on the environment.'' My question to you--do you think Congress
should consider federal grants to state, tribal, and local
agencies and to community-based organizations to increase their
capacity for completing state, tribal, and local environmental
reviews?
Mr. Teply. Thank you, Senator, for the question.
At Williams, we are very focused on stakeholder engagement
throughout our project development processes, including
engaging our environmental justice community, our tribes in
areas that we operate in and have infrastructure that affects
those folks. We spend a lot of time through the early project
development engaging, identifying potential workarounds,
including re-siting where important or where possible and
practical. So we do think that the engagement at the
stakeholder level is extremely important, and we think that we
are doing a good job of ensuring----
Senator Hirono. Well, actually, the question was whether
you think that these stakeholders should increase their
capacity to engage in the process, because these are
complicated issues. And in fact, Senator Carper proposed such a
grant program to enable these stakeholders to better engage in
the process. I think that that is probably a good idea.
Mr. Teply. Yes, I think, as an example, we have engaged
with the FERC Office of Public Participation, which is very
similar to what you are describing, very early on, as that
department was stood up with a keen interest in having a seat
at the table with them as that process plays through FERC.
Senator Hirono. And providing some funding for them could
maybe even shorten the entire process of review.
For Mr. Smyth, in Hawaii, we have smaller capacity
transmission lines compared to your company's lines. How much
benefit to the capacity and reliability of the grid can come
from upgrading the lines and existing transmission pathways?
Mr. Smyth. Yes, thank you for your question.
I think that, you know, you can see benefits when you up-
size transmission lines, but you want to right-size
transmission lines as well. So it really depends upon the use
case, but generally speaking, as demand increases, and supply
changes, up-sizing the capacity of transmission lines can drive
good outcomes for customers.
Senator Hirono. And then, to change the transmission lines,
we are talking about a pretty expensive proposition. So do
electric companies, utility companies, have the right
incentives to invest in upgrading existing lines compared to
building new lines?
Mr. Smyth. Yes, we believe they do.
Senator Hirono. You think that they currently have those
kinds of incentives?
Mr. Smyth. Yes, I do believe the incentives are there. I do
believe that we need to modify the planning processes. We need
to modify cost allocation. We need to do things that make it
easier to move through the processes.
Senator Hirono. So speaking of cost allocations, can you
elaborate on how you think regulators should measure and
determine the public benefit of new transmission lines and how
that going to new transmission lines expenditure should be
allocated to the ratepayers as opposed to the utilities?
Mr. Smyth. Yes, you know, we believe that beneficiaries and
payers should be aligned. We think that benefits should be
calculated in a broad manner that includes all reasonable
reliability and economic benefits and the cost should be
distributed accordingly.
Senator Hirono. That may be easier said than done, because
Hawaii, for example, I think still pays the highest rates in
the country for electricity. So anytime there is a potential
for increasing those costs, there are going to be concerns
raised.
Mr. Smyth. Sure.
Senator Hirono. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator.
Senator Lee.
Senator Lee. Thank you. I am going to pass for now. Thank
you.
The Chairman. Okay.
Senator Hyde-Smith.
Senator Hyde-Smith. Thank you, Mr. Chairman and thank you
to the witnesses for being willing to be here and serve in this
capacity. It is truly appreciated and I know it's not always
easy.
But currently, the permitting process that we are all so
concerned about is centered around the cumbersome bureaucratic
process that delays and hinders so many energy products, as we
are well aware, especially in Mississippi, in my Gulf State.
The lengthy and unpredictable permitting procedures have led to
increased project costs, which discourages investment, as we
well know, and hampers the path to regain energy independence.
In addressing these permitting reform issues, we will be
crucially looking into unlocking the country's potential for
sustainable growth and prosperity in domestic energy
production. That is my goal, at least.
Mr. Teply, this question is for you. Just a simple yes or
no and any comments that you want to make. Do you agree that
cutting red tape and enforcing strict timelines for permitting
energy projects will help ensure electric reliability for local
power companies in my State of Mississippi and across the
country?
Mr. Teply. Yes, and I will correlate that to the natural
gas infrastructure that we would build to support those power
projects. Ultimately, our goal there being certainty of
outcome, understanding that the requirements of our permitting
and review processes are thorough and we are willing to work in
that environment, but the certainty of timing is critically
important to getting these projects done and maintaining your
investors' interest in such projects.
Senator Hyde-Smith. And do you agree that a streamlined
permitting process would provide more certainty for utilities
and would therefore benefit customers and economic development
as well as increase the safety and reliability of the natural
gas industry?
Mr. Teply. Yes, absolutely. And the streamlined permitting
process, with respect to customer impacts, drives directly to
cost. For projects that are stalled, delayed, and ultimately
canceled, there is still a cost to that development activity.
Over time, customers can bear that cost, whether that be from
affordability, also reliability, and potentially safety.
Senator Hyde-Smith. And natural gas and LNGs have emerged
as critical energy resources that the United States can produce
domestically on a large scale. Mr. Teply, how abundant is our
domestic supply of natural gas?
Mr. Teply. Yes, we definitely--thank you for the question.
We definitely don't have a supply concern with respect to
natural gas in the United States. What we have is an
infrastructure problem--getting infrastructure built to tap
into the abundant resources across our country to serve not
only domestic loads affordably and reasonably and cost
effectively, but also the potential to serve international
loads, like I had mentioned earlier.
Senator Hyde-Smith. A good position.
Mr. Teply. Yes, a very good position.
Senator Hyde-Smith. In light of the Administration's goals
to decrease greenhouse gas emissions, do you consider the
Administration a willing partner in permitting and developing
the pipeline infrastructure necessary for maximizing production
of our domestic natural gas supplies?
Mr. Teply. Thank you for the question.
I think right now we have challenges to production and
infrastructure development across the country. Whether I would
deem that a willing partner, that would be hard to say right
now, but I would say with the permitting reforms that we are
talking about, ultimately, those types of steps, taken by this
body and others, can continue to move our country forward, as
well as the globe forward. With respect to emission reductions,
it can be supported by natural gas infrastructure.
Senator Hyde-Smith. I want to transition to the importance
of investments for the natural gas industry in these pipelines.
What effects have the continuous delays due to the current
permitting process had on the investment opportunities?
Mr. Teply. Thank you for the question.
The continuous delays, ultimately, since 2016, if you look
at some of the major projects across the country, including the
two that I used as examples in my testimony, resulted in
cancellations. So ultimately, those are projects that were
intended to provide benefits to certain constituencies and
customer groups that were not delivered. So that increases the
risk around reliability and service, particularly in heating
seasons. It also impacts cost effectiveness of growth in those
areas. So there are a number of different types of impacts that
play through delays and cancellations of major infrastructure
projects.
Senator Hyde-Smith. Thank you very much. My time is up.
Thank you, Mr. Chairman.
The Chairman. Thank you.
And now, we will go to Senator Hickenlooper.
Senator Hickenlooper. Thank you, Mr. Chair.
Thank you all for your work and for being here today. Let
me start with Mr. Stanek. I want to commend you for leading a
diverse task force of ten state utility regulators from across
the country in public dialogues with the FERC Commissioners on
electric transmission over the last couple years. This concept
of minimum transfer requirements, which would require regions
to be able to move some share of their peak load with their
neighbors, proved a popular idea among state regulators from
Kansas to Arkansas, to your own Maryland. Can you speak to how
minimum transfer requirements could help address current
reliability shortfalls on the grid while maintaining autonomy
for states to chart their own energy futures?
Mr. Stanek. Thank you, Senator, and thank you for
recognizing the good work of the 15 members of the Federal-
State Task Force. We advanced the dialogue, for sure.
I had been on record as stating that having some minimum
transfer capacity between regions is important, and it is
important, not only for reliability and resilience, but it is
important for assisting neighbors during times of need. We have
seen the effects of Winter Storm Uri. We saw the effects more
recently of Winter Storm Elliot, when PJM desperately relied on
the assistance of one of our neighbors, New York ISO, to export
power. The fact is, there is no minimum standard currently, and
by including a minimum standard, we will ensure that, across
the country, regions will be able to either import or export
power to their neighbors.
With respect to the role of the states, it is important
that states have a say in the designation and selection of
these transmission lines, but at the end of the day, the states
also have exclusive jurisdiction over the siting of generation
and determining what resources they would like to connect to
those transmission lines. So I think it's an important issue. I
know that FERC is looking at it now, but I am glad that this
body is as well.
Senator Hickenlooper. Right. The nice thing is, I think
this--we talk a lot about making sure that our transition to a
new energy system is as inexpensive and as reliable as our
existing one--obviously, we want it to be cleaner. But I think
that reliability and the ability to deal with extreme weather
events and other intrusions into normal life, this notion of
having some minimum level of transferability is important.
Do you have a range of prices or a range of percentages of,
like what percentage would make sense in something like that?
Mr. Stanek. It would always be hard to determine a specific
number, and you want to ensure that a number is not so high
where you are going to be including additional costs and
expenses. I view it very much as an insurance policy. You hope
you don't need the transfer capacity from your neighbor, but in
a desperate time or dark hour, you need that. I would be hard
pressed--I am not a system engineer--to determine what a
specific number is, but I do believe there is wisdom in picking
a number as opposed to having a multi-year process at FERC to
determine what that number should be.
Senator Hickenlooper. Got you. I appreciate that.
Mr. Smyth, AEP is the largest transmission-owning utility
nationwide, so you know firsthand the challenges of getting
large projects completed. As a matter of fact, in the last
decade, all of North America has builders nearing completing
just seven gigawatts of large-scale, interregional lines--seven
gigawatts. In South America, over the same time period, it's
not seven, that number is 22 gigawatts. In Europe, it's 44
gigawatts. China recently built a single interregional
transmission line that carries 12 gigawatts in one line, almost
twice the figure for the entire North American continent. Do
you think we would benefit from a minimum transfer requirement
to jolt our system out of its current slumber, its lethargy? I
mean, what's your sense on that?
Mr. Smyth. Yes, thanks for your question. You know, and I
agree with what Jason said, I mean, when regions get in
trouble, they can borrow from each other and that can provide a
great deal of help when it comes to system reliability.
When it comes to a minimum bulk power, you know, transfer
capability thresholds, that is something that I think can be
very useful and supportive insofar as addressing reliability
between regions. We do believe, though, that customization of a
threshold is important just to really account for and make sure
that we are aligning benefits and costs appropriately.
Senator Hickenlooper. Got it. Well, I am out of time. Maybe
I will come back. And this notion of--I always want to ask what
is the cost of continuing to not build interregional projects,
what's that going to cost us down the road--but we will worry
about that later.
I yield back, Mr. Chair.
The Chairman. Thank you, Senator.
And now, we are going to go to Senator Cassidy.
Senator Cassidy. Thank you.
Mr. Stanek, I don't expect you to comment on pending
litigation, but I understand that the State of Pennsylvania is
blocking a transmission line that would go from Maryland
through Pennsylvania, despite being approved by everybody else.
So let's not--and I only use that to set up that it is real
life, but I am going to ask about the theoretical. The federal/
state management boards of which you speak and praise and say
we need more of--what additional teeth do they need in order to
avoid a theoretical situation where somebody may--or
Pennsylvania may--approve a project and want to ship it into
Maryland and Maryland says no?
Mr. Stanek. Well, the board that I spoke of does not have
any legal authority right now. It's a collaboration between the
federal and state authorities. But the example that you speak
to is a very important Transource transmission line where the
Maryland Public Service Commission found a genuine bona fide
need to bring power into Maryland and Washington, DC, the
nation's capital, because of reliability violations that PJM
has determined. Unfortunately, my colleagues north of the
border in Harrisburg decided that the line was not needed. That
is an example of an interstate line where states have come out
on two totally different sides of whether or not the line is
needed. And that is a situation where the Federal Government
may need to step in.
Senator Cassidy. So is that the solution? Because earlier,
my Chair, Senator Manchin, spoke of judicial review--kind of a
shot clock--you have got to finish, you can't go on forever.
Are you favoring a solution like that, that would have, okay,
circumscribed--we are going to complete the decision-making
process by this time--would you be in favor of that?
Mr. Stanek. I think a shot clock is important. Legal due
process for the state who is out of favor--it is important to
have their review reviewed by the court. But that should not go
on ad infinitum, for potentially years at a time. So I think a
statute of limitations is necessary.
Senator Cassidy. Sounds good.
Mr. Smyth, just for the record, I know AEP is attempting to
lower their carbon footprint. How much--whatever unit you wish
to express--has AEP lowered their carbon footprint by
converting coal-fired plants to natural gas?
Mr. Smyth. Yes, you know, we do have carbon reduction
goals, as you mentioned. And you know, what is of first and
foremost importance to us is balancing system reliability----
Senator Cassidy. Got to hurry because I have limited time.
Mr. Smyth. Sure, sure.
Senator Cassidy. So how much have you all lowered your
CO2 emission profile relative because of conversion
from one type of fuel to the other?
Mr. Smyth. I don't have a specific number with me today,
but I am happy to circle back with you on that.
Senator Cassidy. Now, in your testimony, you speak about
having sensitivities. The more sensitivities you have, the more
robust your analysis. But on the other hand, I could also see
where you ended up sticking ratepayers--my constituents--with a
lot of cost for theoretical things which may occur. It may be
that Louisiana needs electricity, although, almost always we
don't, but in that nth-degree possibility that we do, we are
going to charge you for a potential of an interregional
transmission line which principally is being built to benefit
other people.
Does that make sense?
Mr. Smyth. Yes, your question makes sense. We are, you
know, again, proponents of ensuring that reasonable benefits
are included--known and measurable--more known and measurable
benefits are included in those benefit calculations.
Senator Cassidy. Now, you are also, as I understand,
converting to a lot of renewables. In your testimony, you speak
of renewable energy. In Mr. Stanek's testimony, one of his
references speaks to the fact that it can cost more to have
renewable energy, and you imply that it contributes, and we
have seen other examples where it has contributed to so-called
energy poverty. People are paying so much for their utility
bill they don't have money for other essentials because of the
increased cost of the renewables. How are you all balancing
that in your portfolios? Is this all being driven by mandates?
Is it--you know, I am representing people who, again, they
don't have enough money to pay any bill. Inflation has been
killing them. And inflation in the utility bill--as your
testimony, Mr. Stanek, speaks to--is concerning. So how do we
balance all these different factors so that the customer still
can afford her bills?
Mr. Smyth. Yes, you know, we go through an integrated
resource planning process to determine what generation is most
economic for our customers. And so, it is a least reasonable
cost generation portfolio that emerges from that process,
including in Louisiana, which we are going through that process
now.
Senator Cassidy. But I assume that at some point you accept
the higher cost because of legal mandates.
Mr. Smyth. No, I believe that we move forward with the
least reasonable cost portfolio, notwithstanding, you know, any
mandates. Of course, if there is a state that has a renewable
portfolio standard that we have to meet, you know, of course,
we comply with the law.
Senator Cassidy. Sounds good.
And then, just in my remaining time, Mr. Teply, you speak
of the cost of initiating a project that is never completed
because of litigation and other things that would either thwart
or prolong, even if it is eventually done, and how that cost is
passed on to the ratepayer. I presume that is a real cost?
Mr. Teply. Thank you for the question. Yes, that is a real
cost.
Senator Cassidy. And one in the margin, in the aggregate,
ends up making my patient just--my patient--I'm sorry, I am a
doc, so it comes to mind. Methane means something different to
a gastroenterologist, but nonetheless.
[Laughter.]
Senator Cassidy. The point being is that that marginal cost
actually is more likely to contribute to the individual's
propensity to go into energy poverty than if that cost actually
was not there. I mean, it just kind of begs itself.
Mr. Teply. In general terms, yes.
Senator Cassidy. Yes, I yield. Thank you.
Senator Cantwell [presiding]. Senator Cortez Masto.
Senator Cortez Masto. Thank you, Mr. Chairman, and the
Ranking Member, thank you. Clearly, such an important
conversation. Thank you to the panelists for being here. I am
glad we are really continuing to work on and are addressing the
permitting reform discussion.
You know, I just had a subcommittee hearing here that I
chaired and I talked about a perfect example of this. We have
an industrial park in southern Nevada. We are trying to build
out. We have companies coming there. Unfortunately, in Nevada,
over 80 percent of the land is owned by the Federal Government.
So for each company that wants to bring infrastructure to that
site, they have to get a permit from the Department of the
Interior, which takes at least three years. That is each
company, including a utility to lay the same right-of-way, the
same pipe, the same fiber. They each have to get it.
I mean, we have gotten really out of control here when it
comes to permitting. We need to streamline and we need to work
together for the very reasons that we are talking about. And in
Nevada, we need to work together so that we can continue these
clean energy projects. Nevada is the number one solar economy
in the country. We have the potential here to really lean into
our clean energy and renewables and we can't really slow it
down by not having this efficient permitting that is necessary
and faster permitting. So I am all about having this
conversation and I thank you all for being here.
Mr. Stanek, let me ask you this. In your written testimony,
you touched on your experiences with the Joint Federal-State
Task Force on Electric Transmission. And stakeholders in my
State of Nevada have spoken to the benefits of this
collaboration and coordination and it has really produced
efficiencies that we have all been talking about. My question
to you is, as the permitting reform conversation continues, can
you elaborate on further opportunities to ensure that states
maintain a strong position in future transmission siting
decisions?
Mr. Stanek. Thank you, Senator, for that question.
The state task force has made a lot of progress, and one of
the charter members supporting it was your chairman in Nevada,
the PUC there. This has been an issue where the states have
historically had exclusive rights to site energy infrastructure
projects, particularly electric transmission in their states.
There is some concern that there is a potential power-grabber
preemption of state authority. So it's a needle that state
regulators are very sensitive to thread and be mindful of. I am
a former regulator now by about four weeks, but it's an issue
that I know they are thoughtful of. They are working with their
counterparts at the Federal Energy Regulatory Commission to
discuss these issues every couple of months. They just had a
meeting last week on transmission technologies.
So it's an active engagement. We all want the same goal--
more streamlined, efficient permitting processes of energy
infrastructure because, as I stated at the outset, we can't
wait anymore. This yellow flashing light is soon going to be a
red flashing light.
Senator Cortez Masto. Right.
And while I have you, can you talk a little bit about--
elaborate on your scenario-based regional planning framework.
What is that? What do you mean by that?
Mr. Stanek. For too long, the transmission and grid
operators have been planning just in time for reliability needs
to make sure that the lights stay on, which is very important,
but planning for a longer-term horizon--let's say 20 years, and
looking at various options and scenarios that could occur based
on a 100 percent clean energy environment, a 50 percent clean
energy environment--is not what the RTOs, ISOs, and
transmission authorities have generally done. We have
discovered now that that is very important. FERC's current
rulemaking is examining that. But looking at different
scenarios and trying to pick the one that we most expect to
occur on the horizon will allow us to be more efficient with
the dollars spent where the projects are actually built.
Senator Cortez Masto. Thank you.
Mr. Smyth, you outlined some near-term steps that industry
and policymakers should consider taking to accelerate the pace
of new generation transmission. You talked about the three P's.
Can you elaborate a little bit more on that and why that is
important?
Mr. Smyth. Yes, you know, and we think it all starts with
permitting, and I agree with what Jason just said with respect
to modernizing and expanding planning scenarios. We think that
is important because of the changes in supply and the changes
in demand that are occurring. Weather is changing. We need to
include more expansive weather scenarios in this planning
process. And you know, in the end, if we have a longer planning
process, it will drive more efficient outcomes. Shorter
planning processes tend and can result in a piecemeal grid,
which, you know, if we are thinking about long-term investments
and thinking about, you know, customer affordability in the
long-term, it is important to lengthen that planning timeline.
Senator Cortez Masto. Thank you.
And then, very quickly, Mr. Teply, because you know the
West very well. I am from southern Nevada, where temperatures
are 114 degrees. What should we be thinking about in this
extreme weather that we are seeing in the western states? How
can we enhance that transmission planning or better thinking
about the weather as it impacts what we need for our
transmission needs?
Mr. Teply. Unfortunately, Williams is not in the business
of building electric transmission, so I am not sure that I can
give you a good answer for that.
Senator Cortez Masto. Okay. Thank you.
Thank you, Mr. Chair.
The Chairman [presiding]. We have some cool temperatures in
West Virginia that we could help you with.
[Laughter.]
The Chairman. We now have Senator Cantwell.
Senator Cantwell. Thank you, Mr. Chairman. Thank you and
the Ranking Member for holding this hearing. I want to follow
on my colleague from Nevada, because I, too, believe that we
need to, as western states, as we look at new supply coming
from many different directions, whether it is renewables, like
wind and solar, or small modular reactors or just what might be
coming with geothermal or other types of energy--we need to
plan. What do you think is the best way for us to plan across
the various RTOs? What would you suggest that we undertake here
as a discussion point? I do want to follow up on smart grid
technology in general because I also think as a part of the
country that has very cheap electricity, and seeing it
continuing to build over and over again, there are efficiencies
in the system that, I think, the continued implementation of
both transmission capacity, like we just saw with BPA's
decision to build, and the technological implementations of
things like middle-mile, where utilities and telcos are working
together, are good things.
But what do we need to do to plan across RTOs? What is it
that you think needs to happen?
Mr. Smyth. Yes, I can take a crack at that first. You know,
I think integrating the planning processes a bit more is going
to be really valuable and helpful, if today there is a
commitment to coordinate, but the planning processes in regions
are by and large very separate. And so, I think if you truly
integrate those processes in each region to account for
interregional planning, that will go a long way insofar as, you
know, moving needed interregional transmission along.
Senator Cantwell. And who do you think takes the lead on
that?
Mr. Smyth. I think the RTOs, ISOs, or the grid planning
authorities should do that.
Senator Cantwell. I'm sorry, you are saying inter or intra?
Mr. Smyth. Yes, inter-regional, yes.
Senator Cantwell. Okay.
Mr. Smyth. So that the planning authorities, whether it's,
you know, if you are in an area where there is an RTO or a
balancing authority.
Senator Cantwell. But if we are looking at this now as this
really big and important opportunity for the United States of
America to lead on grid technology, I just think of it almost
as an operating system, coming from a software state too, that
you realize the operating system can deliver you efficiencies.
The grid is at this capacity where it can move power around,
and we want it to. Recently, with these big heat waves, you
could move electricity around, but you need to have that kind
of grid built, which means it needs to be built across an
entire system.
So where do you think that discussion lies? Do you think we
need somebody to lead that at the federal level?
Mr. Smyth. Yes, we agree, and I think that would be led at
FERC.
Senator Cantwell. Okay.
Mr. Stanek.
Mr. Stanek. Senator, you raise a good point, because in
this country we don't have a national transmission planner. DOE
does not plan transmission. FERC does not plan transmission.
They do have some oversight authority. So we leave it to the
grid operators to work together between regions--interregional
communications. And they have done that, but at the same time,
they are running their own grids on a daily basis and they have
a lot to do. Order No. 1000, which was FERC's attempt to
promote competition between regions, has not worked. It has
effectively been a failure over the past 12 years. There were
some interregional requirements in that order, but they have
not come to fruition. So there is some reform that is necessary
there. I believe the current FERC Commission is looking at that
right now and hopefully they will promulgate some new rules,
but it is of critical importance that the regions work more
closely together to transfer resources, to transfer
technologies, to ensure reliability as well.
Senator Cantwell. Well, let me be clear, I'm not a huge fan
of RTOs in the context of like, yes, we are going to sell more
expensive power onto the grid and whoever, you know, is the
highest bidder gets to sell their power. I'm not for that
because what we want to do is drive down electricity cost.
That's what we really want to do. And again, as a state that
has benefited from a great history there, but it seems to me
your notion of a national transmission planner, if that's, you
know, that isn't just at FERC, or maybe, maybe it is at FERC,
but we need to have both the scope of what that gets us as we
think about transmission capacity, and also the oversight at
FERC.
So it seems to me that we are still missing somebody in
addition there, whether you think that that is at a White House
Executive level or over at DOE. But I don't know if you have a
comment on that.
Mr. Stanek. There is one proposal out there coming from
FERC determining whether or not we need something called an
ITC, an independent transmission coordinator. That is currently
under discussion. There are not a lot of details at this point,
but there are supporters of the concept saying well, we do need
one independent body, aside from FERC, to look at transmission,
ensure that the regions are actually working together to build
out transmission in a thoughtful fashion.
Senator Cantwell. Well, I will just take a nod on this. I
would assume everybody agrees that this is a huge opportunity
and we need to have more planning and more coordination.
Mr. Stanek. Yes.
Senator Cantwell. Yes, okay. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you.
Senator Murkowski.
Senator Murkowski. Thank you, Mr. Chairman. I appreciate
the panel here and just the opportunity for yet another round,
a second opportunity, to be talking about permitting and
permitting reform. We have made a little bit of headway, but we
all know that there is so much more room and we need to get
going yesterday.
Mr. Stanek, I appreciate your mentioning of cooperative
federalism in your written testimony, this idea that the state
and federal agencies have overlapping responsibilities and
functions and powers. One of the problems that we face in a
state like Alaska, where we are not part of the Lower 48 grid,
as you all know, we are our own islanded world up there, but
oftentimes, we see the permitting process that contains Alaska-
specific requirements for regulatory agencies. This comes under
ANILCA, the Alaska National Interest Lands Conservation Act,
and they govern how the Transportation Utility Systems (TUSs)--
whether it's broadband powers--how they all proceed through the
permitting process.
So you have got ANILCA that sets aside lots of areas, huge
sections of land for conservation, for parks and wildlife and
the like, but it mandates these unique protections for access
that all agencies are required to use. And you know, it's not a
bad idea. You are trying to balance the conservation here on
the one hand with the needs of those in these small and very
remote villages that have significantly underdeveloped
infrastructure. So given your focus on this, how do you propose
permitting reform address some of these state-specific issues
where you have federal agencies that are just--maybe they are
dragging their feet, maybe it's non-compliance, but what
effectively happens is, the projects are stopped or they are
made so prohibitively cost-expensive that you just can't move
forward. How do we reconcile this? Because it is a big, big
issue in my state.
Mr. Stanek. Well, we see that in every state. It is
unique--obviously, yours is very different than those in the
Lower 48. States obviously want to have the first and last
opportunity to review any infrastructure project. They know
their local communities best. They know their needs best. At
the same time, if the process is open-ended and there is no
time limitation, the state commissions or state siting
authorities could either run out the clock or indefinitely
delay the siting of a project.
Senator Murkowski. Right.
Mr. Stanek. Whether it be for local interest or national
interest. We have never seen state backstop authority used in
the past 18 years. And hopefully, going forward, if legislation
is passed to provide some type of federal backstop, states will
understand. There will be motivation for the states to
officially process the permit, whether they approve or deny.
But at the same time, it will give the states the respect of
their jurisdiction to determine the needs for their citizens.
Senator Murkowski. It is something that I think we talk
about and we can make it flow on paper. It's just harder in
practical application. I don't know whether this question has
already been asked and answered, but you all are professionals
in your areas, and have given a great deal of thought to how
you could design a better permitting process throughout this
country that would allow for the efficiencies and the
protections that everyone is looking for. In your perfect plan,
what's your number one--what is the number one thing that we
could do to put into place, in terms of regulatory policy, that
could make a difference when it comes to enhanced permitting
for this country?
And since I just picked on you, Mr. Stanek, let's start
with you, Mr. Teply, and just go down.
Mr. Teply. Thank you for the question.
I think our number one priority--we touched on it today--
really is to find, to re-find that balance between state and
federal permitting obligations as it relates to natural gas
infrastructure, in particular. The Clean Water Act provisions
that we talked about in the SPUR Act get us part way there.
That becomes a very clear line of demarcation as to who is
ultimately responsible for not only the timelines, but the
reviews, and ultimately the success of that permitting process.
So I think that is Number one for Williams.
Senator Murkowski. I would agree.
Mr. Smyth.
Mr. Smyth. Yes, number one for us is getting the planning
process right, getting the cost allocation right, and then we
believe that permitting and siting become a lot easier when you
get those first two steps right in the first place.
Senator Murkowski. Yes, when people are not arguing over
the cost allocation, that does allow for easier conversation.
Mr. Stanek.
Mr. Stanek. Limiting the timeline for environmental reviews
without degrading them. I think it will be very important to
get these EIS and environmental assessments issued by FERC and
other agencies done quickly.
Senator Murkowski. Okay. See, Mr. Chairman, Mr. Vice
Chairman, here, it's really easy. We got three ideas. We just
build the bill and we are done.
Thank you.
The Chairman. I agree.
Senator King.
Senator King. Yes, Mr. Chairman, I think it's important to
begin to think about this issue from the point of view of
environmental protection. And for years, the orientation of the
environmental community is to say ``no.'' And in order to
electrify the United States and develop a true green energy
future, we are going to have to start saying ``yes.'' And I
would submit for the record, Mr. Chairman, the article by Bill
McKibben in a recent edition of Mother Jones. The title of the
article is ``Yes in Our Backyards.'' Because he chronicles his
journey from--he's one of the most outstanding
environmentalists in the country--to the realization that in
order to achieve the future we want environmentally, we are
going to have to build things, including a lot of new
transmission. So I think that's an important context to this
hearing. This isn't just about getting rid of environmental
regulations because we don't like them. This is trying to
streamline a process, not the underlying policy, but the
process in order to achieve the kind of future that we all
want.
[The article referred to follows:]
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Senator King. The second suggestion I have is, we ought to
have James Madison at this hearing because we are really
talking about some very deep issues of federalism and the
relationships between the federal and the state. Interestingly,
as I have been listening--in both pipelines and transmission--
in pipelines we are talking about federal backstop authority on
the state's ability to block a project under Section 401. That
is a problem you just identified. On the transmission side, we
are talking about states' ability to permit transmission, but
there needs to be a federal backstop in order to be sure--your
term I love, Mr. Stanek--motivation for the states to
efficiently process.
Mr. Stanek, do you agree that we have got to find--there
has to be some federal backstop, I believe, in both cases, but
we can't do it in just one and not the other.
Mr. Stanek. There has to be a middle ground going back to
cooperative federalism, where the----
Senator King. That is a nice term. Madison would have liked
that term, I think.
Mr. Stanek. I think he would approve.
And we are moving in that direction. We have had backstop
siting authority since EPAct 2005. It has not been used for a
number of reasons. Changes have been made in the recent IIJA
legislation. But motivation is important, otherwise state
agencies, like any other agency, have resource limitations, and
these are very expensive, comprehensive reviews that need to be
undertaken. Some agencies, like my former agency, only 160
employees--it could take 6 months, 12 months, 18 months or
longer to conduct a review. However, if there is a federal law,
that would effectively allow this----
Senator King. A year.
Mr. Stanek. A year. It would depend on the project. If it's
a simple solar project, we could get that done in 16 months. If
it's offshore wind turbines or interstate transmission lines,
it could take longer than a year, but at the same time----
Senator King. Does the term cooperative federalism, to you,
mean there would be a backstop at some point, whether we
don't--whether it's a year, 18 months, two years, but there has
to be some incentive to the state to do its duty on these
projects?
Mr. Stanek. As I stated a moment ago, the motivation needs
to be there. So yes, I think a deadline needs to be in place at
some point.
Senator King. Thank you.
Mr. Smyth, I don't want to spend a lot of time on this, but
one of the delays now in developing the grid is not permitting
reform, necessarily, but interconnection issues. I have talked
to developers that are in line forever, not with the PUC or the
FERC, but with the ISO. Is that an issue that you see, that
something--I don't know whether we need to address it, but that
is a bottleneck, is it not?
Mr. Smyth. Yes, Senator, it is a major bottleneck that you
have identified there. So in some regions there are, you know,
hundreds of thousands of megawatts queued up seeking to
interconnect and we need to move through those processes
faster. In addition to that, you know, we would like to see a
prioritization of projects in that queue for load-responsible
entities such as ourselves who have an obligation to serve end-
use customers.
Senator King. Thank you.
Mr. Stanek, I am running out of time, but one of the things
that bothers me is the incentive toward building as opposed to
non-wires alternatives, or reconductoring--that is a wires
alternative, but you know what I mean--storage, all the ways
that we can minimize the capital cost. It bothers me that the
incentive to a utility is to maximize the capital cost because
they make a greater return on the invested capital. They don't
make a rate of return on a demand-side management program. Talk
to me about that.
Mr. Stanek. Obviously, we have a lot of other technologies
now, all these grid-enhancing technologies that could often
come in as----
Senator King. Here's one right here (the Senator holds up a
small conductor in his right hand). This is a new conductor
that will double the volume of power that will be carried. It's
more expensive, but it would cut line losses, double the
amount, you don't have to build new towers. That's the kind of
thing that I am talking about.
Mr. Stanek. And state regulators have been looking at that
carbon core fiber technology as well. You could do it at a
fraction of the cost of building a green line transmission.
Senator King. Right.
Mr. Stanek. So you take down the old lines. You put up the
new line. At the end of the day, state regulators want to be
cost-effective because I could tell you that the only thing
customers hate more than their utility bill is not having
reliable electricity.
Senator King. Of course.
But is there--should we be talking about a federal policy
that says before you start talking about a major capital
investment, you have to show us that you have exhausted your
non-wires alternatives?
Mr. Stanek. That has been in the discussion. I know FERC is
currently----
Senator King. Some states have that policy.
Mr. Stanek. States do have that policy. We do review the
transmission projects and we want to make sure they are cost-
efficient as well as delivering the reliability needs. So there
is some oversight at the state level as to the need--do we need
this project? And if so, what type of a project? What type of
infrastructure? Obviously, the most intrusive is building a new
green fill transmission line.
Senator King. Got it. Thank you.
Thank you, Mr. Chairman.
The Chairman. Okay.
The first panel discussion will come to an end now. I want
to thank you all. It has been very helpful. We have got to do
something. We all agree on that, and we are all trying to do
something in a bipartisan way, working together, with the
concerns we have, but also, the security of our nation's
energy.
So with that, I want to thank you all. This first panel
will be adjourned.
And the second panel, if they will come forward, we will
get started.
The second panel will come to order and we are going to get
started again here. And I want to thank you all for being here
and sharing with us your expertise, and we are going to start
now with our opening statements. We will have Mr. Milito. He is
President of the National Ocean Industries Association.
Then, we are going to have Mr. Pete Obermueller, who is
President of the Petroleum Association of Wyoming.
And then, we will have Ms. Kelly Speakes-Backman, Executive
Vice President--Public Affairs----
Ms. Speakes-Backman. Invenergy.
The Chairman. Invenergy. Invenergy.
Okay, so first we will start with Mr. Milito.
STATEMENT OF ERIK G. MILITO, PRESIDENT,
NATIONAL OCEAN INDUSTRIES ASSOCIATION
Mr. Milito. Thank you. Chairman Manchin, Ranking Member
Barrasso, and members of the Committee, thank you for inviting
me to testify today. My name is Erik Milito. I am the President
of the National Ocean Industries Association, or NOIA. At NOIA,
we represent all segments of the offshore energy industry. This
includes oil and gas, wind, offshore minerals, and offshore
carbon sequestration. Our membership includes energy
developers, but also the entire supply chain of companies that
make up the offshore energy system. This includes fabricators,
vessel service companies, marine construction companies,
offshore subsidy engineering companies, and many others. The
offshore energy sector is a proven leader in solving energy
challenges and delivering diverse sources of energy to the
global economy. The offshore industry has unparalleled
expertise and experience deploying and scaling technologies at
levels necessary to produce foundational energy sources and to
achieve decarbonization objectives.
As we move forward and work together to build the energy
system of tomorrow, we should focus on securing our oil and gas
from low-emission basins, like the Gulf of Mexico, which has
among the lowest carbon intensity barrels of the producing
regions of the world; promoting a pathway for U.S. leadership
in offshore wind; and removing roadblocks to investment in and
the build-out of carbon capture and storage projects. One of
the most promising opportunities for CO2 storage in
the U.S. can be found in federal waters, particularly in the
Gulf of Mexico. However, government policy out of Washington
plays a central role in the ability of our industry to make the
investments and build the projects to sustain the American
economy. We appreciate the continued efforts of the Chairman,
Ranking Member, and members of the Committee to work together
and develop solutions to streamline the pathway for investment
in U.S. energy and infrastructure projects, whether it's oil
and gas, wind, or carbon storage, companies need certainty and
predictability in leasing, permitting, and regulation in order
to commit the funding and resources to projects that often cost
billions of dollars to construct.
Congress has a central role in helping to overcome the
obstacles that often arise in a regulatory process and
oftentimes in litigation for energy projects. For the
foreseeable future, our economy will depend upon affordable and
reliable supplies of oil and gas. The U.S. Gulf of Mexico oil
and gas sector supports more than 350,000 good-paying jobs
located throughout the country, and it produces among the
lowest carbon intensity barrels in the world. For our energy
security and national security, the Gulf of Mexico should be a
no-brainer as a preferred choice for securing our oil and gas
supplies. Unfortunately, in June 2021, the Administration
implemented a pause in offshore oil and gas leasing that was
contrary to law and served to block investment in U.S. energy
projects. To compound things, the Administration allowed the
leasing program for offshore oil and gas to expire at the end
of June 2022, putting in place the first-ever gap in offshore
leasing programs, further jeopardizing the long-term prospects
for U.S. energy production.
More recently, just five days ago, on Friday, July 21, the
Administration entered into a settlement agreement with
opponents of U.S. energy production that will remove ten
million-plus highly prospective acres from the forthcoming
offshore lease sale in the Gulf of Mexico. This is an apparent
end-around of the requirements of the Inflation Reduction Act,
and it completely circumvents the established regulatory
process for governing the issues that were raised in
litigation. Congressional efforts should be considered to
restrict these types of sue-and-settle, or regulation-by-
litigation tactics that bypass Congress and the public process
and jeopardize U.S. energy production. Also, under the
Inflation Reduction Act, periodic offshore oil and gas lease
sales are now required in order for Interior to issue offshore
wind leases. Many of the same companies that built the offshore
oil and gas sector are now participating in the build-out of
the offshore wind sector. A steady stream of offshore oil and
gas and offshore wind lease sales is needed for the supply
chain to fully realize these incredible opportunities before
us. We encourage this Committee to consider legislation that
will serve to preserve the future of offshore leasing for both
oil and gas and wind.
The good news is that the members of this Committee have
introduced and supported legislative proposals to help overcome
the administrative roadblocks to energy investment. The
Offshore Energy Security Act of 2023, the Building American
Energy Security Act of 2023, and the SPUR Permitting of
Underdeveloped Resources Act, are all examples of smart
legislation that could help knock down barriers to investment.
Whether it is in West Virginia, Wyoming, or the Gulf of Mexico,
our future energy security depends upon a reasonable, workable,
and streamlined federal regulatory framework for all forms of
energy.
Thank you for the opportunity to testify. I look forward to
your questions.
[The prepared statement of Mr. Milito follows:]
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The Chairman. Now, Senator Barrasso.
Senator Barrasso. Well, thank you, Mr. Chairman. And I
would like to welcome to the Committee today Mr. Peter
Obermueller, who is one of our witnesses at today's hearing. We
have known each other a long time. His father is in the Wyoming
Legislature. He represents my home community.
Pete, thanks for traveling here from Casper. We were on the
same flight yesterday. You were sitting next to Senator Risch,
who wanted to stay here and listen, and unfortunately, had
another engagement in the Foreign Relations Committee. We
appreciate you being with us at the nation's capitol. You are a
Wyoming native, attended Natrona County High School in Casper,
went on to graduate from Concordia University in St. Paul and
then received a Master's Degree in Public Policy from the
University of Minnesota.
Since 2019, Pete has served as the President of the
Petroleum Association of Wyoming. For years, he served
previously here on Capitol Hill as a legislative director to
now-Senator Lummis, when she was in the House of
Representatives, and prior to that he served as a staff member
for Wyoming's Representative Barbara Cubin. Pete is an expert
on issues facing oil and gas operators on federal land in the
West. We are so grateful for the opportunity to hear from you
today. Thanks so much for joining us. I look forward to your
testimony.
Thank you, Mr. Chairman.
The Chairman. Mr. Obermueller.
STATEMENT OF PETE OBERMUELLER, PRESIDENT, PETROLEUM ASSOCIATION
OF WYOMING
Mr. Obermueller. Thank you so much, Mr. Chairman, Ranking
Member Barrasso, members of the Energy and Natural Resources
Committee, thank you for allowing me to speak with you
regarding the leasing and permitting challenges on federal
lands. I want to emphasize a few specific obstacles and policy
prescriptions today, but it all boils down to one thing--
American energy producers can and will invest in federal land
production, but to do so, they need predictability and
reliability in our regulatory and judicial processes.
In Wyoming, efficient and effective government oversight is
not a theoretical question, because the Federal Government
controls nearly three-quarters of Wyoming's mineral resources.
In 2022, the oil and natural gas industry provided over $2.34
billion in tax revenue to Wyoming. Now, Wyoming is a small
state with a small budget. So to put that in perspective, that
is 67 percent of the state's two-year general fund budget. Oil
and gas is Wyoming's primary economic driver, but the Federal
Government is in the driver's seat. It is no secret that the
Biden Administration has severely curtailed leases of federal
acres since 2021. But now that leases have at least nominally
restarted, it is important that this Committee understand the
ways that the BLM continues to minimize lease availability and
avoid the issuance of permits.
Even in the best of times, the BLM's decision-making
regarding what leases are available is opaque. But the current
process is even worse. After offering no leases at all in 2021,
the BLM now is deferring leases in extraordinary numbers--462
parcels, covering more than half a million acres have been
deferred without reasonable explanations as to why and with no
guidance on how to remove them from this limbo status. An
egregious but not a unique example is depicted in this map of
an actual project in Wyoming today.
[The map referred to follows:]
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Mr. Obermueller. The squares are, of course, one-mile
sections containing 640 acres each. Every single acre in this
map is already leased for oil and gas development, save the
ones I will mention. Focus your attention on the yellow areas.
These sections are leased for development from one single
company, but note the two donut holes in the middle of the
yellow block. These acres were deferred by the BLM in the most
recent lease sale, making production in the surrounding yellow
areas functionally unavailable. What compelling reason exists
to prompt deferral of the donut holes in an already-leased
field that does not exist elsewhere in the field?
The BLM has denied requests to make those areas available
under an agreement that there would be no surface disturbance
at all. Neither has the BLM outlined a process to release those
acres for bid. So a company now pays $5 an acre to nominate a
parcel that may never be offered at all or put into deferral
purgatory with no process for removal. Once these leases are
secured, operators must then undergo lengthy and expensive work
to meet all the requirements necessary to earn a permit to
drill. Permits are an essential component of drilling programs,
so efficiency and processing is always an issue. Lately, the
BLM's performance has lagged, as processing times have
increased 124 percent since 2018, rising to 271 days. What is
new and alarming is the BLM, on its own volition, is
withholding permits on acreage subject to litigation, even if
the court has not enjoined the issuance of permits.
Approximately two million acres are languishing in this self-
enjoined status.
Now, self-enjoining is a real problem, but it is
understandable in this one sense. The agency has an extreme
bunker mentality resulting from the onslaught of litigation on
their every decision that approves human activity on federal
land. Nearly every lease in Wyoming and every single permit
issued since 2021 is the subject of litigation. A recently
completed resource management plan amendment in Converse County
is an example. After nearly seven years of collaborative work,
the BLM issued a decision that provides for careful protection
of wildlife and sustainable energy development. It is clever
and creative. These are two words not usually used to describe
the BLM. But unfortunately, after inexplicably waiting for two
years, notorious activist litigators have now filed to overturn
that amended plan. But recent Congressional attention on the
paralytic state of permitting is encouraging. But so long as
policy decisions are made in the closed confines of a
courtroom, instead of the halls of Congress, the job is not
complete. The good news is, most of what I have discussed can
be immediately corrected with passage of the SPUR Act. That
legislation would restore predictability by making leasing and
permitting more consistent, stable, and timely, and I urge its
passing.
Finally, Mr. Chairman, the development of affordable,
reliable energy has done more to advance human flourishing than
any other development in history. I am enormously proud of
Wyoming's 100-year contributions to providing energy to all
Americans. We all know that global production of oil and
natural gas is going to continue for decades to come. I worry
that Wyoming will be disallowed from playing its part. This
Committee can help ensure Wyoming's energy future.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Obermueller follows:]
GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
The Chairman. Thank you.
Ms. Speakes-Backman.
STATEMENT OF KELLY SPEAKES-BACKMAN,
EXECUTIVE VICE PRESIDENT, PUBLIC AFFAIRS, INVENERGY
Ms. Speakes-Backman. Hello and thank you, Chairman Manchin,
Ranking Member Barrasso, and members of the Committee. Thank
you for inviting me to testify today. Invenergy is a leading
developer, owner, and operator of clean energy solutions and
has led the clean energy transition and advanced American
energy independence for more than 20 years. We have
successfully developed more than 200 projects, 45 of which are
in states represented by members of this Committee. We also
have six projects currently under development on public lands
and offshore.
As one of the largest American clean energy developers, it
will be no surprise to you when I say we need predictable and
transparent permitting processes to build the next generation
of clean energy projects. We therefore welcome the recent
bipartisan efforts to examine this issue and identify needed
reforms. As part of any legislative reform, however, we must
also preserve and prioritize meaningful engagement with tribal
nations, landowners, and local communities. Invenergy is a
leader of robust community engagement approaches, and we look
forward to answering any questions you might have about how we
incorporate this engagement into our project budgets and
planning. Now, given that the topic of this panel is permitting
on federal lands, we want to identify what we found to be
challenges in constructing energy infrastructure in federal
public lands and waters and what we believe to be reasonable
and practical solutions to enable implementation.
So first, we support policies that encourage responsible
renewable energy development on suitable Bureau of Land
Management lands. For example, BLM's proposed renewable energy
rule would ease the burden on energy developers by reducing the
cost of leasing federal public lands. BLM could further spur
development by taking common-sense measures, like revising its
programmatic EIS for solar planning to prioritize siting
projects on lands that are near planned or existing
transmission infrastructure. In addition to these substantive
reforms, agencies like BLM and BOEM--the Bureau of Ocean Energy
Management--need sufficient and consistent resources to ensure
that they can efficiently evaluate project authorization in a
timely manner.
Second, offshore wind developers and the offshore wind
supply chain need greater certainty and predictability to be
able to take on these major private investment risks. The
offshore wind industry is expected to support up to 83,000
American jobs by 2030, but only if offshore lease sales occur
on a regular schedule and projects are permitted without delay.
Companies must be able to plan and budget years in advance in
order to make these massive investments, but it is not going to
happen until lease sales are conducted on a consistent basis
and the permitting process is efficient and predictable.
Finally, we have to do more faster on interregional
transmission. As we saw during Winter Storm Elliot and Winter
Storm Uri and the multitude of summer and winter weather events
before that, threats to our electric grid pose a risk to our
homes, our hospitals, our military bases, and industries--and
in extreme cases, to human lives. The most widely recognized,
but underutilized major-scale solution is interregional
transmission, which enables imports and exports across regions
to move power from where it's available to where it's needed
most. Unfortunately, today, federal policy does not adequately
facilitate interregional transmission. Existing processes for
planning have been largely ineffectual because they don't set
meaningful and measurable targets, they don't require
cooperation between regions, and they don't quantify
reliability, resilience, and operational benefits.
Fortunately, members of this Committee have proposed
legislation to address these issues by providing a clear
framework to value interregional transmission benefits through
your bill, Chairman Manchin; to require FERC to develop
planning processes for national interest transmission lines
through Senator Heinrich's proposal; and third, to require each
region to have a defined percentage of import and export
capability with neighboring regions through Senator
Hickenlooper's proposal. All of these are bipartisan solutions
and should be on the table.
So in conclusion, we are at an important inflection point.
We have an opportunity to make the reforms and the investments
necessary to maintain American energy dominance in the 21st
century, creating millions of jobs here at home and ensuring
that American companies like Invenergy can continue to lead the
clean energy transition. So thank you for the opportunity to
address you today. I am happy to answer any questions you may
have.
[The prepared statement of Ms. Speakes-Backman follows:]
GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
The Chairman. Well, let me thank all of you for being here.
I appreciate it and your statements are well taken.
As you all know, we passed the Inflation Reduction Act in a
balanced approach, trying to look at how we could have an all-
in energy policy, but also have the security that we needed for
the energy that we had right here in our backyard. We were not
going in that direction. We think that bill, basically, was
directing this government and this Administration to get back
on track. So with that, I can't understand--it's pretty simple
that solar and wind on federal lands and waters, they can't
proceed unless we are holding meaningful oil and gas lease
sales. They all go together. And if they think one without the
other is going to happen, it won't. It appears that renewables
and oil and gas both face the same challenges of not having
consistent sales. Onshore, the Administration cannot sign
agreements for more than 20 wind and solar projects currently
under review because they haven't met the IRA's oil and gas
lease sale requirements. We did this on purpose. We are all in
this together. We have got to make sure we have reliable,
affordable, dependable energy.
And so, how important is it, I mean, to get off the dime
here? Do you all work with both sides of the aisle here trying
to figure, hey, we are all in this together? Have you had
conversations with people who are protesting, objecting,
stopping, and suing, that they are basically killing
themselves--shooting themselves in the foot?
Mr. Milito.
Mr. Milito. Yes, we are constantly in conversation with
members of both sides of the aisle--Senate, House.
The Chairman. Do they know, I mean, the advocates who want
no oil and gas leases at all, okay, or coal production
whatsoever, do they know that basically it is all tied
inextricably to----
Mr. Milito. I don't believe there is that level of
understanding of the provisions of the IRA and how they are
going to impact the future wind leasing, both onshore and
offshore. We are trying to make sure we educate everybody on
that and we are trying to make sure there is some urgency
around moving forward with the oil and gas sales so nothing is
impeded as we move forward.
These are projects that are--the competition for the money
behind these projects is global. We don't want to lose that. We
don't want to see that go to other parts of the world. We want
that here in the U.S. and that is what we are trying to convey.
The Chairman. What do you see, Mr. Obermueller?
Mr. Obermueller. Yes, thank you, Mr. Chairman. I think, as
you well know, we are actively in conversation with all sorts
of people about these issues on federal lands----
The Chairman. You all studied the bills. You three probably
have studied that bill as well as anybody, you know, and it's
pretty clear what the intent was of the Inflation Reduction
Act. And it should, hopefully--do you all believe it was a
balanced approach to how we produce energy in our country and
having the results, basically, from an energy policy that would
work?
Mr. Obermueller. It was a balanced approach and it was a
very good start, yes. I think I would divide the folks that I
am talking about in my testimony into two camps, those that
want to have a serious discussion about infrastructure for all
sources of energy, of which Wyoming provides every source.
The Chairman. Right.
Mr. Obermueller. And those that don't. They just want to
spend the time in the courtroom.
Ms. Speakes-Backman. I believe that the Inflation Reduction
Act was an amazing step toward creating more clean energy and
being able to work on a bipartisan level to get that forward.
Now, as Invenergy, we don't have oil and gas leases in mind.
The Chairman. Right.
Ms. Speakes-Backman. But we believe that we need to do
everything----
The Chairman. You understand you can't have what you want--
--
Ms. Speakes-Backman. Absolutely.
The Chairman [continuing]. Unless we are doing what we
need.
Ms. Speakes-Backman. We believe that it's critical to take
all necessary steps to ensure continued offshore wind lease
sales.
The Chairman. I know producers in Wyoming are concerned
about the Administration withholding some of the most
productive areas from oil and gas leasing, and I share your
concerns. At the same time, I am concerned about proposals that
will restrict Interior from withholding any areas from leasing
because many of our federal lands are managed for multiple use,
which includes hunting, fishing, hiking, off-road vehicles,
timber grazing, and more. There is a big difference between
land being available for leasing versus land that must be
leased upon request. So what are your suggestions for
legislation that would ensure producers aren't only offered
unwanted acreage, but also protects other uses of federal
lands?
Mr. Obermueller.
Mr. Obermueller. Thank you for that question, Mr. Chairman.
I think, again, to your point, we can strike a balance
there. The Bureau of Land Management was created to provide----
The Chairman. The donut hole you showed on your map was
very, very compelling to me, and very interesting. They
intentionally, cleverly did this, basically, to prevent, I am
sure, what is going to be horizontal drilling. Correct?
Mr. Obermueller. Correct.
The Chairman. I know exactly what it was for.
Mr. Obermueller. That is precisely why it becomes
unavailable in those yellow blocks because you need the space
to horizontal drill.
The Chairman. I know. They've got you stopped completely.
Mr. Obermueller. Right.
So the SPUR Act does take care of some of this in the sense
that it requires--it does not require 100 percent of ceding to
what industry has asked for in terms of nominated acres, but it
does ask for some sort of coherence in what industry thinks is
a reasonable place to develop, and issuing leases, at least in
part, based on that. And that is a reasonable balance I think
we can find and there is legislation in front of you that does
that.
The Chairman. We might want you to keep that map or leave
it here with us so we will bring BLM back in and let them
answer that.
No further questions.
Senator Barrasso.
Senator Barrasso. Thanks, Mr. Chairman.
Mr. Obermueller, so the BLM has held just two oil and gas
lease sales in Wyoming since Joe Biden took office. The Mineral
Leasing Act requires quarterly lease sales, meaning there
should have been ten sales under President Biden so far. So I
have a chart up here that shows the average amount of acres
leased, and it's in millions of acres, by previous presidents.
Well, you can see Joe Biden, right there at the bottom, is
defying the law and has wrecked the leasing process.
[The chart referred to follows:]
GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
Senator Barrasso. Can you talk about the impact that this
BLM refusal to follow the law has had on the State of Wyoming?
Mr. Obermueller. Thank you, Senator Barrasso, thanks for
the question. Happy to do so. I want to answer it in two ways.
Number one, just the fiscal impact to the State of Wyoming. I
mentioned how important oil and gas is to our economy and to
Wyoming's revenues. The two lease sales that the Administration
has offered, the first brought in $14 million, the second
brought in $13 million. At that rate--you mentioned that they
have missed ten--Wyoming and the Federal Government should have
been receiving around $130 million. So there is a quantifiable
dollar amount impact for sure.
The second part that I want to emphasize, Senator, is that
the issue of leasing for Wyoming has everything to do with the
exploration, not necessarily the production. I was so
encouraged to hear Senator Manchin differentiate between
leasing and permitting in that way. Wyoming is an exploratory
field still. It is different from other fields in that sense.
We need leasing in order to explore for new fields. That is
what attracts companies to Wyoming, is that exploratory nature.
And as we cut off leasing and cut that down, we choke off the
ability to explore for new resources, and that hurts us in the
long term.
Senator Barrasso. So the failure to lease federal lands
resulted in less oil and gas production and simply caused
companies to move elsewhere.
Mr. Obermueller. Right. In terms of the expense and in
terms of leasing, if companies have production in other basins,
of course, Colorado or New Mexico or other places, they fight
internally for capital, and the barriers that BLM puts in front
of Wyoming puts us as a competitive disadvantage.
Senator Barrasso. So Mr. Milito, do you see the same
reaction from companies in offshore oil and gas sectors?
Mr. Milito. Yes, the offshore sector is highly competitive.
It makes up about 30 percent of total global oil production,
which is 100 million barrels a day. And these are projects that
are competing on a global level. You are looking at places like
Guyana, Southeast Asia, the North Sea. It is very difficult and
challenging to continue to make investments in a region like
the Gulf of Mexico that is highly prospective when you have
uncertainty and you don't have the predictability that you
might have in another part of the world. So the money could
definitely leave, and you know, you put those jobs at risk.
Senator Barrasso. So Mr. Obermueller, you talked about
activists having challenged essentially every oil and gas lease
sale that BLM has held in Wyoming. They include lease sales
held by, you know, even held by the Obama Administration. The
lawsuits are often filed years after the leases have been
issued. These groups ask judges to cancel leases that are
valid--existing contracts between BLM and private companies.
How do these lawsuits affect your members' ability to produce
on federal land?
Mr. Obermueller. In some cases, Senator Barrasso, it
completely stops the ability to produce. Currently, there are
2,573 leases under litigation in Wyoming. In some cases--in
many cases--it has prompted the BLM to, as I mentioned before,
self-enjoin, but perhaps one of the most egregious examples of
that is, legally, the leases offered in the fourth quarter of
2020, the legal process was completed. The leases were
available, but for fear of litigation, the BLM has yet to
actually issue those leases from Q4 2020 as a result of
litigations.
Senator Barrasso. So to make that point, since Joe Biden
has taken office, BLM has decided to stop issuing permits on
oil and gas leases that are under litigation, is what you just
said.
So often BLM has made this decision even though
environmental activists have not actually won a ruling in
court. So as a result, companies have not been able to develop
hundreds of thousands of acres in Wyoming based on this
decision. As a matter of basic fairness, should environmental
activists get what they want without actually winning in court?
Mr. Obermueller. Mr. Chairman, it does defy a little bit of
explanation. You know, obviously, access to courts is very,
very important, but the process should play out and there
should not be an incentive to continually file lawsuits and
then have an agency self-enjoin during that process. The
process should play out and it should play out fairly.
Senator Barrasso. So Mr. Milito, the Biden Administration
set a goal to deploy 30 gigawatts of offshore wind by 2035. I
will note that offshore wind requires over 33,000 pounds of
minerals per megawatt of capacity. It's about 12 times the
amount of minerals that natural gas needs per megawatt. Does
the United States have policies in place to support the
development of mineral resources that offshore wind energy
needs?
Mr. Milito. Well, we lack a comprehensive strategy for
securing the critical minerals needed for our energy future. We
need to work together to make sure that China does not remain
the dominant player in this space. We have companies that can
do offshore mineral mining, and they would be helped by the
Administration if they stepped up and played a role in getting
them access to some of these areas around the world where they
are trying to deploy their technologies to have a U.S. company
in that space.
And you are very well aware that, you know, the State of
Wyoming has various critical minerals, and BLM, of course, has
a lot of jurisdiction over that that prevents that kind of
development. But the SPUR Act has provisions in there to
address a lot of this and we need to work together to develop
this comprehensive strategy so that the U.S. becomes a leader
in critical mineral mining.
Senator Barrasso. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you.
Senator Cortez Masto.
Senator Cortez Masto. Thank you, Mr. Chairman.
I am going to ask Ms. Speakes-Backman to focus on this for
me and help me out here. So in Nevada there are 96 pending
applications to deploy solar projects statewide. Fifty-one of
them are in southern Nevada. There is a growing bottleneck. One
of the things I constantly hear, and you touched on it a
little--both from BLM officials and from Nevadans and those
that are trying to do the project--is that the bottleneck is
caused to some extent by understaffing, or a lack of staffing
at our local BLM offices to be able to move the permitting
along. Now, with that said, I also know that in the Inflation
Reduction Act, Congress provided about $150 million to the
Interior Department to support that environmental review and
permitting to move it through quickly.
My question to you is, what are we missing here? Is it an
inability to hire these individuals? Because they have the
money. BLM has the money to do it. Is it a lack of interest? Is
it an inability to hire that workforce? What are you hearing
and seeing on the ground when it actually matters to move these
permits along?
Ms. Speakes-Backman. Thank you so much for this question
because I do believe, when it comes to federal land permitting,
or permitting generally, really the biggest impediment that we
have to this is staffing, is being able to get the right folks
at their desks and working and the right training involved to
make sure that that pipeline is involved. The renewable
energy--the RECO offices that are throughout the United States
are woefully understaffed, frankly, and I'm not sure that it is
necessarily a lack of interest. It takes a long time to hire
within the Federal Government, as I am sure you are very well
aware.
Senator Cortez Masto. Absolutely.
Ms. Speakes-Backman. But it also takes a more steady level.
As these agencies like BOEM and BLM and NOAA are working
towards goals, such as 30 gigawatts or 25 gigawatts by 2025 on
federal lands--as they are trying to work toward that, staffing
takes a long time, and we absolutely--we have the funding there
now, thankfully, through the leadership of this program.
Senator Cortez Masto. Right.
Ms. Speakes-Backman. We just need to be able to--for
example, in the IIJA, there were creative ways of creating
employment statuses where you could hire a lot faster. And it's
simply--you have to be able to get these sorts of different
types of hires, rather than just the federal employees, to get
the hiring done faster.
Senator Cortez Masto. Yes, and that is what I would be
interested in hearing from our folks at Interior, is what can
we do to streamline that process, because it is a challenge, I
hear, because of the rules at the federal level, but if we are
really--the funding is out there, they have the ability to
actually make the hires, it's just getting through the process
much quicker and moving it.
Ms. Speakes-Backman. And perhaps some detailing, creative
detailing. We have a number of ideas that I am happy to forward
to you, afterwards, but you can detail from one agency from the
other. And also, I would say that solar and wind, and I would
suggest also for geothermal expertise throughout the country. I
think that is a really important element as well.
Senator Cortez Masto. And thank you, because I know, and
this is something I have been pushing, again, to support, is
really growing opportunities around geothermal, not just in
Nevada, but across the country. There is so much potential. But
as we continue these projects, as we are hearing, there is a
backlog. And the first step for me is to start with the agency
itself. The funding is there, but how do we make it easier for
them to hire, and how do we get more people in the pipeline?
Ms. Speakes-Backman. It is the number one impediment, in my
mind, for clean energy development on federal lands, is being
able to get the right people in the right place, to have the
full resources and have steady resources across years to be
able to retain that talent and to retain the processes keeping
in time.
Senator Cortez Masto. Thank you.
And then, I only have so much time left, but I also picked
up on your statement, which I think is important, thank you.
Invenergy is in Nevada. Thank you. I was at one of the ribbon
cuttings with MGM and one of the AEP renewables.
But you talked about local community engagement--how
important it is to have that community engagement--local,
federal, and tribal nations. And I guess my question to you is,
how can that be used for a model, particularly now that we have
that new federal office within FERC, the Office of Public
Participation? Can you talk a little bit about the importance
of that community engagement and why it matters?
Ms. Speakes-Backman. Yes, I mean, absolutely. It is
incredibly important. And the success of our projects and any
project depends on our ability to really build trust with those
communities and not just tell them why we are in their town and
why we are going to be doing good for them, but hearing from
them--what are their needs, what are their priorities, how can
we support both financially, but also getting the end goal of
the project--getting, you know, making sure we are on the same
page. It is incredibly important. And not only is it important
to make sure that we are accepted, but it can help accelerate
the permitting process and it can help accelerate--if you have
the community behind you--it can help get those projects done
more quickly.
Senator Cortez Masto. Thank you.
Ms. Speakes-Backman. Thank you.
The Chairman. Thank you.
Senator Lee.
Senator Lee. Thank you very much, Mr. Chairman.
President Biden, flanked by a veritable army of unelected,
unaccountable bureaucrats, have made their goal very, very
clear. Their goal is to hinder fossil fuel production on
federal lands and in federal waters by any and every means
necessary. And they are doing quite a job of it. In tandem with
the climate provisions of the Orwellian-named Inflation
Reduction Act, which Congressional Democrats passed last
summer, new regulations are coming out of the Department of the
Interior, the EPA, CEQ, and even agencies like the Securities
and Exchange Commission chilled capital investment of oil, gas,
and coal production. This, at a particularly inopportune time.
You know, the Democrats' war on fossil fuels has only added
more risk, more uncertainty, and more suffering to this process
and to the countless permitting obstacles that energy projects
were already facing. And this is contributing to a situation in
which energy prices and inflation are making Americans even
poorer, at the same time when they are suffering from the
rampant inflation that we have faced over the last two and a
half years because of excessive federal spending and excessive
federal regulatory intervention.
Instead of allowing American operators to produce
domestically, the Biden Administration has done everything that
it possibly can to slow domestic oil and gas production to try
to appease the radical fringe elements of the environmental
lobby while groveling to Venezuela and Saudi Arabia for more
oil supply to try to bring down prices for a moment, for short-
term political gain. This strategy makes absolutely no sense.
We have boundless domestic oil and gas reserves that are far
better, environmentally speaking, and far better for Americans,
economically speaking. Substantive regulatory and permitting
reform is indeed long overdue. And so, I am glad we are having
this conversation today, and I thank the Chairman for convening
the hearing.
Mr. Obermueller, I would like to start with you. As
environmental groups have increased their opposition to the
production of oil and natural gas on federal lands over the
last 25 years, perhaps it comes as no surprise that in FY22,
for the first time, 100 percent of the parcels posted for sale
or for which there were leases going on were protested and
litigated--100 percent. That had never happened before. This
kind of litigation, of course, targets permits, leases,
licenses, permits for drilling and so forth, and of course,
NEPA analysis for wells, gathering lines, and pipelines.
In a bill that I have called the UNSHACKLE Act, I tried to
reform the NEPA process. It is a bill that I have introduced in
the past and that I will be reintroducing in Congress again
soon. And I proposed a uniform 150-day statute of limitations
for all NEPA-related claims, along with tightening the
requirements necessary in order to obtain prompt judicial
review.
Can you describe how these judicial reforms would add some
more certainty to the permitting process for oil and gas
projects?
Mr. Obermueller. Certainly, thank you for the question.
I think, as you pointed out in your remarks, that we need
to acknowledge that we have, perhaps inadvertently, but we
certainly have established a system that incentivizes and
rewards driving policy changes through the judicial branch. And
whether it's your act--I know that I have seen iterations of
that and appreciate that work and other efforts, specifically
regarding taxpayer funding of reimbursements for litigation. We
have to find ways to curtail that incentive and reward
structure for repeated litigation not intended to correct an
injustice, necessarily, we all want access to courts for that,
but to so-called correct procedural issues, really whatever you
can come up with because there is no skin in the game to
repeatedly, you know, file lawsuits on 100 percent of these
projects.
Senator Lee. Right. It is all gain at that point because if
you file it, you will delay it. If you delay it, it may never
happen. It might disappear. And in the meantime, BLM comes out
and proposes this new rule, earlier this week, which would hike
royalty and rental rates, increase the bond and minimum bid
amounts, and then establish a new fee for expressions of
interest. And while these cost increases are garnering most of
the attention surrounding the rule, and rightly so, I am
concerned about the preference criteria in the rule, which
would give BLM even more discretion to direct oil and gas
leasing toward areas that ``do not have sensitive cultural,
wildlife, and recreation interests.''
This worries me because it is going to create yet more
discretion that will be used to discriminate even more at will
against states where the President knows he is not going to
lose many friends anyway because he does not have many, and
where there happens to be a whole lot of federal land. And that
description, that profile starts to look a lot like Utah and
Wyoming and a handful of other states. This is worrisome to me.
So how challenging will it be for producers, in light of this
rule, with high development potential, that the BLM does not
arbitrarily deem to have cultural, wildlife, or recreational
resources?
Mr. Obermueller. Senator, it is challenging, and I would
add one more to that list that I think is important--one of the
criteria that they are looking at, of course, is that the BLM
would define what has high potential for development--low
versus high potential. You know, in Utah, from the Uinta Basin,
and we know, of course, in Wyoming, every single acre at one
point was low potential until technology made it high
potential. So having the BLM be the arbiter of what has low and
high potential is not the path we want to go down.
Senator Lee. Thank you.
The Chairman. Thank you, Senator.
Senator Hickenlooper.
Senator Hickenlooper. Thank you, Mr. Chair. Thank you all
for being here. I appreciate your putting in the time and the
effort.
Let me start with Ms. Speakes-Backman. Your company is
building out a whole new energy generation that we are going to
rely on for decades, I assume. Right now, new projects, though,
are coming online. The new projects that are coming online face
long studies, incredible costs to connect, sometimes into the
hundreds of millions of dollars. Along with Representative
Scott Peters, we have been working on a forthcoming bill, the
BIG WIRES Act, which would require a minimum amount of
transmission between regions. How would something like the BIG
WIRES Act--that helps break that logjam--how would it add to
kind of facilitating wind, solar, gas, and storage projects
that are piling up in interconnection queues, and what would
that mean for reliability and affordability?
Ms. Speakes-Backman. Yes, well, first of all, thank you for
your work and your leadership on the BIG WIRES Act. We at
Invenergy are highly supportive of the bill, setting a minimum
criteria for import and export capacity. You know, transmission
helps accommodate new generation projects, which in turn help
to strengthen the grid. It is a symbiotic relationship, if you
will. An example of how transmission can really help to
accommodate a new generation project is in Texas--the CRES
program--where they constructed more than 2,000 miles of
transmission lines in addition to the 18,000 megawatts of clean
energy projects that they put together--new energy projects put
together for consumers, which lowered prices. It helped
reliability and resilience, and it is exactly the type of
measurable, and I would say metric-driven transmission build-
out, as well as new technologies to make existing transmission
more efficient, that is important to help spur more generation
on the clean energy side, especially.
Senator Hickenlooper. Exactly. Thank you.
Mr. Milito, although Colorado is not a coastal state today,
as a former geologist, I like to remind people that at one time
we had prime coastal real estate. We certainly recognize that
offshore resources like offshore wind are a big part of our
country's energy future. Right now, we are losing that race to
China. The statistics they gave to me was that China had
installed more offshore wind capacity in 2021 than the rest of
the world did in the previous five years. How can America
better tap into its rich offshore resources to continue to
diversify our energy mix?
Mr. Milito. Yes, thank you for the question.
One of the areas where we need increased certainty and
predictability is in the ability to get acreage through
leasing. Right now, there are some of the questions that were
raised earlier about the tie between oil and gas and between
offshore wind, so let's make sure we work together to create
schedules for leasing for both oil and gas and wind so that we
can continue to allow both to thrive. The Administration has
done a strong job of pushing forward with the construction
operation plan approvals for these projects that are coming
online--they are still in the water, and we are beginning to
see a lot of excitement around the prospects for continued
approvals and for continued construction of these projects.
I do think we do need to make sure we are keeping an eye on
some of the Inflation Reduction Act incentives to make sure
that they are being distributed and implemented in a way that,
you know, we take full advantage of the ability to provide
those incentives to this industry.
Senator Hickenlooper. Great. Thank you.
I will come back to Ms. Speakes-Backman. Recently, Senator
Thom Tillis and I filed a bipartisan amendment to the NDAA,
which would have had the Department of Defense investigate
risks to mission readiness if we had an inadequate ability to
move power between regions at home. So again, getting back to
that, you know, the sense of large-scale transition. What role
could that play in helping ensure power supply to critical
infrastructure like our military bases at home?
Ms. Speakes-Backman. Well, certainly, grid reliability
impacts all aspects of our economy, but especially our security
and our national security and defense. There was a statistic--I
would have to look that up--something along the lines of
6,000--let me make sure I have the right notes--it's something
along the lines of 6,000 outages in the last two years at
military facilities. And that is not acceptable. It does impact
our national readiness, and that means we need a more efficient
grid. We need more reliability, and we need measurable elements
of the planning system that help us to figure out what the
reliability and resilience levels need to be in order to
protect our country.
Senator Hickenlooper. Great. Thank you. And I guess I am
out of time, so I will yield back to the--I had, as an
exploration geologist, I had a couple good questions, but I
will put them in writing. Back to the Chair.
The Chairman. Senator Hoeven.
Senator Hoeven. Thank you, Mr. Chair.
Clearly, it's time to reform our broken federal permitting
process. Delays and uncertainty drive up the cost of projects
and opponents are exploiting a more and more complicated
permitting process to the extent that--so to the point where a
delay becomes defeat. And you have highlighted that very well.
U.S. consumers pay the price for this regulatory uncertainty,
particularly through higher energy costs. It affects everybody.
Increasing supply is key to lowering energy costs and attacking
inflation. And we need to empower our energy producers with a
clear, consistent, and timely, federal permitting process.
To that end, I have introduced three bills. One is the
Bureau of Land Management Mineral Spacing Act, which would
remove duplicative BLM permitting regs and better respect the
rights of private mineral owners. Also, the North American
Energy Act, which would prevent unnecessary delays for cross-
border pipeline and transmission line projects. And the
Promoting Interagency Coordination for Review of National Gas
Projects Act, which would streamline and set deadlines for
multi-agency NEPA reviews of natural gas pipelines and LNG
projects. And I appreciate our Ranking Member for including all
of these in the SPUR Act, which I am also co-sponsoring.
So Mr. Obermueller, for you, just starting with my BLM
Mineral Spacing Act, again, the basic concept, and this
Committee actually has passed the act through the Committee,
but it would remove duplicative application for permit-to-drill
requirements when the Federal Government owns no surface land
and a minority of the mineral interest, right? And so, I mean,
you know, you are the adjacent landowner, you own the minerals.
You are being held up. You are the mineral owner in that
parcel, right, or may share in it. You may be the landowner.
The BLM has no surface ownership, yet they sit and hold it up
with the federal requirements rather than allowing the state to
move forward.
Do you agree that removing this duplicative permitting
requirement in states with a split mineral estate would help
empower more energy development and enable BLM to better
utilize its resources, and, frankly, bring some fairness to
private owners who are disenfranchised unfairly by the Federal
Government?
Mr. Obermueller. Senator Hoeven, I really appreciate that
question, and I mentioned earlier about technology making
resources available that were not previously available.
Horizontal drilling techniques have resulted in an issue that
you just brought up that requires Congressional attention to
fix. And that is precisely what you talked about. Drill pads
and energy projects can be miles away from federal minerals,
and the Federal Government cannot own the surface at all in any
of it, and still from a minority of a nexus, dictate management
prescriptions on private and state land. That is a dramatic
expansion of the BLM`s authority beyond the lands that they
own. It is very critical to Wyoming and to North Dakota, I
know.
Senator Hoeven. And it is absolutely unfair. And then, I
mean, we have pads where you could have--they may be up to 24
wells--but 16 or more wells on a pad and they drill out three
or more miles in all directions underground, so there is no
surface interruption whatsoever. Those kinds of things can be
held up by the Federal Government in the kind of cases we are
talking about where they don't even own surface acres, right?
Mr. Obermueller. Absolutely can, and in terms of the
litigation discussion we have been having before, there are
litigators who are trying to force it the other way, to require
the Federal Government to actually have management
prescriptions and authority on private and state land----
Senator Hoeven. Which actually empowers the kind of
strategy you just talked about where they may take a section
and actually prevent a much larger project, even though they
only own a minority interest in a small part of it.
Mr. Obermueller. Precisely.
Senator Hoeven. And then, just recently--last week, BLM
issued proposed regulations that would further limit oil and
gas leasing and increase the cost of energy production on
federal lands. Your testimony raises concerns that this
proposal drives up the cost of energy production on federal
lands and is layered upon a lengthy and uncertain federal
permitting process already in place. Did the Administration's
policies toward federal energy production encourage or
discourage your members from increasing production, and at a
time when everybody is fighting inflation and energy is a big
part of that, won't this new regulation further hurt our
ability to produce energy in this country versus getting it
from other countries, who may be hostile to our interests and
have much worse environmental stewardship? And does that make
any sense whatsoever?
Mr. Obermueller. Senator Hoeven, I appreciate that
question. And I think you are referring to the new bonding rule
that they proposed last week. And what I would say is, it
absolutely does discourage, and in part because it's a one-
size-fits-all approach. In Wyoming, we basically have very
small companies. A third of Wyoming's oil production is
produced by 400 companies that individually produce less than
two percent of the total.
Proposals like the BLM's last week will hurt those
companies the most. Very expensive, and there is no opportunity
like we have in Wyoming to go into a regulated like I know they
do in North Dakota and work on a cost-based bonding system, not
a blanket bond where there is no room to talk about what it
costs to reclaim a well at any depth.
Senator Hoeven. Yes, and as you said, in many cases, these
are small businesses, right, that are the most impacted?
Mr. Obermueller. The impact of a lot of these regulations
is further consolidation to the biggest oil and gas operators.
Senator Hoeven. Thank you.
Thank you, Mr. Chair.
The Chairman. Thank you.
Senator King.
Senator King. Thank you, Mr. Chairman.
Ms. Speakes-Backman, I want to talk about permitting, and
we are talking about federal permitting and BLM and leasing and
all of that. But a lot of the issues in energy development are
local permitting, state permitting, and one of my observations
is that often you will have a project, such as the ones you
sponsor, that have a global benefit, but a local impact. The
strategy that--I don't know if you are aware--but prior to my
life here I was an energy developer in hydro, biomass, wind
power, conservation. We tried to provide a specific local
benefit to the people who bear the impact of the project. Talk
to me about that concept.
Ms. Speakes-Backman. Absolutely. As part of our early and
often strategy for local interaction and community engagement,
we very much look for not only how this project should be sited
or how this project should be built, but what are the needs of
the community either in conjunction with the objectives of the
project itself, or what do the communities need that are not
necessarily related to the energy project or the transmission
project that we are building.
And so we go through a very rigorous process of first
planning community engagement and then executing on that
community engagement.
Senator King. And part of that is, as you say, determining
what the community needs and if the project can meet those
needs. I think that is an important concept, because saying
this is going to benefit the earth doesn't help a resident of a
community that is going to see or experience the project.
I just want to emphasize something you talked with Senator
Cortez Masto about, and that is the lack of staff, and that is
throughout this process, whether it's at the state level, the
national level, and a lot of these delays, they are not people
who are sitting on their hands, they just--there is just too
much. And I take it--you are nodding--but the record won't show
you are nodding. I take it you agree?
Ms. Speakes-Backman. I agree 1,000 percent. I have had the
privilege to work with federal employees at the Department of
Energy in my past and I have never seen a harder working set of
folks to work toward the mission of the agency itself. And I
think that is across all of government. This is why one of the
primary issues for us or the priorities for us on when it comes
to permitting, is really making sure that these folks are well
staffed and consistently staffed.
Senator King. Particularly if you are going to shorten
deadlines.
Ms. Speakes-Backman. Absolutely. Or if we are going to
increase the scope. So as they have to do more work, we have
got to make sure that, on a steady basis, so they are not--the
few folks that are there in the office--are not spending time
training the new folks coming in, right? We need to keep a
consistent level of staffing.
Senator King. Let me change the subject slightly, and Mr.
Milito, you may want to comment on this. It has always bothered
me that in NEPA and other kinds of environmental analysis, you
are looking at the impact of the project, but there is no
analysis of the benefit, the environmental benefit of the
project. You can have a project with 100 units of environmental
benefit and eight units of detriment, but that is all the
focus. Do you think it would useful, important, and good policy
to have NEPA and the other environmental laws that assess
impact to assess the positive virtues of the project as against
any detriment?
Ms. Speakes-Backman. Absolutely. As a former state
regulator, as well, it is the net benefits that really are what
count, but you have to take a look at both sides of the ledger,
but the net benefits really are something that you need to take
a look at. It's not just what the impact is, but what are the
positive outputs?
Senator King. Mr. Milito, do you agree?
Mr. Milito. Oh, absolutely. There are so many factors that
should be considered in a decision like this--energy
affordability, national security, employment. We oftentimes----
Senator King. The world requires trade-offs, does it not?
Mr. Milito. Absolutely. You need to balance all the factors
and determine the best approach to moving forward with a
project based on the consideration of those factors.
Senator King. Mr. Obermueller, a question--we talked a lot
about litigation. One of the things that was in discussion last
year about these permitting reform proposals was shortening the
period of the statute of limitations on these actions. Do
litigants wait out the statute of limitations and then file at
the end, therefore extending the period even further? What is
your view on shortening the statute of limitations on appeals
of administrative action?
Mr. Obermueller. Senator, thank you for the question. I
certainly support shortening the statute of limitations--bring
that action closer to the final decision of the federal agency.
Senator King. So we aren't talking about keeping people out
of court, we are just saying you can't sit on your rights.
Mr. Obermueller. That is correct.
Senator King. And what about some provision to move these
cases to an accelerated docket in the court system?
Mr. Obermueller. Senator, any possibility of accelerating
these decisions would help with the predictability question I
talked about before, as would the ability to have these cases
heard in the places where the project actually takes place.
Senator King. So you are talking about geographic as well
as temporal?
Mr. Obermueller. That's right.
Senator King. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you.
Senator Hawley.
Senator Hawley. Thank you, Mr. Chairman. Thanks to the
witnesses for being here.
Ms. Speakes-Backman, if I could start with you. Your
company, Invenergy, is planning a high-voltage transmission
line across my state called the Grain Belt Express. You are
familiar with this, I'm sure.
Ms. Speakes-Backman. I am, sir.
Senator Hawley. As I understand it, this line, if built,
would carry electricity from western Kansas to Indiana. It
would cut across, right across the State of Missouri, 200 miles
from west to east, eight counties, and cover hundreds and
hundreds of farms. I understand you are also now proposing a
second transmission line called the Tiger Connector line, which
would run north and south from Monroe County down to Callaway
County. Farmers in my state have expressed a lot of concern
with the Grain Belt Express and the use--your company's use--of
eminent domain. So let me just give you a chance to say what
your response is to farmers and rural homeowners in my state
who don't want transmission lines running over their farms,
preventing them from planting crops, or having their land taken
from them for corporate use.
Ms. Speakes-Backman. Sir, thank you for the question. I
would say that community engagement is first and foremost in
our mind when we are developing any type of project. And in
addition, what we are thinking about is, what is the necessity
to make sure that lights stay on and that we can improve the
reliability and resilience of these communities, as well as
across these communities, from one to the other. And that is
why we find it very important that we look toward the larger
view of what is necessary in the communities, but then at the
state level, and what is in the national interest. And that is
why we are continuing to work with communities to make sure
that they understand what we are doing and that they give us
feedback as to how we should develop these projects
responsibly.
Senator Hawley. You say the lights stay on. Are lights
going to stay on in the State of Missouri from this project? My
understanding is, as originally planned, the transmission line
wouldn't benefit the residents of Missouri at all.
Ms. Speakes-Backman. Lights staying on across the entire
country. We are talking about----
Senator Hawley. You are taking Missourians' land.
Ms. Speakes-Backman. Sorry?
Senator Hawley. You are taking Missourians' land from them.
Ms. Speakes-Backman. We are working----
Senator Hawley. And you have gone to--your company has gone
to court and sued Missouri farmers to take away their land.
Now, this isn't speculative. I mean, you have actually used
this corporate power, which, frankly, I am not sure you should
have, to seize land from Missouri farmers that has been in
their families for generations.
Ms. Speakes-Backman. Well, sir, I would actually say that I
think about--we would have power that would go into communities
in Missouri. So I would just--I am happy----
Senator Hawley. That's the new Tiger Connector line. So
after it was pointed out that your original Grain Belt Express
did nothing for the State of Missouri, then you came back and
said, well, we will add something more. So what commitments are
you going to give the farmers and residents of Missouri today
that they will actually benefit from this land grab?
Ms. Speakes-Backman. Yes, sir. Since we, as Invenergy, have
taken over this project, we have done an inordinate amount of
community engagement. We will continue to do direct community
engagement. This project did not start with us, but we took it
on and we took it on with the objective to make sure that the
communities are well spoken to and well heard from in order to
make sure that----
Senator Hawley. What are they going to get? Are Missouri
farmers and residents, are they going to get lower energy
prices out of this? What--how are they going to benefit? You
are putting a huge transmission line across 200 miles of land
in the State of Missouri. You have gone to court to seize the
land from Missouri farmers. You are a private corporation,
aren't you?
Ms. Speakes-Backman. Yes, we are, sir.
Senator Hawley. How much money are you making on this?
Ms. Speakes-Backman. I would have to get back to you on
that----
Senator Hawley. Would you?
I'm really curious because, you know, you have got Missouri
farmers who, in many cases, these are small family farms. These
are not massive corporate farmers. This land has been in their
family for generations. They just want to be left alone and be
able to farm and you are a major corporation who is coming in
here and taking them to court, literally, to take their land.
And then the benefit that they get from it is nothing. Nothing
for the State of Missouri. And you talk about the national
good. So your message to them is--give us, a big, rich
corporation, your land, or we will take it from you and you
should just live with it.
Ms. Speakes-Backman. Sir, I am sure that's not the message
that we are trying to----
Senator Hawley. That's what they are hearing.
Ms. Speakes-Backman. And I would say that since we did take
it, since Invenergy took over this project, we have changed the
direction of the project. We have changed the path of the
project to suit the communities' needs and the communities'
demand.
Senator Hawley. So will you pledge not to exercise eminent
domain in the State of Missouri?
Ms. Speakes-Backman. I am not authorized to----
Senator Hawley. That's a no?
Ms. Speakes-Backman. I am not authorized to make that
commitment, but I will certainly get back to you.
Senator Hawley. You know, that, I think, would be the
kind--if you want to talk about rebuilding trust here--I think
if you as a corporation would say ``you know what, we are not
going to take your land from you.'' You talk about outreach to
the community and benefits to the community, why don't we start
with ``we won't take your property?''
Again, I'm not--it's not clear to me why you, as a
corporation, should have the power to seize their property. I
don't think you should. That, apparently, that decision has
been made and I guess you do. But I would just say, if you want
to rebuild some trust, number one, why don't you show something
for the State of Missouri for the residents there that you are
going to do for them, and number two, why don't you pledge to
them that you won't take them to court to take away their land
so that they can continue to farm and raise their families and
have their livelihood? I am sure you will still find a way to
make lots of money.
Thank you, Mr. Chairman.
The Chairman. Thank you.
Well, let me thank all of you for your time and effort
today to be here and sharing your knowledge with us. We
appreciate it very much. And I think we all know it's a
passionate plea, but the bottom line is we need dependable,
affordable, reliable energy, and we can do it cleaner and
better than anywhere in the world. And I appreciate it so much.
So the members are going to have until the close of
business tomorrow to submit additional questions for the
record.
The Committee stands adjourned.
[Whereupon, at 12:00 p.m., the Committee was adjourned.]
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