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Pipelines face little threat to restoring FERC's Republican lean in midterms


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Pipelines face little threat to restoring FERC's Republican lean in midterms

The U.S. natural gas pipeline industry's biggest political priority in the next few months is to break the partisan deadlock on the Federal Energy Regulatory Commission with a restored Republican majority, minimizing the possibility of a disruption in the usual business of processing project applications, and this effort will likely not be affected by midterm elections in November.

Bernard McNamee, a U.S. Department of Energy official picked by President Donald Trump to fill the empty seat at FERC, could be in for a rough ride through the Senate. But observers expect him to become the fifth commissioner and give Republicans a 3-2 advantage over their Democratic colleagues on any of the usual divisive issues, such as how to measure the climate impacts of natural gas infrastructure.

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"I expect the nominee to be confirmed," Martin Edwards, vice president of legislative affairs for the Interstate Natural Gas Association of America, said in an interview. "It may be a few months, but I expect him to be confirmed."

Rob Rains, an energy industry specialist at the research firm Washington Analysis LLC, said the Senate might try to move McNamee at the same time it votes on what would be an unusual third term for Democratic FERC Commissioner Cheryl LaFleur, or on a new Democratic commissioner if LaFleur opts out. LaFleur's term expires June 30, 2019.

The politicization at FERC will continue for a bit, Rains said. Democrats have withheld their vote on Natural Gas Act certificate orders in situations where they feel the commission should go further in its analysis of factors such as greenhouse gas emissions, other environmental effects and public need. "But the mission of the commission is still steel in the ground," Rains said.

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The Senate scheduled a hearing for McNamee, but it was canceled as Congress went on recess to prepare for the Nov. 6 midterm elections. Polls have suggested that Democrats are likely to win enough seats to take control of the House of Representatives but that Republicans are likely hold on to control of the Senate.

In the event that Democrats take over the Senate, the confirmation of a Republican FERC commissioner and conservative judges would face more trouble. Ian Bowles, a former Clinton White House staffer and the managing director of the clean-energy-focused WindSail Capital Group, said this would be the biggest impact of a Democratic victory in the Senate. Bowles was speaking on an elections call sponsored by Raymond James Inc. on Oct. 16.

A Congress divided between a Republican Senate and a Democratic House would have implications for legislation, but the pipeline industry is not in desperate need of any of the bills that have been proposed. "I don't see a big change effectively in where Congress votes on major issues," said Edwards, who began his career as a staffer on Capitol Hill.

A split on the Hill "leads to a Congress that legislates less, and therefore administration action is more important," he said.

In a preview of the midterms, ClearView Energy Partners LLC said that if Democrats take over the House, critics of the Trump administration will be sure to use hearings to condemn the direction of regulatory reform at the White House Council on Environmental Quality, the U.S. Environmental Protection Agency and FERC.

Rains called it a "steady-as-she-goes situation" in Washington. Like Edwards, he pointed to possible action by the Trump administration. Energy Secretary Rick Perry and other officials have expressed interest in reining in state efforts to assert control over pipeline permits, especially for projects already approved by FERC.

At the state level, the pipeline industry views state involvement in project permitting as already at its peak, so gubernatorial elections therefore would have little effect. States like Virginia and West Virginia have joined New York in looking more closely at pipeline projects that need Clean Water Act permits issued by state agencies for stream crossings and runoff.

Two environmental groups were contacted for this article. One declined to speculate on the elections' potential effects on its involvement in the pipeline permitting process, and one did not respond by press time.