The appointment of U.S. Department of Energy staffer Bernard McNamee to the Federal Energy Regulatory Commission would give natural gas pipeline companies a more certain path through the commission's permit application process, but his road to confirmation in the U.S. Senate could be bumpy, energy industry analysts said.
The White House announced Oct. 3 that it intends to nominate McNamee to fill the fifth seat vacated by Republican Robert Powelson, who left FERC after serving at the agency for only a year. Compared to Powelson, McNamee would likely be a stronger supporter of the Trump administration's effort to help coal-fired and nuclear power plants remain economically viable in competitive power markets.
McNamee signing his name to a DOE proposal to make grid operators cover the costs of power plants that store at least 90 days of fuel on-site (i.e, certain coal-fired and nuclear power plants), which FERC rejected in January, could complicate McNamee's confirmation timeline, according to Height Capital Markets energy industry analysts.
"We expect ... a tough Senate confirmation process that will likely take the remainder of the year," they wrote in an Oct. 4 note to clients. "While announcing the bailout scheme before the midterms may be politically appealing to Trump in the short-term, we think introducing the new rule before McNamee is situated at FERC could raise the stakes on his Senate confirmation, given the widespread opposition to the proposal."
Opposition to the DOE proposal united many parties outside of the nuclear and coal industries, including a broad coalition composed of the oil and gas industry, renewable energy sectors and electric power organizations.
If McNamee is confirmed by the U.S. Senate, FERC would again have a full slate of commissioners, erasing the potential, unless one of the members has to recuse themselves, for votes to split between two Republicans and two Democrats. Former Commissioner Tony Clark, a Republican, said removing this possibility would reinstate more certainty in the natural gas sector.
"Of all the industries FERC regulates, the challenge of an even-numbered commission has been most pronounced in the natural gas space, given the recent trend of 2-2 split votes in relation to gas pipeline infrastructure," Clark said.
A restored Republican majority on the commission would benefit the gas industry by holding the power to overrule Democrats' concerns about the way the commission evaluates greenhouse gas emissions, other environmental impacts and the public need for gas infrastructure projects. Commissioners Cheryl LaFleur and Richard Glick, the two Democrats, have dissented on several orders involving Natural Gas Act certificates for pipeline projects.
"A restored majority would likely allow [Republican Chairman Kevin McIntyre] and [Republican Commissioner Neil Chatterjee] to maintain the commission's current position that downstream [greenhouse gas emissions] reviews are often too speculative to be useful in a [National Environmental Policy Act] analysis," ClearView Energy Partners Managing Director Christi Tezak said.
The Interstate Natural Gas Association of America, which has petitioned the White House and the Senate to fill the open seat, said it was pleased by the Oct. 3 announcement and hoped McNamee's confirmation process "proceeds smoothly."
Environmental groups including Sierra Club and Natural Resources Defense Council objected to the White House pick, pointing to McNamee's support of coal and other fossil fuels.