January 26, 2016, 08:00 am

Time for FERC to pipe down

By Maya K. van Rossum

This month, more than 165 organizations and 2000 concerned people from across America sent a letter to Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) asking for justice. Not justice for any one individual – justice for the country and the environment. As key members of the Senate Committee on Energy and Natural Resources, Sanders and Warren have the ear of the Government Accountability Office and the power to successfully call for an investigation into what has become a rogue federal agency: the Federal Energy Regulatory Commission (FERC).

Does “rogue” sound harsh? Well, FERC’s actions are harsher. The agency is supposed to regulate pipeline companies, but recent history shows it is behaving more like an advocate acting on their behalf, helping to grease the wheels for the pipeline companies regardless of the value of their projects or the harms they inflict on communities and the environment. Of all of the agencies in the entire federal government, FERC has the highest approval rate for the projects submitted to it for approval: 100 percent. That’s right, since 1986 FERC has green-lighted every single proposal the pipeline industry sent its way and up to its Commissioners. That’s not a regulatory agency, that’s a rubber stamp.


FERC’s approval rate should not come as a surprise. Unlike any other federal agency, FERC is funded entirely by the industries it regulates — that’s right, FERC gets its entire budget from the industry it is supposed to oversee. No other independent federal agency has a similar funding structure.
How does it work? Basically, FERC issues charges on the industry it regulates calculated to cover all of its costs, including an agency budget that has grown 50 percent, from $200 million to $300 million, in just a 10-year period from 2004 to 2014. This means that the more pipelines, gas delivery, and LNG facilities FERC approves the more fees it is able to collect to support its fast ballooning budget.

This industry-financing mechanism not only encourages a biased approval process for proposed projects, but it also provides FERC with a significant degree of insulation from Congress and the legislative branch of government that no other independent federal agency enjoys.

It gets worse. FERC has never in its history issued a civil penalty for violations related to construction activity for any pipeline project. And yet we know for a fact that violations of FERC-issued pipeline construction approvals border on routine. For example, the Tennessee Gas Pipe Line Company’s 300 Line Upgrade Project was found to have major failures ranging from improperly installed erosion controls that impacted resources to disturbances resulting from stormwater discharges. Who recorded these failures? FERC. And what were the penalties the company incurred from FERC? None. FERC didn’t even issue a stop-work order to make sure the company fixed the problems it was causing before allowing it to continue with its damaging construction.
Once a pipeline project receives FERC approval, the problems are compounded. The pipeline company receives the power of ‘eminent domain,’ the right to take private property for its own use.  In addition, pipeline projects are exempted from the state and local environmental and community protection laws that apply to every other industry.

What this means is that projects like Kinder Morgan’s Northeast Energy Direct (NED) pipeline can force homeowners, families and businesses in Massachusetts, New Hampshire, and beyond to relinquish  part of their property to allow for the construction and operation of this 400-plus-mile pipeline. Despite opposition and concerns voiced by so many, including Sens. Sanders, Kelly Ayotte (R-N.H.), Jeanne Shaheen (D-N.H.) and Reps. Ann McLane Kuster (D-N.H.) and Frank Guinta (R-N.H.), the project proceeds towards approval.  Despite Kinder Morgan submitting an application to FERC that it admitted was missing critical information, FERC marked the application as “complete” because use the company promised to provide the information eventually.

Among the problems with the NED pipeline, as with so many others like it, is that FERC fails to force the company to address the need for the gas the pipeline will carry – the agency simply requires the company to consider different paths to cut for its project, rather than answering the threshold question of whether the project is necessary.  In fact, the findings of the Massachusetts Attorney General that no new natural gas pipelines are needed to supply the Commonwealth is apparently being ignored in the NED FERC review process.  Similarly, expert analysis documents that the gas to be carried through the PennEast Pipeline from the shale fields of Pennsylvania to (the company claims) communities in New Jersey is not needed in Pennsylvania, where there is a gas glut, and would create a 53 percent surplus in New Jersey. FERC officials don’t seem to care.

What can be done about all of this? Well, fortunately there is an agency in the government that can reveal the depth of this toxic mess and help us identify solutions: the Government Accountability Office (GAO). As the investigative arm of Congress charged with auditing the federal government, the GAO can examine the way FERC is working—or rather, the way it is not working. An objective GAO review is clearly needed because neither Congress nor the president has the authority necessary to hold FERC accountable for their abuses of the public trust. A thorough and objective review is clearly warranted, and can only be brought to bear by the GAO, which can initiate a dialogue with FERC and bring about the reforms the agency so desperately needs. That’s why more than 165 organizations, from environmental nonprofits to religious groups, have stood up and asked for a review. The future and well-being of our communities and environment depends on it.
Van Rossum is the Delaware Riverkeeper and leads the Delaware Riverke