FERC Pipelines

FERC Should Reconsider Staff Delegation for Key Orders

September 4, 2018

The Federal Energy Regulatory Commission (FERC) last week lifted its order halting work on the controversial Mountain Valley Pipeline located in Virginia and West Virginia.

Wait. That’s wrong. Let’s try that again.

FERC staff, relying on its delegation authority, lifted a FERC staff order halting construction on Mountain Valley. The FERC commissioners did not vote on either the decision to stop or to restart construction.

Why? Because of delegation authority.

What is delegation authority?

Under longstanding federal regulations, the FERC commissioners delegate numerous activities, ranging from scheduling hearings to reviewing limited types of uncontested applications for energy infrastructure, to FERC staff. This makes sense. Just like any well-functioning business, the FERC commissioners must be able to rely on staff to bolster FERC’s efficiency.

At times, delegation has been critical to FERC’s ability to function. For example, between February and August 2017, FERC lacked the minimum number of commissioners—three—required for the commission to vote on anything. Left without a quorum, FERC risked being essentially shut down while it awaited congressional approval of FERC nominees. To handle this emergency, in one of the commission’s last acts before losing quorum, it temporarily delegated additional authority to staff; this authority expired once a quorum was restored.

Like the well-functioning business described earlier, the commissioners must maintain proper oversight of FERC staff activities. The more controversial the decision, the greater the impact, the better the argument that the final decision should rest with the commissioners—aided by consultation with staff. Delegation should not be used to allow the commission to avoid review or to avoid potential split-votes among the commissioners.

Here’s where the debate about the Mountain Valley decision comes in.

Delegation and Mountain Valley Pipeline

Mountain Valley Pipeline has long been controversial; FERC approved the pipeline in a 2-1 split-decision and the project is subject to several court challenges. On July 27, a federal appeals court vacated easements and permits issued by the U.S. Bureau of Land Management (BLM) and the U.S. Forest Service that allowed Mountain Valley to cross national forests and the Appalachian Trail. The court concluded that the agencies’ reviews of potential alternative routes were legally deficient and sent them back to the agencies for further action.

Although the decision only related to federal lands, on August 3, FERC staff issued an order stopping construction on the entire project. FERC staff rationalized that given the potential for the pipeline to be rerouted, it was risky to allow further construction.

FERC staff relied on a federal regulation that states that they may “take whatever steps are necessary to ensure the protection of all environmental resources during the construction or operation of natural gas facilities, including authority to design and implement additional or alternative measures and stop work authority.”

In response to the court order, BLM conducted additional analyses of alternative routes for the pipeline. BLM concluded that it would be impractical to select any alternative route. The court hasn’t ruled on whether these supplemental analyses satisfactorily address the deficiencies outlined in the July 27 order. To be clear, neither BLM nor FERC gets to decide whether BLM’s proposal satisfies the law—that decision rests only with the court.

However, on August 29 and citing the same regulation as before, FERC staff lifted the stop work order. Specifically, Office of Energy Projects Director Terry Turpin wrote that he and his staff had determined that the environment would be most protected by completing construction “as quickly as possible” to help eliminate erosion risk.

Critically, Turpin wrote that based on BLM’s analysis, “the specific route of the Project no longer seems in question.” Essentially, Turpin concluded that BLM had satisfied the court order, a conclusion that seemed to influence his decision to allow construction to resume.

In response, FERC Commissioners Cheryl LaFleur and Richard Glick issued a joint statement arguing that FERC should no longer delegate to staff decisions that are issued in response to a court order.

The buck must stop with the commissioners

By its very nature, delegation authority transfers power that is vested with the commissioners to staff members, whose names are not always publicly known and who didn’t go through Senate confirmation. It fundamentally lessens transparency.

That’s why LaFleur and Glick recommended that “in the future, when a court remands or vacates a required federal authorization following the issuance of a notice to proceed, we believe the decision regarding whether and how to proceed with the pipeline should be made by the Commission rather than its staff.”

Both Commissioner Neil Chatterjee and Chairman Kevin McIntyre responded to LaFleur and Glick on Twitter. McIntyre expressed confidence that BLM will satisfactorily address any remaining issues and that it would be “environmentally irresponsible” to delay post-construction restoration activities. Chatterjee wrote that it was appropriate for the commission to “rely on @FERC career staff’s thoughtful, expert judgment.”

McIntyre and Chatterjee are correct that the views and recommendations of FERC staff are informative. But particularly where certain high-level FERC staffers are speaking in increasingly political terms and public trust in the agency is waning, it is critical that the ultimate decision on orders such as these come from the commission. That would send the message that FERC understands the breadth of the project’s impacts on landowners and the environment and the seriousness of a court order vacating required federal permits.

When directly responding to court orders, the commissioners should take back the reins. After all, as noted by LaFleur and Glick, “ultimately, it is the Commission’s responsibility to ensure the project is in the public interest.”

Image credit: USDA; Appalachian Trail