Does the US Government Actually Regulate Pipelines?

Part of the Series

Planet or Profit

While global leaders meet in Paris at the COP21 climate talks in an effort to rein in global greenhouse gas emissions, the fossil fuel industry continues with business as usual. In far west Texas, that means a proposal for a controversial high-pressure natural gas transmission pipeline in a state that already boasts 431,997 miles of pipelines – enough to stretch to the moon and most of the way back to earth.

The additional 143-mile-long, 42-inch-diameter Trans-Pecos pipeline will be built right through the heart of Texas’ starkly beautiful and remote Chihuahuan Desert, as Truthout previously reported. The aim of the pipeline is purportedly to deliver natural gas from Texas to Mexico, where it is, in theory, in high demand.

Plans are currently in the works for the pipeline, which would be larger in diameter than the infamous Keystone XL pipeline. Construction supplies are stockpiled, and in some areas, trenches for the pipeline have already been dug.

However, those in opposition to the pipeline say the Federal Energy Regulatory Commission (FERC) is not complying with the National Environmental Policy Act in relation to pipeline construction. Advocates also assert that FERC is not giving thorough consideration to the prospect of not allowing the pipeline to be constructed – particularly in the fragile ecosystem where it is currently proposed.

According to FERC, it is “an independent agency that regulates the interstate transmission of electricity, natural gas, and oil” as well as reviews “proposals to build … interstate natural gas pipelines.”

But FERC has a reputation of effectively rubber-stamping every pipeline that comes its way, and that reputation is well earned, given that it has, technically, never disallowed a pipeline. As Truthout previously reported, FERC has come under wide-scale scrutiny for backing projects that have caused environmental destruction, human injury and even death.

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The FERC “process [is] designed to produce a ‘yes’ in the end,” Excelerate Energy CEO Rob Bryngelson said at the World Liquefied Natural Gas Series Americas Summit in San Antonio, Texas, in June 2014. “You may have to tweak your project … [but] it’s designed to get a ‘yes.'”

This is exactly what Coyne Gibson, who had a long career in the oil and gas industry as an electrical and control systems engineer but who opposes the current pipeline project, is concerned about.

“We need to request that FERC comply with the National Environmental Policy Act,” Gibson told a group of concerned residents at a presentation in Alpine, Texas, on November 22. “As part of this, they must consider alternatives.”

And as pipelines continue to be constructed across the United States, Gibson is far from alone in his concern that the commission tasked with regulating the companies building pipelines could be falling down on the job.

Pushing for Compliance

FERC’s admitted responsibilities include regulating “the transmission and sale of natural gas for resale in interstate commerce,” approving the siting “of interstate natural gas pipelines and storage facilities,” enforcing its regulatory requirements and overseeing “environmental matters related to natural gas and hydroelectricity projects and other matters.”

But examples abound in which FERC neglected to perform these duties.

In August 2014, the Tennessee Gas Pipeline, a project of energy giant Kinder Morgan, was being pushed forward by several governors in New England who wanted it constructed between Boston and New York.

Despite the project having total support from the governors of the states where it would be located, public outcry and resistance over emissions, along with concern that the pipeline was 15 times larger than its original plan, which raised suspicions that most of the gas was intended to be sold overseas, stopped the project.

Nevertheless, FERC was in the process of approving the project. Another example occurred in July when it granted authorization to Excelerate Energy to construct and operate the Aguirre Offshore GasPort project located offshore from Puerto Rico.

Environmentally, there is much at stake with the Trans-Pecos project, given that the pipeline will transport gas from a plant in Coyanosa, near Fort Stockton, Texas, down to the border of Mexico, and the line is supposed to be built underneath the Rio Grande River in order to connect into Mexico’s gas infrastructure.

“I’ve seen firsthand what this [pipeline] does to the places it touches,” Gibson told Truthout. “It is horrifically environmentally impactful. The immediate impact is the absolute environmental destruction of every living thing in its path. And that’s just to get started.”

It is accounts like this, coupled with what many people perceive as an arrogant and bellicose attitude on the part of Energy Transfer Partners (ETP), the Dallas-based company behind the project, that has created a battle for the future of the land in far west Texas.

Alyce Santoro, a local artist, told Truthout of an example of cavalier behavior from an ETP representative at a meeting last spring in Alpine.

After asking the company representative what the blast radius of a pipeline explosion would be, she told Truthout, “The rep said he didn’t know what that meant. I was directed to another representative who told me that the dangers were practically nil. He tried to discount my question by saying, ‘You know airplanes crash, right? Yet you still fly on them.'”

Having worked for the Houston division of Fluor Engineering as an electrical and control systems engineer, Gibson’s experience in the oil and gas industry included a variety of petrochemical infrastructure projects, including systems associated with oil, natural gas and natural gas liquids.

“It’s likely there will be an explosion – not if, but when,” Gibson stated flatly. “At a random place along the line, the risk, let’s say, is X. At a compressor station, the risk is 10X, or greater, because it has people working on it, rotating machinery, electrical systems and vehicular traffic; concomitant risk is there. And when something goes wrong, it tends to be catastrophic.”

Engineer Coyne Gibson, in a public information meeting about FERC’s role in the Trans-Pecos pipeline, in Alpine, Texas, November 2015. (Photo: Dahr Jamail)

According to Gibson, there appear to be several substantive problems with the project that FERC must address.

One of them is that the project is “impermissibly segmented,” which is a means by which companies break projects into smaller isolated pieces in order to gerrymander their proposals to make each individual increment small enough to look insignificant as far as safety and environmental impacts. It is a tactic used widely by the oil and gas industry.

However, in order to follow the law, FERC must comply with the National Environmental Policy Act (NEPA) and consider the project as a whole. Gibson sees this as a major flaw with the proposed project, given that by doing so FERC would allow the project to skirt environmental review required by both NEPA and the US Environmental Protection Agency.

Another issue is that the project’s permit application lacks an alternative analysis, which is also required by law. Alternative analysis includes the company proposing alternative routes for the pipeline.

“This is including but not limited to the ‘no action’ decision, and alternative routes, required for NEPA compliance,” Gibson told Truthout.

Having decades of experience in the oil and gas industry, Coyne Gibson generated alternative pipeline routes for the Trans-Pecos project. (Graphic: Coyne Gibson)

The company may also be misrepresenting the ways in which its activities would benefit (or not benefit) towns in the region. Gibson submitted a Freedom of Information Act request to FERC about the possibility of ETP supplying natural gas to the far west Texas town of Presidio, which the company has allowed people to believe will happen, but has not placed anything in writing to guarantee it. FERC responded with the information, but then retracted it eight hours later at the request of ETP; the company claimed the information’s release would harm it economically.

In pursuing the truth about the pipeline, Gibson’s aim is simply to have FERC do its job and enforce the law. In the case of the Trans-Pecos project, this means that FERC must accept the fact that the 1,093-foot section of pipeline that will cross the border is part of the broader project and does not function in isolation, which is what both ETP and FERC would currently have the public believe. That would mean assuming that a small section of the pipeline, which is connected to the broader pipeline, is separate from it, and would allow ETP and FERC to avoid providing an environmental impact statement for the pipeline’s entirety.

“This would mean that the remaining connected pipelines are of no significance,” Gibson said.

The Big Bend Conservation Alliance, a group that opposes the project, has pointed out that the system of new proposed pipelines that the Trans-Pecos is part of would export 34 billion standard cubic feet of gas per day to Mexico. If all of the new power plants associated with this project were operating 24 hours a day, seven days a week, they would still only be able to burn about one-tenth of this volume of gas. Hence, as with the aforementioned Tennessee Gas Pipeline project, many suspect the majority of the gas will be exported overseas where it will fetch a much higher price.

Gibson also pointed out that FERC, in order to comply with NEPA, is required by law to consider alternatives for the project, including the possibility of a “no action decision,” which would mean not constructing the pipeline at all.

The option of foregoing the pipeline’s construction altogether is worthy of serious consideration, according to Gibson. He sees the US “bearing the brunt of the environmental costs of extracting the gas through hydraulic fracturing, including depletion and contamination of groundwater supplies, air pollution etc.,” he said during his public presentation.

Other issues he brought to light included the fact that the US currently flares off, literally burning it off into the atmosphere, approximately 12 percent of all the gas extracted, and also, since the US is currently a net importer of gas, gas exports would drive up the domestic price of energy. Given that one of FERC’s stated responsibilities is to monitor energy markets, these issues appear to be yet more examples of how FERC is not doing its job.

FERC Responds

Truthout asked FERC several questions regarding the Trans-Pecos project, beginning with how it is possible that the 1,093-foot section of the pipeline that crosses the border functions in isolation from the rest of the pipeline and is not a case of “impermissible segmentation.”

Tamara Young-Allen with FERC’s Division of Media Relations said FERC had issued a notice of intent to prepare an environmental assessment for the border-crossing portion of the project and had requested public comment on it.

She added that the border-crossing project “[does] not fall under the jurisdiction of FERC,” and “This would include Trans-Pecos’ intrastate pipeline facilities, consisting of 143 miles of new 42-inch-diameter pipeline, multiple receipt and delivery metering stations, and other auxiliary facilities extending from Pecos County, Texas and terminating at the proposed FERC-jurisdictional project facilities in Presidio County.”

Young-Allen said these intrastate facilities “would be subject to the jurisdiction of the Texas Railroad Commission and would be non-jurisdictional to FERC. In the EA, we will provide available descriptions of the non-jurisdictional facilities and include them under our analysis of cumulative impacts.”

But Gibson took issue with some of FERC’s points.

“The FERC expressed in several issuances, including those to Congressman Will Hurd, [State] Sen. Jose Rodriguez, and in the EA scoping notice, that the cumulative impact of the non-jurisdictional segment would be included in the EA,” he told Truthout. “Initially, almost no (insufficient) description of the non-jurisdictional segment was provided – no maps, no locations of surface facilities, no detail of any kind.”

Additionally, FERC was challenged in the motions to intervene on this matter, as well as in the environmental assessment scoping comment period. And in FERC’s issuance to Trans-Pecos pipeline, one of the items requiring a response was a complete description of the non-jurisdictional segment, which contradicts FERC’s response.

Hence, while FERC may well have sufficient information for conducting a cumulative impacts analysis on the border-crossing segment of the pipeline, Gibson takes issue with the fact that the public is now in a position where it must “trust” FERC “first, that they have sufficient information to do a complete, cumulative impacts analysis, and second, that in fact they will conduct said analysis according to the applicable law (CEQ guidelines and NEPA requirements).”

Truthout asked if FERC was considering alternative alignments for the pipeline, or even the “no-action” alternative.

“FERC is obligated to comply with NEPA and does so each time it conducts its environmental analyses of all interstate natural gas infrastructure projects within its jurisdiction,” Young-Allen responded. “The environmental documents that staff is currently preparing for each of these projects will consider all alternatives, including ‘no-action’ or ‘alternative alignments.'”

As of July 23, FERC announced its intention to prepare an environmental assessment for the project, and according to Young-Allen, if FERC cannot make a “finding of no significant impact on the human environment” then they will recommend the preparation of an environmental impact statement for the Presidio Border Crossing Project and things will move forward.

“The Commission,” she concluded, “will render a decision after the EA is completed and the Commission reviews the entire record, including recommendations in the EA. Its order on the project will also address all concerns raised in public comments.”

Gibson refuted some of these points, however.

“The EA must combine human environment and natural environmental impacts, as ‘EA’ is a shorthand, umbrella term that encompasses all environmental, cultural and socioeconomic impacts, both contemporaneous and cumulative (foreseeable),” he said.

Gibson and others working in opposition to the pipeline project have “documented, completely, thoroughly and substantively, on the record, the environmental, cultural and socioeconomic impacts, both contemporaneous and cumulative,” he said. “That is unequivocal. A Finding of No Significant Impact (FONSI) is possible, but inconceivable, as it would by definition completely ignore the record.”

Fox Guarding the Henhouse?

As we’ve seen for many pipeline companies, having relevant government officials on your side certainly helps in securing FERC approval.

And it might be challenging to find a state that does more on this front than Texas. Regardless of what FERC does or does not do regarding regulating construction of the Trans-Pecos project, the State of Texas is already greasing the wheels, so to speak.

ETP, which now boasts former Texas Gov. Rick Perry on its board of directors, along with Carlos Slim of Mexico, who is reportedly the second-richest person on earth, are the core partners behind the Trans-Pecos pipeline project.

Texas billionaire Kelcy Warren, the head of ETP, is one of the prime movers behind the Trans-Pecos pipeline project. On November 18, Texas Gov. Greg Abbott appointed Warren to a seat on the Texas Parks and Wildlife Commission through January 2021. Warren’s wife, Amy Warren, a former executive assistant at his company, was also appointed to Humanities Texas, another state board seat.

Warren has a history of close ties to the seat of power in Texas. Perry received $250,000 from Warren in 2011 via a super PAC for his unsuccessful presidential bid.

Warren has also come under the scrutiny of the campaign-finance watchdog group Texans for Public Justice, which has said ETP executives like Warren, along with his company’s PAC, have given more than $223,000 in campaign donations to the three Republicans who now sit on the Texas Railroad Commission, which rules on eminent domain requests from pipeline companies.

In 2014, according to the Texas Ethics Commission, Warren gave more than $500,000 in cash along with having paid $1,300 for event expenses to Gov. Abbott during his gubernatorial campaign against Democrat Wendy Davis. Before Abbott became governor of Texas, Warren also donated a total of $30,000 to his re-election campaigns for state attorney general in both 2006 and 2010.

Andrew Wheat, research director of Texans for Public Justice, believes Warren and ETP aim to remain on good terms with state leaders in Texas, particularly those within the Texas Railroad Commission, which theoretically regulates pipelines in the state. (In reality, the commission approves most pipeline-company requests to condemn privately owned land to be used as pipeline easements.)

“Since 2010, Energy Transfer Partners executives and the company’s PAC have given more than $223,000 to the campaigns of the commission’s three GOP members,” The Dallas Morning News reported.

Pressuring FERC

What’s next for the Trans-Pecos pipeline project and FERC’s actions on it (or lack thereof)?

In early 2015, FERC is expected to publish the results of its environmental assessment of the project, and will then address 615 individual public comments that have been filed about it. FERC will also address four motions to intervene.

According to Gibson, we can anticipate three possible outcomes.

FERC could find “no significant impact” from the project, which means the plan would move forward unencumbered. Alternately, the environmental assessment could only focus on the small segment of the pipeline that crosses the border and ignore the rest of the project, which would likely end up giving ETP the rubber stamp it hopes to acquire from FERC in order to carry forward with construction. In the last, and probably most unlikely, scenario, FERC would require a full environmental impact statement for the entire project, which would dramatically slow it down and possibly stop it.

During his presentation in Alpine, Gibson suggested that the audience, who were all opposed to the pipeline project, submit comments to FERC, who must compel ETP to, as he stated, “disclose and discuss all of the alternative alignments that were considered. The applicants [pipeline companies] must make this information available to both FERC and to the public for evaluation and comment in order to comply with NEPA.”

Given FERC has never officially declined permitting a gas pipeline project, a new and surprising precedent would be set if ETP were forbidden to move forward with its aims in far west Texas.

Despite the low odds of that happening, Gibson remains undeterred.

“It’s never happened, but I think eventually FERC will be forced to decline one of these pipeline projects,” he said. “So, this may as well be the first.”