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The Federal Agency Behind the Gross Expansion of Fracking Pipelines

The Federal Energy Regulatory Commission calls itself an independent agency, but anti-fracking activists say it is anything but.

The Federal Energy Regulatory Commission (FERC), a national agency with wide jurisdiction over gas industry projects, used to be one of those unseen government organizations that go quietly about their business, creating no headlines and flying under the public radar. But mounting citizen alarm about the high-volume hydraulic fracturing industry has changed all that, and FERC’s opponents have publicly accused the agency of being a spearhead for fossil fuel corporate domination of the United States and its resources.

Early opposition to shale drilling was restricted to protests against what is commonly called fracking – blasting chemical-laden water into subterranean rock to fracture it, forcing it to yield the methane (natural gas) it contains. But for the past several years there has been increased opposition to the major, ever-expanding fracking infrastructures over which FERC has jurisdiction – pipelines and the compressor stations that pack down fracked gas for its pipeline journeys.

FERC was founded in 1977 as an independent agency, its status updated nearly 11 years ago by the 2005 Bush-Cheney Energy Act to include jurisdiction over interstate electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing and oil pipeline rates. FERC also reviews and authorizes liquefied natural gas terminals, interstate natural gas pipelines and non-federal hydropower projects.

Only one gas pipeline has been outright rejected by FERC in the past 10 years.

While FERC’s own mission statement describes it as “an independent agency,” it approves most of the projects that come to its door. In December 2012, after a 3-2 vote to license a major East Coast pipeline, the majority explained why so many corporations get its thumbs up: “Given the significant expense sponsors incur to prepare applications, there is no incentive for a project sponsor to present an application that cannot meet our standards for approval … the high approval rate for pipeline proposals demonstrates prudence on the part of the industry and consistency on the part of the Commission….” [our emphasis]. Translation: money talks.

The 2012 statement was reconfirmed when an audience member at a July 2015 FERC “scoping” meeting asked a FERC representative how many pipeline applications FERC denies: “Very few,” he answered. When asked to give an example of a single pipeline permit denied by FERC he replied, “Not off the top of my head.” According to attorney and former FERC employee Carolyn Elefant, only one gas pipeline has been outright rejected by FERC in the past 10 years.

With the new fracking era have come increasing corporate requests to build new pipelines and compressor stations and expand old ones. Nationwide, FERC approved 119 natural gas interstate transmission pipelines from 2009 through July 2015, with another 43 pending final approval for 2015. In the state of Pennsylvania alone, the Department of Environmental Protection Secretary John Quigley estimates that Pennsylvania will have 20,000 to 25,000 miles of new gathering lines (these collect gas from multiple flow lines and send it to transmission lines). These are to connect with 4,000 to 5,000 miles of new interstate pipelines over the next 20 years.

Both compressor stations and pipelines have been shown to wreak potentially severe impacts to the environment and to human and animal health. Nonviolent protests against FERC’s pro-corporate decisions have included national and local rallies, sit-ins and blockades of industry facilities.

In January 2015, FERC’s former chair, Cheryl LaFleur, told attendees at a National Press Club lunch, “Pipelines are facing unprecedented opposition from local and national groups including environmental activists. These groups are active in every FERC docket [record of agency activities] … at our open meetings demanding to be heard, and literally at our door … so FERC won’t be able to work. We have a situation here.”

A Pipeline-Saturated Country

The natural gas market has a serious glut – all that gas and nowhere to go. According to the industry, even the nation’s gargantuan pipeline system – more than 350,000 miles of gas pipelines that transmit gas from region to region and an additional 2 million more miles of distribution and service pipelines running through thousands of cities and towns – can’t handle or move natural gas fast enough. The industry’s solution is to build more pipelines, which are going through residential and environmentally sensitive areas in communities. Companies seeking to build interstate natural gas pipelines must first obtain certificates of public convenience and necessity from FERC. Opponents of the pipeline expansions argue, among other things, that these expansions are neither convenient nor necessary for American gas consumption, but designed to facilitate US exports to Europe and Asia, not to Americans.

Many communities believed they were immune from the fracking boom. But landowners like those in Minisink, New York, who long and unsuccessfully protested the construction of a compressor station in close proximity to homes, have found themselves on the front lines of the shale boom.

Following the Money

In its early days, FERC received its operating budget through federal general fund appropriations. FERC pays the money back to the US Treasury through annual charges and filing fees from the industries it regulates. It recovers the full cost of its operations through the annual charges and filing fees it imposes on the industries it regulates, as authorized by the Federal Power Act and the Omnibus Budget Reconciliation Act of 1986. FERC deposits this revenue into the Treasury as a direct offset to its appropriation.

At a July 15, 2015, FERC public meeting in Great Bend, Pennsylvania, in Susquehanna County, an audience member asked FERC environmental project manager Paul Friedman who funds the agency. “We are funded by Congress,” Friedman replied. Asked in a follow-up question whether FERC received funding beyond Congress, he responded with a quick “nope,” adding, “There’s a misconception going around that we are funded by industry.” He said FERC also charges fees to companies it regulates but that “those fees go directly into the US Treasury.”

Grassroots opposition groups have burgeoned in unprecedented numbers all along pipeline routes.

Yet even if entirely funded by Congress, FERC’s authority transcends federal, state and local governments. Citizens can appeal its decisions only through the agency’s own processes, which are so complicated that they require weeks of study. Attorney Anne Marie Garti, who in June 2012 cofounded the first pipeline protest organization, Stop the Constitution Pipeline, told a reporter three years ago, “I have some experience and training in environmental law and it took me a month to figure out the intricacies of FERC’s process.”

Undaunted, grassroots opposition groups have burgeoned in unprecedented numbers all along pipeline routes. Demonstrators have staged protests outside of FERC’s offices singing a spoof of the Beatles’ “Yellow Submarine” (“We all know FERC’s a rubber-stamp machine“) while Jeff Tittel, director of New Jersey’s Sierra Club, has coined the joke, “They’re the Will Rogers of regulatory agencies. They never met a pipeline they didn’t like.”

That jest is confirmed by FERC’s pipeline project approval record. From 2009 through February 2015, FERC approved 119 pipeline projects with approximately 74 more pending. When asked if FERC has ever denied a pipeline project Friedman stated, “Yes, but very few.”

If FERC’s own close relationships with the industry aren’t manifested by corporate contributions to the agency, they show up clearly in the shuttling of the commission’s officials to industry posts and back. Take former FERC acting chair Cheryl LaFleur who has held many industry positions over the past 25 years, including being president of Narragansett Electric Company and senior vice president of National Grid. Her predecessor, Jon Wellinghoff, resigned after accepting a position with the Portland-based law firm Stoel Rives LLP. The oiling of public relations in this particular case was highlighted by an Oregon business news report that exulted, “Portland-based law firm Stoel-Rives is bolstering its energy practice by bringing on a significant new name in the business: Jon Wellinghoff, the outgoing chair of the Federal Energy Regulatory Commission.”

LaFleur gaveled her last public FERC meeting to a close in March 2015 following outbursts by a dozen protesters wearing matching red T-shirts, shouting, “Stop Construction at Cove Point,” a reference to a liquefied natural gas export shipping terminal project in Lusby, Maryland. Security guards stepped in to empty the room in response to the “situation.” (LaFleur’s term as FERC chair ended on April 15, 2015. She has made clear her intention to stay on as commissioner after she hands over the gavel to Norman Bay, a New Mexico law professor who served in the US Department of Justice from 1989 to 2001.)

Resistance to Rampant Pipeline Expansion

One of the more active groups to oppose FERC’s ongoing pipeline permits is Beyond Extreme Energy (BXE.) “No new permits for fossil fuel infrastructure. Renewable energy NOW,” reads the legend under its website’s logo. BXE organized a weeklong nonviolent direct action campaign in November 2014 in Washington, DC. Reactions by FERC to further BXE activities have included one open meeting cancellation on the recommendation of the Federal Protective Service, a division of Homeland Security. FERC representatives screened attendees on the revised meeting date. Audience members pinpointed as potentially disruptive received a blue dot on their ID cards and were shunted into an overflow room to watch the hearing on a TV screen. One BXE member was arrested and charged with illegal entry but was later exonerated in a DC Superior Court trial. From September 8 to 25, the day after Pope Francis’ speech to Congress, BXE conducted a fast, calling on FERC to stop issuing new permits.

While BXE is demanding that FERC stop issuing all permits, other groups are focused on the pipelines headed for their communities.

In New England, Kinder Morgan, the largest energy infrastructure corporation in North America, is proposing an expansion to the Tennessee Gas Pipeline. This is a nearly 12,000-mile pipeline system that transports natural gas from Louisiana, the Gulf of Mexico and south Texas to the northeast region of the United States, including New York City and Boston. The expansion project, Northeast Energy Direct, would be an extension of Kinder Morgan’s existing Tennessee Gas Pipeline, which has delivered natural gas to New England since the 1950s.

As proposed, the line would pass through three western Massachusetts counties before entering southern New Hampshire, heading east and dipping back into Massachusetts to connect with a regional gas hub in the town of Dracut.

Groups have formed in virtually every community along the proposed route, enlisting the support of local officials and state legislators in opposing the pipeline. These groups have also called upon FERC for more hearings.

Unacknowledged Pipeline Intersections

The industry is trying to make Dallas, Pennsylvania, about 27 miles southwest of Scranton, into a natural gas hub (national distribution center). To that end, it has approved expanding two major pipelines that will intersect in Dallas. One is the Atlantic Sunrise (ASP). The other is PennEast. Both will connect with Williams Partners’ larger pipeline, Transco, which runs from Texas, north to New York and then up through Pennsylvania. In their intersection with each other and with Transco, the impacts of these two pipelines will be cumulative. But FERC reviewed each of them separately, not as part of a pipeline system. Reviewing a pipeline out of context has a name in regulatory lingo: segmentation. Pipeline corporations must submit environmental impact studies as part of their official applications to FERC. So how accurate and complete are the studies when segmentation has taken place – that is, when each pipeline is looked at as if it existed separately from the others?

ASP, owned by Williams Partners LP, a major energy infrastructure corporation, faces fierce opposition. It is a proposed expansion of Williams’ Transco interstate pipeline, and it would traverse about 190 miles through 10 Pennsylvania counties: Lancaster, Columbia, Lebanon, Luzerne, Northumberland, Schuylkill, Susquehanna, Wyoming, Clinton and Lycoming. Opposition has been strongest in Lancaster and Lebanon counties, drawing farmers, the Amish community, environmentalists, Native Americans and others into an improbable alliance.

ASP is designed to move Marcellus Shale gas from Susquehanna County in northeastern Pennsylvania as far south as Alabama. Connections to other pipelines owned by Williams Partners would send the shale gas to Cove Point, Maryland, which was approved by FERC in 2014 as an export facility, and to the Sabine Pass export facility in the Gulf of Mexico. FERC approved Sabine Pass in 2013 and the US Department of Energy agreed to let Cheniere, a major developer of liquefied natural gas terminals, ship supercooled gas to countries with which the United States does not have free trade agreements.

Sabine Pass and Cove Point export facilities are under construction and expected to start operating by 2017. This is the same time frame for completion of the Atlantic Sunrise pipeline, among others.

ASP intersects PennEast pipeline, a joint project shared by six companies, which runs 108 miles through Pennsylvania, ending in Lawrence Township, Mercer County, New Jersey. To date, 28 communities, 11 in Pennsylvania and 17 in New Jersey, have submitted resolutions to FERC opposing the PennEast pipeline.

The opposition is strongest in New Jersey where approximately 65 percent of landowners have denied PennEast permission to survey their land. During a September 10, 2015, New Jersey Department of Environmental Protection meeting between PennEast and FERC, PennEast went so far as to state that “100 percent of municipalities in New Jersey are being uncooperative.”

In July 2015, the New Jersey Department of Environmental Protection issued a letter to FERC stating that the state agency can’t evaluate land-use permits or review water-quality permits “if the potential impact of surveys and mitigation and restoration plans” are incomplete.

In August 2015, PennEast adjusted the route in response to concerns expressed by the owner of a quarry lying on the pipeline’s original path, and by a business developer. Ignoring the concerns of residents, PennEast owners are now running the pipeline through the backyards of other landowners who were given 30 days to figure out how to navigate the FERC website and file comments. In an August 11, 2015, press release by PennEast, project manager Anthony Cox stated, “We try to avoid backyards, per se.”

According to unnamed sources cited by Environment & Energy Publishing, a widely respected publication providing daily coverage of environmental and energy policy and markets, two kinds of pushback are affecting the pace of new pipeline construction: a national philosophical movement tied to climate concerns, and more regional landowner issues. “It’s harder to build a pipeline today than it was 10 years ago,” an industry source told Environment & Energy Publishing. “No doubt, it takes more time and it’s more expensive.”

In a sea of adverse decisions, the US Court of Appeals for the District of Columbia in June 2014, ruled that the Delaware Riverkeeper Network, the New Jersey Sierra Club and New Jersey Highlands Coalition were correct in their legal challenge to a major pipeline upgrade project proposed by a Kinder Morgan subsidiary, the Tennessee Gas Pipeline Company. The environmental groups argued that FERC had failed to consider the cumulative impacts posed by the connection between this and three other pipeline projects. “On the record before us,” reads the decision, “we find that FERC acted arbitrarily in deciding to evaluate the environment effects of the Northeast Project independent of the other connected action on the Eastern Leg.”

Correction: This article stated that the Atlantic Sunrise and PennEast have been approved by FERC. They have not yet been approved: They both have filed formal applications and are being reviewed by FERC at this time.

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