The White House late Monday announced its intent to nominate two commissioners to the US Federal Energy Regulatory Commission, but the timing and politics of confirmation are still uncertain. Meanwhile, FERC is without the quorum needed to conduct its full range of business. Maya Weber examines how many backlogged orders could await newcomers and what impact FERC's current state is having on gas pipeline projects. A major trade group and Senate energy panel leaders are concerned about delays; will the commission be back at full speed soon?
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Video Transcript
FERC quorum concerns increase uncertainty for gas pipeline projects, rates
By Maya Weber, associate editor, Inside FERC
Welcome to The Snapshot, a series examining the forces shaping and driving global commodities markets today.
We're here in Washington, where the Trump administration is taking action to expedite priority energy projects and unleash untapped natural gas reserves.
Well, not so fast.
While the administration has announced plans to rethink environmental policies unpopular with the oil and gas sector, one key federal agency has its hands tied.
The Federal Energy Regulatory Commission for three months has lacked the quorum of at least three commissioners needed to give interstate natural gas projects a final signoff.
The regulated industries are getting frustrated. They've planned significant new pipeline capacity over the next few years. Despite their repeated pleas, the White House has yet to formally nominate new commissioners.
And the hurdle for restoring a quorum just got higher when one of the sitting Democrats announced she won't be seeking another term after hers expires at the end of June.
White House announced two Republicans for FERC this week, but timing, politics of confirmation in Senate still uncertain
Those who've watched the process before tell Platts it could take another 5 to 10 weeks to seat commissioners once the White House sends names to Capitol Hill.
Concern is growing about delayed energy rate and project decisions handled by the agency, as well as the mounting backlog of orders that will confront new commissioners.
There could be 150 or more backlogged orders awaiting FERC newcomers: former commissioner
There easily could be 150 or more backlogged orders greeting the newcomers, one former commissioner told me. That could delay decisions on major policies while they work through the stack.
Already the commission has declined an invitation to weigh in on a court dispute over state subsidies in competitive power markets in Illinois.
So have pipeline projects been stopped in their tracks? Not exactly.
In the week or so before FERC lost its quorum, it approved a slew of gas pipeline expansions, clearing most of the projects that were ripe for action, though one major pipeline, NEXUS, was left idling. And FERC staff has been busy signing off on notices to proceed with construction.
In fact, project signoffs in January and February were more than double the amount backed a year earlier.
Still, developers are likely biting their nails. There could be complications for projects hoping for approval this summer or early fall so they can meet in-service dates. In one case, a state agency already has indicated it can't review a wetlands permit application until FERC acts.
INGAA told Congress about $14 billion worth of projects sidelined by lack of FERC quorum
As of early May, most project sponsors said they expect to meet their schedules. But INGAA, a major trade group, has told Congress that projects totaling about $14 billion dollars have been sidelined. Will the commission be back at full speed soon or will there be more delay?
Until next time on the Snapshot—we’ll be keeping an eye on the friction between politics and the markets.