Week Ending December 21, 2018

LaFleur, Chatterjee Address Lack of Votes on LNG Project at McNamee’s First Meeting

This Article Appears as Published in Foster Report No 3229
LaFleur, Chatterjee Address Lack of Votes on LNG Project at McNamee’s First Meeting

In an odd twist, a lot of the buzz following the FERC December 20 open meeting was about what did not take place, as two major natural gas projects were stricken from the agenda and addressed by Commissioner Cheryl LaFleur and Chairman Neil Chatterjee.

LaFleur said she wanted to take the opportunity to speak briefly about the Venture Global Calcasieu Pass LNG project (CP15-550) and related TransCameron Pipeline (CP15-551) in Louisiana. “I’m disappointed that we are not voting on the project today,” she said, noting that she was prepared to cast a vote based on her assessment of the legal requirements under the Natural Gas Act and the National Environmental Policy Act.

LaFleur has concurred on several relatively small gas pipeline projects that garnered dissents from Commissioner Richard Glick about FERC’s lack of analysis on upstream or downstream greenhouse gas (GHG) emissions. Referring to those concurring statements and what she views in her consideration of project applications, LaFleur said she is open to approving projects that she considers in the public interest.

She said FERC’s responsibilities regarding review of LNG facilities is different than pipeline applications “and that has implications for the scope of our environmental review.”

Without a vote on the LNG project and a separate pipeline project by Dominion Energy Transmission Inc. (DETI) in Pennsylvania and Ohio, it appears that LaFleur would not support either project, with Glick also not supporting them without an analysis of the related GHG emissions.

LaFleur, whose term as commissioner is scheduled to end in June of 2019, said she did not want to wade too far into the internal deliberations among commissioners. She said she thinks she has made clear what is required of the Commission on whether to authorize the Venture Global Calcasieu Pass project and pipeline. “I believe there are reasonable approaches for finding common ground on these important issues going forward and I remain ready to vote on this project and will consider the record as it exists” when a vote is taken.

During the media briefing after the meeting, Chatterjee also said he did not want to comment too much on internal deliberations. He said LNG exports are a priority and he is disappointed that commissioners were not able to act on the applications. “I appreciate my colleague’s concerns,” and LaFleur has in the past been a strong supporter of LNG exports, Chatterjee said, adding that he remains committed to collaborating on such issues.

New Commissioner Bernard McNamee voted “present” at the meeting and did not vote on the agenda items. He was welcomed by his colleagues and said he did not want to rush to make a judgement on the important matters on the agenda.

McNamee said people have asked him what his priorities will be as a commissioner, and he said he wants to keep an open mind and listen to the views of FERC staff and others. He thanked President Donald Trump for nominating him, Senate Majority Leader Mitch McConnell (R-Ky.) for support in his Senate confirmation process, family and FERC commissioners and staff who have helped him become acclimated at the Commission.

The $4.5 billion Calcasieu Pass LNG project and TransCameron Pipeline is being developed by Venture Global LNG to export 10 million tons per annum, with completion planned for 2022. On August 31, the Commission issued a notice that it expects to issue a final order for the facilities by January 22, 2019.

The other item not voted on, and not addressed in the comments of LaFleur and Chatterjee, is DETI’s $49.8 million Sweden Valley pipeline expansion to boost capacity by 120,000 Dth/d for a single customer to reach Midwest markets. The application (CP18-45) was filed in January 2018 to add metering and regulation facilities, a short pipeline segment and looping and a new connection with a pipeline jointly owned by DETI and National Fuel Gas Supply Corp. DETI sought approval by late 2018 to be able to begin construction in January 2019 to meet an in-service date of Nov. 1, 2019.

In other actions at the meeting, three different protesters interrupted the meeting and asked McNamee to recuse himself on matters that come before FERC given his background in support of fossil fuels and the Department of Energy proposal to increase compensation for coal and nuclear power plants. FERC rejected that proposed rule but the matter is pending on rehearing, and Chatterjee noted during the media briefing that McNamee received ethics training and advice from legal counsel about recusals on his first day, just as all commissioners have upon being sworn in.

When asked if he thinks McNamee should recuse himself from any FERC order dealing with the power grid resilience proceeding, Chatterjee said that decision would be addressed by McNamee upon the guidance from ethics and legal counsel. He expressed hope that parties give McNamee “the opportunity to be an earnest public servant” as Chatterjee believes he will. Any recusal decision will come from McNamee, Chatterjee said, declining to give a view on the matter.

The prospect of a court overturning any FERC order based on McNamee participating and providing a bias was also asked, with Chatterjee stating that FERC always strives to make sure its orders are legally defensible. “I have complete confidence in the lawyers in the building” that aim to make sure whatever actions FERC takes can withstand legal scrutiny, he said.

FERC also issued a proposed rule (RM19-2) to revise the horizontal market power analysis for power sellers to obtain or retain market-based rate authority in certain organized wholesale power markets. The proposed rule would relieve sellers of the requirement to submit indicative screens for assessing market power in any organized market that administers energy, ancillary services and capacity markets.

By Tom Tiernan TTiernan@fosterreport.com

 

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