Week Ending March 15, 2019

Perry Touts U.S. LNG Exports, Stresses Need for Full Contingent at FERC

This Article Appears as Published in Foster Report No 3240
Perry Touts U.S. LNG Exports, Stresses Need for Full Contingent at FERC

Energy Secretary Rick Perry continues to stress the importance of filling the commissioner vacancy at FERC, with his latest remarks coming March 13 at the CERAWeek conference in Houston.

Whether his comments carry much weight with the White House or have President Donald Trump narrowing down candidates for the open FERC spots remains to be seen. A few sources said officials in the White House favor a nomination for David Hill, former general counsel at NRG Energy who also served at the Department of Energy for about seven years, as general counsel and as deputy general counsel for energy policy from 2002 into 2009.

Those same sources, who asked not to be identified, said others in the Trump administration do not want Trump to nominate Hill and are pushing for other candidates for White House consideration. Having someone with state regulatory experience could be valuable at FERC, even if the consideration of such a nominee is as a back-up plan in case Hill does not get through the vetting process, one of the sources said.

The current vacancy is for a Republican commissioner to fill the seat of former Chairman Kevin McIntyre, who died January 2. Another vacancy is in the offing, as Commissioner Cheryl LaFleur, a Democrat, said she would not seek a third term at FERC. Her term expires at the end of June, though she can stay at the Commission until the end of the current term of Congress or a replacement is confirmed by the Senate.

For the non-Republican nominee to fill LaFleur’s spot, which could be a Democrat or an Independent, Allison Clements, previously with clean energy consultant Goodgrid and the Natural Resources Defense Council, is reported to be the choice of Senate Majority Leader Chuck Schumer (D-N.Y.). Sources have not heard other names floated as potential nominees for LaFleur’s spot.

Perry’s remarks at CERAWeek are at least the third time in the past three weeks he has mentioned the importance of filling the FERC vacancies. Earlier comments were at a press conference and at the DOE leadership forum among top officials at the department.

When asked by Dan Yergin, vice chairman at CERAWeek owner IHS Markit, what is the biggest challenge facing the U.S. to keep it from realizing its potential as a global energy supplier, Perry said “getting the product to market.” That included building pipelines out of producing basins and export facilities, but also the permitting process at FERC. Pointing out FERC Commissioner Bernard McNamee in the audience, and jokingly referring to him as “Bernie Mac,” Perry said filling the two commissioner openings at FERC is vitally important.

There are tens of billions of dollars in LNG export projects being reviewed at FERC, along with at least three projects under construction that should be placed in service in 2019, Perry said.

The U.S. is exporting LNG to 34 countries across five continents, and with the shale oil and gas production gains “we’ve got more than enough energy to share with the world,” he said. Besides expanding the reach of U.S. supplies, the projected gains in exports brings “freedom of choice for energy consumers everywhere” who may have been beholden to one or two expensive suppliers in the past. “We want other countries to benefit from unleashing our energy abundance,” because U.S. suppliers uphold the rule of law and the sanctity of contracts, Perry said during a CERAWeek session that was livestreamed.

Perry noted that he and other leaders at DOE, including Deputy Secretary Dan Brouillette, Under Secretary Mark Menezes, and Assistant Secretary for Fossil Energy Steven Winberg, are scheduled to meet with foreign leaders and the CEOs of energy companies March 14 for the Partnership for Transatlantic Energy Cooperation (P-TEC) Ministerial and Investment Forum. The P-TEC gathering will include nations that share the U.S. commitment to energy diversity and environmental protection.

While the U.S. is not part of the Paris climate accord after the change by the Trump administration, Perry said in bilateral meetings many countries who are participating in the Paris accord want to import U.S. LNG for power generation to trim power plant emissions and save consumers money compared with other suppliers.

Gains in gas-fired generation have helped the U.S. reduce greenhouse gas emissions on a large scale, Perry said. He did not mention the National Climate Assessment from November 2018 that showed GHG emissions increased in the U.S. after many years of declines, though he did call for a healthy exchange of ideas on the environment. “We need to face reality” and “not reject the science” that emissions are being driven lower through advanced technologies and clean resources like nuclear energy.

Perry lauded the innovators in the energy sector who are working on technologies for the future – such as small modular nuclear reactors and carbon capture, utilization, and storage systems – and those of today that have helped U.S. producers increase energy supplies. U.S. companies are applying their technologies to enable progress in the world’s poorest countries who have been trapped in energy poverty.

With the growth in energy supplies at reasonable costs to consumers, “energy independence used to be a sound bite, but now it’s a reality,” said Perry. “This is the new American energy era,” he proclaimed.

When asked by Yergin about the Green New Deal and the priorities of some in Congress to scale back the use of fossil fuels, Perry said “having a conversation about the Green New Deal is a good thing.” People may disagree on energy policy or priorities, but that conversation should be held “in a thoughtful, polite, respectful way,” he said.

Perry expressed pride in America reducing GHG emissions over the last 10 years or so, and said, “if we’re going to be serious about climate, we have to be realistic” and use all energy resources, which include natural gas, nuclear, renewable resources, and other technologies in a combined way.

By Tom Tiernan TTiernan@fosterreport.com

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