The Federal Energy Regulatory Commission (FERC) has five commissioners which are responsible for all major decisions the agency makes. FERC, which oversees permitting and regulations of interstate natural gas pipelines like PennEast (among other energy infrastructure and market areas), is run as a “quasi-judicial” agency of the Federal Government. They’re not run at all like an agency like the EPA or National Park Service, they have a budget funded by the industries they regulate, and they tend to make decisions within that tight group of 5 people.
As luck would have it, the numbers at FERC have been dwindling. While it is supposed to have 5 members, it’s actually been operating with only 4 for awhile now:
- Norman Bay, Chairman
- Cheryl LaFleur, Commissioner (previously Chairwoman)
- Colette Honorable, Commissioner
- Tony Clark, Commissioner
Tony Clark’s term expired this summer, but he stayed on until the end of September, with September 30th, 2016 being his last day. Clark was perhaps THE most pro-natural gas person on the commission, and it’s unknown what the commission decisions will look like without him. They are down to only three commissioners now, and the extra seats are unlikely to be filled until well after the Presidential Election. Which puts FERC in a bind, given that FERC Commissioners often to have to recuse themselves from various matters where they have had prior interests or have regulated before (this is particularly true of Commissioner Honorable). If a Commissioner does recuse themselves it’s not clear if FERC can act on that matter – can 2 Commissioners be considered a quorum? If anyone knows please let me know….
In any case, this dearth of Commissioners may have a chilling effect on FERC’s ability to get anything done for the next several months. This puts some questions on the table about the timing of FERC’s Final EIS, which the project will come out in December 2016 (only 2 months away).
We can get some insight into how FERC is run, and how it sees its role in the Federal Government from ex-Commissioner Clark himself. As luck would have it, Mr. Clark gifted the world with a podcast on his last day with the agency. The full transcript of that podcast is available here:
Link to Tony Clark’s Farewall Podcast Transcript
If you wonder why FERC acts the way it does, and perhaps seems so tone-deaf to the world around you, this podcast may give you some answers.
When asked if he found anything surprising after serving a full term at the agency, Mr. Clark said:
I’ve seen from the inside now an agency that I think actually works quite well, sometimes in a dysfunctional town. I point to FERC […] as one that operates in a very functional way.
(queue jaw drop of those dealing with the FERC pipeline permitting process).
Yes, this is how one of the FERC Commissioners feels about their agency. In a world of dysfunction, FERC is the shining beacon of an agency that really gets it and works “quite well”.
He goes onto to talk about how FERC is respected by judges and the courts:
And I think it’s because it’s an agency that when it makes a decision works very, very hard to ensure that it’s making it based on a record in a very nonpolitical way and does it in a way that can be explained so that a judge or justices can look at that record that we made, the decision we made and known that it was done in a reasonable way.
Notice here that Mr. Clark very carefully talks about how FERC builds up a record and drives to be non-political. It is not so much about what decisions are made – that is clearly besides the point to Mr. Clark – the entire point of the game is that you fill out the forms in exactly the right way, and you demonstrate to a judge that your arbitrary decision was “reasonable”.
He goes onto praise the model on which FERC is built:
Yeah, I think it works quite well on the whole, maybe this is the surprisingly thing that I’ve worked for over 15 years now in regulatory agencies, but I think the independent regulatory commission model of government for certain areas works very, very well and I think the energy industry is one of them.
When you’re talking about something as important as energy, which is critical to the economy, safety, well-being of the nation’s economy, our people, critically important. You want to have decisions that are made in a nonpartisan, nonpolitical way. So you have expert agencies that are made of members with a professional staff providing guidance but commissioners who are appointed for a term of office and are insulated from some of the day-to-day politics that might otherwise go on. And through these quasi-judicial, quasi-administrative agencies you can make decisions that are really in the public’s interest, and what you get when you have a five-member commission like that is you can have a process by which decisions are made on that record.
What Mr. Clark is saying here is that the old dirty, messy “adversarial” way that most courts and agencies are run get in the way of getting things done. By “adversarial”, I mean a system where voices can be heard equally on both sides of an issue. It’s a very fundamental aspect of any true democracy.
FERC doesn’t work that way, and Mr. Clark likes that. Rather than have politics and the public intrude and mess everything else, we have an “expert” agency of “professional staff” who are shielded from all that nonsense, and a group of 5 God-like beings who make all of the decisions in a vacuum chamber. The concept of an adversarial system where parties can question each other, look directly at evidence, and challenge assumptions just gums up the works in an agency like this, so it’s thrown away. Instead, we should all just trust these Experts and Professionals to look at the data themselves, and trust these benevolent parental figures make the right decisions for us kids.
When you’re “you’re talking about something as important as energy”, it’s important to not get distracted by trivial things like landowners rights and the environment.
Mr. Clark goes on to say that he doesn’t have any job lined up just yet. He’s going to take off a “couple of weeks” and he “[doesn’t] have any particular job lined up or anything like that”. On the savings from a government salary he’s just going to coast into the Holiday season with no job prospects on the horizon. Once he’s done sipping his Tequila Sunrises off on some beach, anyone want to bet what industry’s doors he might go knocking on for a high paying job?
So if you’re wondering why FERC seems to never listen to any real stake holders, why they seem insulated from their world, and the judgements often come across as tone-deaf, now you no why. It’s not accident – this is how the agency is modeled, and they really, really like it that way.
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The Cost of the Pipeline 
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