Trying to decipher the new FERC chairman

bio_mcintyre_high

So I’ve heard people going back and forth on the new Chairman McIntyre at FERC and his call for a review of FERC’s 1999 policy statements. Some are (very) cautiously optimistic that this could be an opportunity to possibly reform FERC to some degree. Others think this is a transparent ploy by FERC to streamline their procedures even further and will turn the agency into the agency equivalent of fast food (“Your pipeline decision in 30 minutes or it’s free!”).
 
I think there’s merit to both sides. The new FERC Commissioner was the co-leader of the global Energy Practice at the law firm Jones Day, where he spent most of his legal career.  He’s represented clients before FERC, and is clearly an energy industry “insider”.

On the flip side, he’s a hard core lawyer, and has been involved a lot in actual litigation – rather like former Chairman Norman Bay.  He’s not an energy CEO or a regulator, which maybe counts for something.  Hard core technical lawyers are a different kind of beast than normal industry hacks.

A McIntyre Pipeline Case Before FERC

To try to get inside the man’s head, I decided to search the FERC docket for his cases.  Since he’s a lawyer who’s represented actions before FERC, it makes sense that he’d be on the docket.  And as it turns out, he is.  In the past 30 years, Mr. McIntyre has filed submissions to FERC dockets or been named in them 129 times.  The vast majority of those docket entries are on electric rate cases.  But there are a dozen or so natural gas pipeline submissions.

Among those submissions is this one from Mr. McIntyre from March 2012:
https://elibrary-backup.ferc.gov/idmws/common/opennat.asp?fileID=12914270

In this submission, Mr. McIntyre is arguing for his clients Chevron Corporation, who is protesting the Spectra Energy New Jersey – New York Expansion Project.  Yes, protesting.  The request itself is a “EMERGENCY MOTION TO HOLD PROCEEDINGS IN ABEYANCE AND FOR TECHNICAL CONFERENCE”.

Specifically, Mr. McIntyre claims in his submission that Spectra Energy and FERC are ignoring important, in some cases vital, information in it’s Draft Environmental Impact Statement, from McIntyre’s client Chevron.  He claims that the level of ignorance is so bad that the proceedings be immediately put into abeyance, and a technical conference convened for Spectra, FERC, and Chevron to debate the issues at hand e.g. stop everything!

In the opening paragraph, he states:

“the result may be the issuance of a Final Environmental Impact Statement addressing a Project route that not only no longer represents the current intentions of the parties (as discussed herein), but also carries significant risks of profound environmental damage to the land and public waters of New Jersey – hence this Emergency Motion.”

Note: the emphasis there is not mine but was added by Mr. McIntyre.  The site in question is described in this way:

“the Chevron site is both a remediation and redevelopment site and is under the guidance of the New Jersey Department of Environmental Protection (“NJDEP”) for remediation of petroleum constituents to support residential redevelopment.6 Constituents of concern include benzene, non-aqueous phase liquids and lead, resulting from the site’s past use as a Texaco petroleum terminal/lube blending facility and General/Pirelli cable manufacturing facility.”

Mr. McIntyre then speaks to the wholly inadequate response of Spectra Energy to Chevron’s environmental concerns at the site:

“Although subsequent filings by Spectra suggested to the Commission that Chevron’s serious environmental concerns have been resolved, that is simply not the case. Notwithstanding the optimistic words set forth in Spectra’s filings and data request responses, the profound and significant environmental issues raised by Chevron remain completely unresolved.”

After this a number of issues and concerns are detailed in the motion.  All these concerns were filed with FERC.  But instead of responding to Chevron’s concerns, McIntyre says this happened instead:

“Although Spectra filed a response to various parties’ comments on the DEIS, Spectra expressly refrained from responding to Chevron’s comments and environmental concerns.15 Instead, Spectra indicated to the Commission that Spectra and Chevron would meet to resolve those concerns.16

[….]

In its response, Spectra averred that the Chevron alternative was not viable, and once again, Spectra implicitly assured the Commission Staff and the Commission that Chevron’s grave environmental concerns with the Project route would be resolved:

To date, Spectra has never responded to Chevron’s DEIS comments. Nor has Spectra ever provided information on these matters sufficient to enable the Commission Staff or the Commission to be properly cognizant of, let alone to meaningfully assess, the profound environmental risks involved with the DEIS-described route.”

Is this starting to sound familiar?


The saga continues.  Rather than acknowledge the potential issue, Spectra comes out and asks for their application to be expedited instead!

“Spectra responded to the Staff’s scheduling notice. Rather than recognize the legitimate need of the Staff for additional time to permit a thorough environmental analysis, particularly in light of changes to the proposed Project route, Spectra instead filed a response urging that the environmental review be expedited – and that a certificate for the Project be issued by “March or early April” 2012.24 Nowhere in Spectra’s filing did it respond to the environmental concerns raised by Chevron in October 2011.25 Nor did Spectra – in the course of asking that the environmental analysis of the Project be accelerated – inform the Commission or the Staff that no resolution had been reached regarding a safe route for the Project across the Chevron site.26

McIntyre’s motion goes on to outline the specific relief they want (basically: FERC should force Spectra to acknowledge these issues and deal with them BEFORE the Final EIS is issued, not at some hand-wavey later date).

Ultimately, FERC ignored McIntyre’s motion, and it went completely against him.  FERC  did exactly what we would expect – in the Certificate Order for the NJ-NY Expansion project, FERC set condition 20:

“20. Prior to construction between Mileposts 5.68R and 8.60R, Texas Eastern shall file with the Secretary for review and written approval by the Director of OEP, a site-specific plan addressing the concerns of Texaco Downstream Properties, Inc. and Chevron Land and Development Company (collectively, Chevron) about the slurry wall, groundwater contamination, and the timing of construction activities. This plan shall:
a. include a diagram verifying the actual separation between the bottom of the slurry wall and the top of the horizontal directional drill (HDD) alignment;
b. include provisions for a pre- and post-construction assessment of the slurry wall’s integrity;
c. include monitoring of the Kill Van Kull during construction for benzene- contaminated groundwater and include mitigation measures to contain and control any potential release of contaminated water into the river;
d. describe the measures that will be implemented to avoid adverse impacts on Chevron’s mitigation plans; and
e. discuss how conflicts between pipeline construction and site remediation work will be managed if Chevron will be conducting its next remediation phase at the same time the pipeline will be constructed.

This condition basically says “Hey, try to work out this spat with Chevron, OK?”.  And that’s about it.  And hey, if you release benzene, please let us know!

Conclusion?

As I mentioned, Mr. McIntyre is pretty light on the FERC docket on pipeline matters.  Nearly all of his arguments are on electric rate cases with very few exceptions.  But his work on  the Chevron/Spectra Energy dispute and his submission to the docket on behalf of Chevron makes a few things clear.  He knows, from his own experience, that FERC ignores major environmental issues, even from energy industry executives and colleagues.  He knows FERC never gives in to any request, no matter how reasonable, to look at certain critical issues or to delay proceedings.  He has seen how FERC prepares totally incomplete Final Environmental Impact Statements, and uses conditions in the Certificate Order as a band aid to fix it.

Maybe this experience means nothing to Mr. McIntyre, and he could care less about the Chevron case and its outcome.  Maybe he is just another industry hack who’s part of the FERC revolving door with industry.  Maybe we’re all screwed when they start reviewing the 1999 FERC policy statements.

Or maybe – just maybe – there’s a glimmer of Norman Bay in Mr. McIntyre.  And maybe a hard-core technical nerd of a lawyer like he’s demonstrated to be chafes somewhere deep down inside at all of the screwed up stuff FERC does on a routine basis.  Maybe.

I don’t expect miracles.  I think the policy statement review will likely end up being a disaster for people who are against the explosion of irresponsible pipeline development in the country.  Most likely they will move to streamline the hell out of the regulations and make it easier to push pipeline through.

But maybe – maybe – maybe there is a silver lining in here.  Perhaps there is a positive way through this mess, if we can see our way through the maze.  Before we pre-condemn Mr. McIntyre, why don’t we do everything we can to move him in the right direction and make FERC a federal agency that is actually responsible and responsive. Let’s hope that the public is invited as stakeholders in this review, and if so let’s ensure our comments on FERC are heard loud and clear, along with ways to fix them.

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Mike Spille

I'm a thinker, an analyzer, a synthesizer. Maybe not in that order. I live in West Amwell NJ with my wife Kristina, our two kids Day and Z, our two dogs Fern and Cinna, and two cats Ponce de Leon and Xavier.

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