Make the Federal Energy Regulatory Commission Accountable to Americans
Problems with FERC

FERC’s Flawed Permitting Process

By Robert Godfrey

FERC is an Independent Federal Government Agency (See: http://www.ferc.gov/about/ferc-does.asp)

The Federal Energy Regulatory Commission is an independent agency within the US Department of Energy (DOE). Being independent means it cannot be directed by the President or the DOE. To force any changes in FERC’s conduct requires either court action (and $millions in costs) or, literally, an act of Congress.

Permitting decisions are made by five Commissioners who are appointed by the President to staggered five-year terms. No more than three Commissioners can be of the same political party. If a Commissioner resigns, he or she may continue until a replacement is appointed and confirmed by the Senate, or the seat may be left empty until appointment and confirmation is accomplished. Currently, only four Commissioners are sitting on the Commission. One Commissioner is appointed by the President as the Chair of the Commission. All of the currently-sitting Commissioners were appointed by President Obama.

FERC Commissioners are typically participants in the energy industries; although, they sometimes come from positions as regulators of energy industries, or as public advocates. As of this writing (2015 November 23) there are just four Commissioners, with one vacancy. (See the Commission members’ webpage: http://www.ferc.gov/about/com-mem.asp)

Environmental Impact Statement (EIS)

Upon an applicant entering formal FERC permitting, and when permitting requires writing and publishing an Environmental Impact Statement (EIS), FERC issues a Notice of Intent to Prepare an Environmental Impact Statement (NOI). The EIS is prepared by FERC staff, first as a Draft EIS (DEIS). The public is able to comment on the DEIS. Then, the Final EIS (FEIS) is prepared. This is the document ultimately used by the Commissioners in making its permitting decision.

Problem 1: FERC Contract Staff & EIS Preparation
As explained to this writer by a FERC staffer, complex projects, such as liquefied natural gas (LNG) terminal projects, require more personnel than employed by FERC to prepare the resulting Environmental Impact Statement (EIS); therefore, Contracted Staff are used. In such cases, the FERC applicant recommends three companies to FERC. From these three, FERC staff selects one, although FERC may ask for different choices. The selected company provides personnel who operate as FERC Contract staff in preparing the EIS; however, their salaries are paid directly by the applicant. In other words, FERC Contract Staff are beholden to the applicant for their incomes. Plus, it is in the applicant’s best interest to suggest to FERC contract companies that will look favorably on the applicant’s project.

In real experience, Contracted Staff has at times intentionally omitted from the EIS information that would reflect negatively on the project, biasing against the public interest, in favor of the applicant’s interest.

Problem 2: Who Reads the EIS?
Once the FEIS is published, there is a period for public comment. Sometime after that period, the Commissioners make their permitting decision. How that decision takes place is troubling,

Each of the Commissioners has one or more FERC lawyer. Those lawyers read the FEIS. (An FEIS can consist of hundreds or even thousands of pages.) It is unlikely that each Commissioner thoroughly studies each projects’ FEIS.

Problem 3: How the Permitting Decision is Made
The Commissioners’ lawyers prepare two permitting decisions based on their reading: 1) In favor of issuing a permit, and 2) opposed to issuing a permit.

The Commissioners read their lawyers’ written decisions, and vote.

Commissioners may — and probably do — read some of a project’s Docket. However, considering the great number of projects before FERC, it would be impossible for Commissioners to read all filings. Out of necessity, the Commissioners’ decisions are insulated by at least two generations from most of the actual Docket information.

As necessary as it is for the Commission to operate this way, it opens plenty of opportunity for abuse by staff along the way, and abuse is evident. Multiple incidents of such abuse have been witnessed by this writer, and will be provided in future posts.

FERC approval is almost certain in cases of natural gas pipelines and LNG terminals (see: http://www.mondaq.com/article.asp?articleid=428362).

Alarm bells are ringing. They are ringing at fixFERCfirst. They should also be ringing in the US Senate and Department of Justice. FERC desperately needs fixing.

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About the author: Robert Godfrey is researcher & webmaster for Save Passamaquoddy Bay 3-Nation Alliance headquarters in Eastport, Maine. The alliance represents citizens of the United States, the Passamaquoddy Tribe, and Canada. Godfrey has worked since 2004 on preventing three liquefied natural gas (LNG) terminals from building on the Maine shore of international Passamaquoddy Bay, within the western Bay of Fundy.

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