FERC and regulatory capture

Posted 8/21/12

Cheryl A. LaFleur, the chair of the Federal Energy Regulatory Commission (FERC), told an audience at a National Press Club gathering at the end of January that the public is intolerant of pipelines …

This item is available in full to subscribers.

Please log in to continue

Log in

FERC and regulatory capture

Posted

Cheryl A. LaFleur, the chair of the Federal Energy Regulatory Commission (FERC), told an audience at a National Press Club gathering at the end of January that the public is intolerant of pipelines and associated technologies.

“Pipelines are facing unprecedented opposition from local and national groups including environmental activists,” she said, “These groups are active in every FERC docket, as they should be, as well as in my email inbox seven days a week, in my Twitter feed, at our open meetings demanding to be heard, and literally at our door, closing down First Street so FERC won’t be able to work. We have a situation here.”

She seemed a bit mystified as to why the public should be so angry at her commission and the gas industry. Had she paid close attention to opponents of the three gas infrastructure projects in this region, she might better understand the public’s frustration.

There have been three compressor station projects in our area in recent years. The Hancock Compressor Station, which was built by Millennium Pipeline in Hancock, NY and went online at the end of March 2014, caused a great deal of concern to people who live nearby. Among the top concerns to compressors are negative impacts on health, noise, safety and a reduction of property values.

There were several locations where the pipeline could have been built that would have been close to fewer people, but which were rejected because, according to FERC documents, Millennium was “unable to come to an agreement with the owners of the property.” The documents don’t say if Millennium made reasonable offers, but it’s a safe bet that the company chose the location on Hungry Hill Road because it would be cheaper than any other location. That’s because they already owned some land there, due to the fact that in 2008, when they were replacing the Millennium Pipeline they seriously damaged the home and septic system of the owner and his fiancé. The company bought the house and the couple signed a piece of paper saying they would not discuss the matter in public. But whatever the reasons for the choice of site, FERC sided with the company and against the residents, and approved the location.

Another recent compressor project was the Minisink Compressor Station in Minisink, NY, which is situated in the midst of a development of hundreds of residential homes. Another potential location for the facility was located some seven miles away, where there are practically no homes. But Millennium wanted to build its compressor station at the more densely populated site. This time, two of the five FERC commissioners thought they should have built in the more remote location—but three did not. So, once again, Millennium got what it wanted from FERC, which no doubt helped their bottom line. The people, on the other hand, got nothing from FERC but an expensive legal fight. The compressor went online in June 2013.

The third project is now underway in Milford, PA, with the expansion of a compressor station that opponents say will spew emissions equivalent to 100 idling school buses. One way to eliminate those emissions would be for the company that is building the station to use electric turbines instead of gas turbines to push the gas through the pipes. According to the Delaware Riverkeeper Network, “The industry best practice for compressor stations as determined by the Natural Gas Star program, a partnership between the Environmental Protection Agency and pipeline companies, is to eliminate emissions by using electric engines and capturing vented gases.”

The compressor station will be owned by NiSource, which also owns a controlling interest in Millennium, and their revenue for 2013 was reported as $5.7 billion.

A NiSource spokesman told The River Reporter that the company will not use electric turbines because gas turbines are better for the environment. That may or may not be true, depending on how the electricity is generated, but it is certainly not true for the local environment in which the neighbors have to live. One can’t help wondering whether the real motivating factor behind the NiSource decision is that electric turbines would cost more than gas turbines.

The final licenses for the turbines have not been issued but, if the past is any guide, FERC will once again give the company what it wants, while the neighbors fight the decision in court.

So, yes, LaFleur, we have a situation, but pipeline-hating citizens are not the situation that needs to be addressed. Rather it is the pattern or, at the very least, the perception thereof, that has emerged wherein FERC seems to be acting in favor of whatever best supports the bottom line of the companies it regulates, rather than the health and welfare of the residents who are impacted by those industries. It is classic regulatory capture.

Comments

No comments on this item Please log in to comment by clicking here