Demoted chairman resigns from FERC and could stymie pipeline approvals

Bloomberg/Fuel Fix:
A U.S. energy regulator filed his letter of resignation on Thursday. And with that letter, he may have just brought federal decisions on multi-billion-dollar natural gas pipelines to a halt.

Norman Bay said he’ll leave the Federal Energy Regulatory Commission effective Feb. 3. His announcement followed President Donald Trump’s decision to replace him as the agency’s chairman with his fellow commissioner, Cheryl LaFleur.

With Bay’s departure, the commission will have just two commissioners and will lack the quorum needed to decide on everything from controversial gas pipeline projects to contested utility mergers. His resignation comes just as developers are rushing to build a network of pipelines to accommodate booming gas production from shale reserves in the Northeast, unlocking bottlenecks that have caused prices to plunge.

In Houston, the law firm Baker Botts, which has a large energy practice and represents clients before the commission, said it was concerned that Bay’s departure would create backlog of project reviews and potential gridlock.

“One of the more significant effects that the lack of a quorum could have is in delaying the approval of any natural gas pipeline projects currently pending before the agency,” Brooksany Barrowes, a Washington based Baker Botts partner, said in a written statement.

Only the commissioners acting on behalf of FERC can approve those projects, she said. This could be a major issue, given the need for expanded gas infrastructure and the narrow construction time frame of many projects.

Among the pipelines waiting for approval are: Energy Transfer Partners LP’s Rover project; the PennEast shale line being built by a group of companies including UGI Corp. and Spectra Energy Corp.; and the Atlantic Sunrise system by Williams Partners LP. Spectra Energy’s Nexus system and National Fuel Gas Co.’s Northern Access expansion may also be affected.

“Basically, if they don’t have a certificate by Feb. 3, they don’t get to start construction in the fall,” Christi Tezak, managing director of Washington-based industry consultant ClearView Energy Partners, said in a phone interview.
This looks like another attempt by Democrats to delay the changes proposed by President Trump.  It certainly plays into the hands of the anti-energy left which has been opposed to facilitating the delivery of fossil fuel energy where ever they can.

It is expected that the process of getting a replacement approved could take a couple of months which would mean construction delays into 2018.  That is assuming that Senate Democrats do not attempt to further delay the process.


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