This article appears as published in Foster Report No. 3250
Policymakers highlighted Trump administration efforts on several fronts to improve energy markets and natural gas infrastructure permitting at a U.S. Energy Association meeting May 23. They also lamented the political environment and dysfunction in Congress, with Sen. Joe Manchin (D-W.Va.) referring to a tribal mentality on Capitol Hill that squashes compromise and collaboration among Republicans and Democrats.
In the current political environment, “we’re at extremes,” and in order for one side to win the other side has to lose, which is hindering energy policy and many other legislative efforts, Manchin said.
Officials from the energy sector and government touted efforts at the Department of Energy, FERC, the Environmental Protection Agency, and U.S. Agency for International Development to enhance LNG exports to foreign markets, protect U.S. infrastructure from cybersecurity threats, reduce barriers to new technologies like energy storage and ensure environmental protection is a priority.
EPA Administrator Andrew Wheeler mentioned agency efforts to carry out President Donald Trump’s executive orders, including a recent mandate to examine guidance for reviews under Section 401 of the Clean Water Act (CWA). He chastised New York policies that deny water quality certificates for natural gas pipelines and vowed to move quickly on the guidance this summer, as outlined in the April 10 executive order. The CWA was not designed to give states “veto power” over infrastructure with national significance, and EPA intends to address the guidance under the law to improve the process, Wheeler said.
He referred to New England importing LNG from foreign countries that have a poorer environmental record for natural gas production than the U.S. It makes more sense from an environmental and economic growth standpoint for the Northeast to use domestic natural gas, but New York’s blockade on pipeline infrastructure hinders such progress.
Wheeler criticized Green New Deal (GND) supporters as being oblivious to the environmental gains made and progress on reducing greenhouse gas emissions. Wheeler views the GND as not valuing the reliability of the power grid by putting it at risk through overreliance on renewable resources.
Wheeler and other speakers noted that the shale gas revolution in the U.S. and exports of LNG are reducing greenhouse gas emissions by substituting natural gas-fired power generation for coal-fired plants. Manchin and others noted that although coal-fired power plants are being retired in the U.S. because of age and economics, newer plants in China and India will run for decades as energy demand climbs in those countries.
EPA will be releasing a new proposal on methane regulations in the next several months, Wheeler said, adding on to regulatory improvements that are slated to save the oil and natural gas sector about $480 million from 2019 to 2025. The agency will seek to ensure that the new regulations do not hamstring industry efforts already underway on reducing methane emissions at oil and gas facilities.
FERC Chairman Neil Chatterjee mentioned the great opportunity the U.S. has with its oil and natural gas resource base to compete in the global energy market. As did Mark Menezes, under secretary at DOE, Chatterjee noted that nations in Europe, not Asia, were the top destinations for U.S. LNG exports in the last two quarters, meaning gas from Russia is being displaced by fuel from the U.S.
Chatterjee mentioned FERC’s enhanced reviews of LNG terminal applications, recruiting talent at the staff level, and reaching a compromise among commissioners that have seen approvals of four different LNG projects. The Commission is putting the interest of consumers above ideological differences as it reviews LNG export project applications, while making sure the reviews are complete and the approvals are legally durable, he said.
Chatterjee said he remains focused on power grid reliability and pipeline security amid growing cyber threats from hostile nations. The Commission’s approval of reliability standards on supply chain risks for the power sector and collaboration with other federal agencies on regulatory challenges will enhance infrastructure security, he told the USEA audience.
The debate on Capitol Hill regarding the Transportation Security Administration’s resources and ability to ensure pipeline security has increased and is part of a wide-ranging conversation on energy infrastructure security, Chatterjee said.
At a technical conference in March, TSA Administrator David Pekoske said TSA is taking actions to improve pipeline security, including structural changes within the agency and enhanced regional efforts to increase the reach of pipeline security staff.
Chatterjee said he is pleased with the responsiveness that TSA has shown following a Government Accountability Office report and questions he raised, along with Commissioner Richard Glick, before the GAO report was issued at the end of 2018. “I’m going to stay on top of them and make sure that they deliver on the commitments they’re making” in terms of bringing resources and expertise to TSA’s pipeline security duties, Chatterjee said.
He also intends to make sure the pipeline sector cooperates and aids government efforts to address security concerns, as the industry has an obvious interest in protecting infrastructure. “I’m optimistic we can make progress,” and “I’m going to remain vigilant on it,” he said.
Natural gas has a role in reducing emissions globally, other speakers noted. Manchin emphasized the transition away from fossil fuels will be slower than some advocates of renewable resources believe. “You’re not going to eliminate fossil fuels any time soon,” he said.
Manchin and Menezes emphasized the role of nuclear power and carbon capture, use and sequestration (CCUS) technologies in addressing climate change. Any policy proposal to reduce carbon emissions and climate change threats need to include both elements, they said. Manchin referred to technology gains through research and development on CCUS as the equivalent of a “moon shot,” suggesting that the U.S. should be a leader and not a follower in that field to capture market opportunities as climate change concerns increase around the world.
By Tom Tiernan TTiernna@fosterreport.com