Divisive Gas Reviews Pose Early Test for New FERC Commissioners

The three new members of the Federal Energy Regulatory Commission could shift how the panel reviews natural gas pipelines and liquefied natural gas terminals amid a struggle between industry and environmental groups over the benefits and costs.

Industry says the projects are more needed now than ever to meet the growing electricity demand. But environmental groups have pressed FERC to reject new natural gas infrastructure because of the climate change impacts of locking in fossil fuels for decades to come.

The new commissioners—Democrats David Rosner and Judy Chang and Republican Lindsay See—will wade into the divisive issue following their smooth confirmations by the Senate this week. With the departure of Commissioner Allison Clements (D) at the end of June, FERC will return to a five-member commission with a 3-2 Democratic majority for the first time in about 18 months.

The independent agency of the Energy Department regulates the interstate transmission of electricity, natural gas, and oil; reviews proposals to build interstate natural gas pipelines and liquefied natural gas export terminals; and licenses hydropower projects.

Rare Disputes

While most FERC agenda items are uncontroversial, the role of natural gas has roiled the commission for years.

A FERC policy finalized in 2022 to scrutinize gas projects effectively cost former FERC Chairman Richard Glick (D) another term at the commission. That policy, which Glick rescinded weeks later, drew intense blowback from the gas industry and its chief ally in Congress: Sen. Joe Manchin (I-W.Va.), chairman of the Senate Energy and Natural Resources Committee. Manchin blocked Glick’s renomination later that year.

Climate advocates have repeatedly sued the agency and protested outside its monthly meetings in Washington over LNG projects. One protest featured an effigy of Manchin as a puppeteer, with FERC commissioners dangling from strings.

In recent months, current FERC Chairman Willie Phillips (D) and Commissioner Mark Christie (R) have teamed up to move natural gas projects over dissents from Clements. Last year, when the commission was split 2-2 between the parties, a rift over whether to consider a project’s greenhouse gas emissions between Clements and then-Commissioner James Danly (R) stalled project approvals for several months.

The new commissioners, in their confirmation hearing in March, signaled they would make new gas infrastructure a priority.

Chang, an energy economist and former Massachusetts undersecretary of energy and climate solutions, walked back past statements questioning the value of building more natural gas pipelines given the urgency of climate change. Questioned by Sen. John Barrasso (R-Wyo.), the committee’s top Republican, Chang said: “If I had my magic wand, I would love to have more gas infrastructure and gas supply to New England.”

Rosner, who has been at FERC since 2017 and was most recently a detailee in Manchin’s office, promised to embrace a “diverse resource mix.” Friends of the Earth launched an ad campaign against Rosner because of his past work as a natural gas advocate.

And See represented the state behind West Virginia v. EPA, a pivotal US Supreme Court case that constrained the EPA’s authority to regulate greenhouse gases.

“We need a FERC that acts like the climate actually matters,” said Lukas Ross, deputy director of the climate and energy justice program at Friends of the Earth. “I’d love to be proven wrong, but that does not seem like the slate of nominees that was just approved.”

Energy Demand

Manchin praised the nominees on the Senate floor this week ahead of the votes.

The new commissioners “are very different people, from very different backgrounds,” Manchin said. “What matters most is their willingness to work with one another, to consider and assess fairly different interests and points of view, and to put partisan passions aside in favor of the public interest.”

FERC is in the midst of trying to address intensifying concerns from energy experts about the need for more power to keep the lights on. Data centers driven by artificial intelligence and the growth of manufacturing and electric vehicles spurred by US incentives have surprised utilities. Grid reliability projections show possible shortfalls in the future.

Natural gas consumption hit a record high of 141.5 billion cubic feet a day (bcf/d) in the lower 48 states, according to S&P Global Commodity Insights.

More than 40% of electricity generation comes from burning natural gas, raising the stakes for better coordinating the gas and electric systems. Artificial intelligence will require 47 gigawatts of new power generation by 2030, and 60% of that would need to come from gas, according to a Goldman Sachs study in April. That equates to 3.3 bcf/d of new gas capacity required by the end of the decade just to meet AI power demand.

But the US added less than 1 bcf/d of interstate pipeline capacity each year in 2022 and 2023, according to the US Energy Information Administration’s pipeline data. Lengthy permitting reviews and litigation has stalled and scrapped projects.

“We’re seeing a disconnect between demand and infrastructure,” said Paul Ruppert, chair of the Interstate Natural Gas Association of America (INGAA) and president at BHE GT&S, a Berkshire Hathaway company.

The growth in electricity demand provides a strong demonstration of need the commission requires in project applications, Ruppert said.

“Permit certainty will certainly help those projects to be on schedule and on budget, and I think that’s good for our customers, that’s good for the country,” he said.

On Thursday, INGAA welcomed the new members in a statement.

“As an independent agency, FERC works best when it has a full complement of five commissioners to provide the regulatory certainty necessary for investment in America’s energy infrastructure,” the group said.