The year 2021 will be remembered for many reasons, but for those in the energy sector, it will be memorialized as the year that energy policy became an existential issue.
No longer are the ebbs and flows of energy trends known only to the experts; the relationship among energy, our society, and our environment has firmly entered the public eye. Extreme weather events, fuel costs and shortages, power outages, pandemic disruptions, and political tensions have placed energy policy under a microscope. It is now an issue that will not escape the headlines again.
Increasingly, the realities of a lagging response to climate change are inescapable: from fossil fuel giants to solar start-ups, from small municipal utilities to large grid operators, a sense of urgency is palpable. There are countless new proposals to reduce carbon emissions and it’s no longer acceptable to ignore the risks involved with climate change.
While it is noteworthy to see this groundswell of interest, real progress will occur slowly. Sweeping, transformative change is virtually impossible given the intractable nature of energy systems in our lives. The substantial foundation of existing energy assets and investments in our country translates immediately into multiple arenas of vested stakeholders.
While this can be frustrating, it may be a blessing. It underscores the substantial role of our current energy system and the values of a democratic society. In our country, the voters, states, courts, consumers, utilities, regulatory agencies, local governments, corporations, and environmental and consumer groups all participate in energy policy decisions.
Energy Projects Stalled, Shut Down
We are simultaneously fortunate and burdened in our complex democratic system. Getting to yes is ever more a daunting task.
For example, consider the recent suspension of a $1 billion transmission project in Maine. Known as the New England Clean Energy Connect (NECEC), the 145-mile transmission line would carry 1,200 megawatts of clean Canadian hydropower to New England, with the ability to power 1 million homes.
Maine voters in November rejected the project in a referendum. The Maine DEP suspended the project’s permit after Gov. Janet Mills (D) ordered the construction halted.
The current outcome illustrates the profound influence of local voices in public decisions and how a pluralistic society can sometimes make it difficult to effect change. Utilities that both supported and opposed the project participated in the public discourse.
Environmental groups expressed concern about 53 miles of temperate forest that would have to be cleared for the transmission line. And, sadly, 400 local jobs were interrupted just before the holidays for those working directly on the project. An astounding $91 million was spent by all involved.
Undoubtedly, the legal dispute will play out fiercely in the courts and broader political and regulatory battlefields, as the developers have already filed a preliminary injunction to invalidate the referendum.
Conflicts Are Inevitable and Will Take Years to Resolve
Complex energy wars, such as the one unfolding in Maine, are common for energy infrastructure, and sometimes, there are geopolitical ramifications. Residents of Michigan are now very familiar with the Enbridge Line 5 pipeline, constructed in 1953 and operated by Canadian energy giant Enbridge. The pipeline, which runs under the Straits of Mackinac, transports 540,000 barrels of crude oil and natural gas liquids per day.
Last year, Michigan Gov. Gretchen Whitmer (D) ordered the pipeline closed by May over environmental and safety concerns. The dispute has festered until recently, when the Canadian government intervened and invoked a 1977 treaty barring both countries from shuttering international pipelines.The Biden administration is now involved with the Michigan imbroglio, with concerns over higher fuel prices for Americans in the region.
The ironies in energy policy are inevitably uncomfortable and embarrassing. The Maine and Michigan conflicts will likely take months or years to be resolved, and until they are, expect lawyers and other policy players to be busy. Even in cases when urgent intervention is needed to stave off the dramatic consequences of an energy dispute, legal processes must be followed.
Just before Labor Day in the early 1990’s, when I was representing the Public Service Commission of the District of Columbia, a power plant in Alexandria, Va., was abruptly scheduled to be permanently closed due to environmental objections by the city and Virginia. The plant provided power to a huge portion of Washington, D.C.
An emergency petition to prevent closure was filed with the DOE. It received executive attention almost immediately, and the plant continued to operate for several more years until it was closed in an orderly fashion.
Winston Churchill once said that democracy is the worst form of government except for all other forms of government. I recommend that quote to anyone who says our current process for achieving new energy initiatives should be foregone.
I am confident that while it is slow, frustrating, and cumbersome, progress in the march toward a clean energy future is being made. It takes time for public opinion to shift and for prevailing mindsets to change. As that transformation occurs, we must respect, appreciate, and not take for granted our magnificent country where all voices can be heard.
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owner.
Sheila Hollis is the acting executive director of the United States Energy Association and previously served as chairman of the USEA board of directors. She is also of counsel with Duane Morris LLP in Washington, D.C., and has spent her career in the areas of energy law and policy.