American Oil and Gas Reporter - January 2021 - 21

FERC's Future Majority
Likely To Look At Decisions,
Through Climate Lens
FERC begins a new era in 2021. Yes, it is likely to remain a
forum for diverging opinions on whether and how to certificate
natural gas pipelines. However, with the election of Joe Biden,
the dissents of Commissioner Rich Glick now may make up the
majority opinion. Although Republican-occupied seats may
remain at three until Commissioner Neil Chatterjee's term
expires in June 2021, the future will see Democrats nominate
three of the five seats and hold the commission's chair. That position amounts to more than one additional vote, because that
person controls the agenda, and the last open meeting of 2020
suggests that change is afoot.
At the Dec. 17 open meeting, newly sworn-in Commissioner
Allison Clements participated but did not vote. Meanwhile,
Mark Christie was scheduled to have taken his oath of office on
Jan. 4, 2021. It may be a foregone conclusion by the time this is
published, but it is unclear whether Chairman James Danly will
remain as a commissioner once Biden names a new chairman.
The next open meeting takes place on Jan. 19, with the
inauguration on Jan. 20.
Danly may chair this meeting and remain a voting member
of the agency. However, experience with other federal agencies,
such as the Federal Communications Commission, demonstrates
that a Republican chair can resign, which would give Biden an
earlier opportunity to nominate a third Democratic commissioner,
even if there is some lag before a new nominee clears. It is safe
to say that a Democratic chair-Glick or Clements-will preside
over the February open meeting. What might this party split
mean to an agency that, for decades until recently, avoided
partisan politics?
It is critical to note that Glick's perspective does not dictate
how two additional Democratic commissioners-with one of
those three serving as chair-will vote. However, it is likely
Clements-possibly Chairman Clements-will focus on the
upstream and downstream impacts of proposed natural gas
pipeline projects. Glick's consistent dissents have provided a
clear voice for those skeptical of new natural gas infrastructure.
Under the Biden administration, a possible Chairman Glick
could guide FERC policy in a direction that would place a decidedly higher threshold on pipelines' certificate applications.
A look at the Dec. 17 meeting provides a possible preview.
Glick dissented on seven of that meeting's cases, and did not
limit those dissents to pipeline certificate matters. In an order
involving the California Independent System Operator (CAISO),
Commissioner Glick's dissent pointed to " the series of unprecedented wildfires that have burned across the western
United States . . . " that " reliability in the face of climate change
is going to require more and more of this commission's time
and resources. "
Glick advocated deference to CAISO and its California state
counterparts to identify solutions, rather than the proposal
approved in a 2-1 vote finding that " CAISO's existing tariff
may be inadequate to ensure that sufficient resources are
available to meet load and maintain system reliability. " A federal

" Under the Biden administration, a
possible Chairman Glick could guide FERC
policy in a direction that would place a
decidedly higher threshold on pipelines'
certificate applications.

versus state mindset does not necessarily align with Democratic
versus Republican viewpoints, but during his time as the commission's lone Democrat, Glick largely has focused on climate
change.
Glick's dissent also affects the oil market, such as with the
Dec. 17 vote on the five-year oil pipeline price index. What
Danly and Chattergee viewed as appropriate allowances, Glick
viewed as abandoning FERC's " well-established practice of
updating the index. " The majority opinion deemed the potential
cost increase acceptable; Glick did not.
The role of the minority differs from that of the majority, so
it is premature to assume Glick's dissents eventually will hold
sway under a Democratic majority. Nevertheless, it appears
safe to say that a Democratic majority will place a greater
emphasis on climate change as factor in its decisions.
Republicans and Democrats both can agree on the importance
of an agency in which all five commissioner seats are filled,
which has not been the case since summer 2018. The majority
of FERC decisions are bipartisan and move quickly on the
consent agenda. Even substantive decisions can move beyond
party lines. At the December meeting, FERC voted unanimously
on a proposal aimed at increasing " confidence in the accuracy
and reliability of wholesale natural gas prices by revising
FERC's Policy Statement on Natural Gas and Electric Price
Indices to encourage market participants to report transactions
to price index developers and to provide greater transparency
into the natural gas price formation process. "
A Glick- or Clements-chaired FERC will look dramatically
different. When will this change occur, and will the politics of
climate change allow new approvals for infrastructure?
r

SUSAN GINSBERG is a con-

sultant with North Mansion
Analytics LLC. Before that, she
was vice president of crude oil
and natural gas regulatory
affairs for the Independent
Petroleum Association of America. She covers legislation and
regulation, focusing on the
CFTC and FERC.
JANUARY 2021 21

American Oil and Gas Reporter - January 2021

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