FERC and the Regulatory Trap

By Citizen Sane (John Trallo) Reposted with permission 

The oil and gas industry, as they work towards turning North America into a 'third-world' style extraction colony, is now in the process of expanding their pipeline infrastructure on an unprecedented scale. The agency that is trusted with overseeing and permitting this infrastructure is the Federal Energy Regulatory Commission (aka: FERC), but really their job is to issue permits. Although they are obligated by law to allow 'public input' and consider public comments before making their decision to issue a permit, at the end of the day, public opinion carries no weight and has never influenced their decision, or caused them to deny a permit. NEVER.

Here's why: You may or may not be aware that FERC is NOT really a government agency, anymore than say, the Federal Reserve Bank is. Just because they have the word "Federal" in their name does not mean they're the government. Where I grew up in Philadelphia, there is a soft pretzel maker called "The Federal Baking Company," and they weren't a government agency either.

FERC logoThe truth is, FERC is a private entity largely funded by the API and ANGA, and chaired in part by former oil and gas  representatives, that is licensed by the US Department of Energy to issue permits. Their job is to see that every application meets the minimum criteria to justify approval.

I learned this when I registered as an "intervener" in the Inergy/CNYOG Marc-1 pipeline project in Northeast Pennsylvania. CNYOG (Central New York Oil and Gas) is a division of Inergy Midstream, L.P., which merged with Crestwood Midstream in 2013, and now both are identified as Crestwood Equity Partners, L.P. This is the company that wants to install an underground gas storage facility in abandoned salt mines under Seneca Lake in New York.

The short version of my experience is as follows.

The Marc-1 pipeline is a 39-mile connecting hub (now constructed) between the Tennessee and the Transco pipelines. It involved the clear cutting of approximately 650 acres of greenfield forest, the removal of approximately 250,000 trees (many old growth), disturbance of protected wildlife habitat, 122 sensitive HV/EQ (High Value/Exceptional Quality) stream crossings, and intrusion onto 104 private properties.

Myself, and other concerned citizens launched a massive campaign to stop the Marc-1. We submitted 22,093 signatures opposing the project, in addition to a bi-partisan coalition of 35 Pennsylvania State Representatives and two State Senators. Even the EPA stepped in and declared the project unnecessary, since the natural gas in the region was already being moved to market via the Tennessee and the Transco.

After we effectively stalled the project for 18 months by demanding justification for the project, environmental impact statements, and concerns about eminent domain abuse, etc., the three Sullivan County, PA Commissioners, along with a few U.S. congressmen with no connection to Pennsylvania, asked FERC to "overlook the localized concerns," and expeditiously approve the project.

FERC issued a pre-vetted statement thanking everyone for being involved and expressing their heartfelt thoughts and concerns, assured all property owners that eminent domain would "only be used as a last resort"– and only if all negotiations between CNYOG and the landowners failed – and approved the project. All of which was done "class one," which means minimum safety standards, and no local, state, or federal oversight.

The very next day, eminent domain was filed against 89 of the private landowners, most of which were never previously notified of a proposed Right-of-Way on their property, or had the chance to negotiate terms. All 89 property owners went to court, and all 89 lost.

In FERC's history, they have NEVER denied a permit for any oil and gas infrastructure project unless the operator withdrew the application. The FERC regulatory/permitting process is designed and orchestrated to render public opinion meaningless, ineffective, and destined to fail.

Here's why: The regulatory system is stacked. (See this link for a deeper explanation.) It's important for people to understand that the "regulatory system" is designed only to regulate the rate of damage to public health and the environment, not to prevent damage. Hence the terms, "necessary sacrifice" and "unintended consequences."

That is not to say that citizens should not get involved with the FERC regulatory process. You should, to get on record. You just have to also act outside the FERC process on the local municipality level to zone it out, or make it too expensive for the operator.

The ideal way to stop pipelines is by establishing a Community Bill of Rights that essentially "zones out" this kind of activity, or restricts it and establishes safety standards and set-backs in such a way that it is no longer economically worthwhile for an operator to build. The concept of a Community Bill of Rights has been championed by CELDF (the Community Environmental Legal Defense Fund), a non-profit, public interest law firm providing free and affordable legal services to communities facing threats to their local environment and quality of life. CELDF has assisted more than 150 communities across the country to establish such ordinances.

Myself, along with other members of the Shale Justice Coalition are now working with communities along the 176-mile path of the proposed Atlantic Sunrise Pipeline Project by Williams Midstream. So far, we've gotten three municipalities to begin enacting community bill of rights ordinances. 

Now, the industry, and most local solicitors, will claim that these ordinances "will be challenged, inspire law suits, and be overturned," however, in the communities in PA, TX, LA, where Community Bills of Rights have been established, this has not happened. The reason is that the ordinance brings into question "corporate personhood:" Under the Constitution all people [persons] are equal under the law, which means that no "person" can claim to have more rights than another, and the rights of one can not take precedent over the rights of another. The legal challenge to corporate personhood would mean that if any corporation were indeed a "person," then they would have to explain why they believe that they have more rights, or why their rights should matter more than actual citizens. 

And that is a can of worms that industry does NOT want to risk opening.