North American Oil & Gas Pipelines

FEB 2017

North American Oil & Gas Pipelines covers the news shaping the business of oil and gas pipeline construction and maintenance in North America, including pipeline installation methods, integrity management innovations and managerial strategies.

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napipelines.com FEBRUARY 2017 | North American Oil & Gas Pipelines 19 the United States would be best served by denying TransCanada a presidential permit for the Keystone XL pipeline." In contrast, Tillerson will likely approve the new Presidential Permit application by Keystone XL. SECRETARY OF TRANSPORTATION The Secretary of Transportation over- sees 10 administrations, including the Pipeline Hazardous Materials Safety Administration (PHMSA). "PHMSA's mission is to protect people and the en- vironment by advancing the safe trans- portation of energy and other hazard- ous materials that are essential to our daily lives. The PHMSA administrator is chiefly responsible for the development and enforcement of regulations for the safe operation of the nation's 2.6 million miles of the gas and liquid pipeline trans- portation system. Nominee: Elaine Chou (63) was born in Taiwan, where her parents fled after the Communists took over main- land China in 1949. As a child, her fam- ily moved to the United States. Chou earned a bachelor's in Economics from Mount Holyoke College and an MBA from Harvard University. Married to Sen- ate Majority Leader Mitch McConnell, she was previously Secretary of Labor under President George W. Bush and Deputy Secretary of Transportation un- der President George H.W. Bush. Chou would replace Anthony Foxx (45). A re- placement for current PHMSA Adminis- trator Marie Therese Dominguez has not yet been nominated. Projection: Expect much of Chou's attention to be focused on the new president's anticipated trillion-dollar in- frastructure initiative. More about the fu- ture of PHMSA will likely become known once the new administrator is nominat- ed and confirmed. ASSISTANT SECRETARY OF THE ARMY (CIVIL WORKS) The Army Corps of Engineers' mission and vision is to "[d]eliver vital public and military engineering services; partnering in peace and war to strengthen our Nation's security, energize the economy and reduce risks from disasters." The Corps oversees U.S. waterways and plays a significant role in the construction of energy projects. There is a Commanding General of the Corps, but the Assistant Secretary of the Army (Civil Works) oversees the civil func- tions of Corps and ultimately reports to the Secretary of the Army. The current As- sistant Secretary of the Army (Civil Works), Jo-Ellen Darcy, received a BS in Philosophy and Sociology and a MS in Resource Devel- opment from Michigan State. Nominee: To be determined. Projection: Based on an Environmen- tal Assessment finding of no significant environmental impacts, the Corps on July 25, 2016, issued the Dakota Access Pipeline (DAPL) permission to cross Lake Oahe in North Dakota. Four months later, on Dec. 4, Darcy issued a "memorandum" incon- gruously 1.) confirming that permission was properly issued, but 2.) determining that issuance of the right of way (under the Mineral Leasing Act) to cross under Lake Oahe requires "more rigorous ex- ploration and evaluation of reasonable siting alternatives, and greater public and tribal participation and comments," and therefore directing that an Environmental Impact Statement be prepared to address alternatives. The new president supports completion of the $3.8 billion oil pipeline and signed an executive order on Jan. 24 to revive the project. ADMINISTRATOR OF THE ENVIRONMENTAL PROTECTION ADMINISTRATION EPA's "mission is to protect human health and the environment." EPA imple- ments environmental statutes by writing regulations, setting national standards that the various states and tribes enforce through their own regulations, and en- forcing compliance with the regulations. Chief among EPA's priorities, and certainly the most visible over the last several years, has been addressing climate change, most notably by issuing the Clean Power Plan, which discourages fossil fuel electric gen- eration and encourages renewable energy. Nominee: Scott Pruitt (48) grew up in Kentucky, where he was a standout baseball player. After college, he received a law degree from the University of Tulsa; was elected to the state Senate, became General Managing Partner of the Okla- homa RedHawks, triple-A baseball club and most recently the Oklahoma Attor- ney General. Along with more than half of the country's state attorneys general, he sued EPA over the Clean Power Plan. Pruitt would replace Gina McCarthy (63), a life- time civil servant who has led the charge on President Obama's global warming and climate change initiatives. Projection: Trump has promised that during his administration EPA would return to its central mission of ensur- ing clean air and water, as opposed to a current, more expansive agenda that promotes renewable energy and battles climate change. Pruitt, who has stated that the climate change debate is not yet settled, would seem a good fit for Trump's agenda and will likely be a lightning rod during the confirmation process and be- yond. Pruitt will not support the rules and regulations of the Clean Power Plan, but that doesn't mean that he will eviscerate the regulations. The energy industry has been moving away from coal-fired genera- tion and toward more natural gas and re- newable generation. The Clean Power Plan just accelerated the transition. All Pruitt needs to do is extend the "glide path" for compliance and let the market place sort things out. CHAIRMAN AND COMMISSIONERS AT FEDERAL ENERGY REGULATORY COMMISSION FERC is an independent agency under the DOE, and its mission is to "[a]ssist con- sumers in obtaining reliable, efficient and sustainable energy services at a reasonable cost through appropriate regulatory and market means." Among other things, FERC regulates the construction, operation, and rates of interstate natural gas pipelines, the rates of oil pipelines, and proposals to build liquefied natural gas (LNG) terminals. Nominee: Cheryl LaFleur was named acting chairman on Jan. 25, but additional commissioners are still to be determined. Projection: New natural gas pipelines are needed to address changes in key produc- tion areas resulting from the shale revolu- tion and to replace aging pipelines. Under the Obama administration, it took on av- erage 429 days for FERC to authorize con- struction of a new natural gas pipeline. That's 70 days longer than it took in 2013, according to a Bloomberg report. Expedit- ing infrastructure projects is a priority of the new president, but first he needs to make some appointments. The commissioners, like cabinet mem- bers, are appointed and then confirmed by the Senate. By law, the president des- ignates the FERC chairman, and no more than three of the five commissioners can be from the same political party. Under normal circumstances, the chairman and two commissioners would be Republicans. However, current circumstances are any- thing but normal. There are lots of rumors. I'm going to take Stengel's advice and not make any predictions about FERC. Washington Watch is a bimonthly report on the oil and gas pipeline regulatory landscape. Steve Weiler is partner at Stinson Leonard Street LLP in Washing- ton, D.C. Contact him at steve.weiler@ stinson.com.

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