General Counsel Report

APGA's General Counsel, John Gregg of McCarter & English, prepares this weekly report to highlight the industry news for public natural gas professionals.

December 13, 2018

Climate Controversy Ratchets Up as McNamee Confirmed for FERC
When Bernard McNamee was confirmed to be commissioner at the Federal Energy Regulatory Commission by a 50-49 vote, along party lines, no less than pro-coal Sen. Joe Manchin, D-W.Va., had withdrawn his support over McNamee’s skepticism over man-made climate change (even though he voted for him in committee). And even before he was sworn in, the Harvard Electricity Law Initiative, an independent policy organization within Harvard Law School, filed a brief saying he must be disqualified from any FERC proceedings to decide whether special rates for electricity generators deemed to be “fuel-secure,” such as coal or nuclear plants, are just and reasonable, since he essentially decided that issue in helping the DOE craft the NOPR.

At the very same time, the Environmental Protection Agency's rolled back Obama-era coal plant carbon dioxide emission regulations—a move seen as being made to help the struggling industry. The action suggests that the Administration is considering how to challenge or circumvent the 2009 finding that CO2 endangers human health. The rules set in 2015 were for CO2 emissions standards for new or modified coal-fired steam generating units and determined that the best system for reducing emissions from those types of facilities is carbon capture and sequestration, or CCS. Now EPA has increased the emissions limit from 1,400 pounds of CO2 per megawatt-hour to 1,900 pounds per MWh, and changed the official best system of emissions reduction from CCS to the most efficient production method "in combination with the best operating practices." Also at the same time, the Energy Information Administration said that U.S. coal consumption in 2018 is expected to be the lowest in 39 years.

U.S. Liquefied Natural Gas Export Capacity To More Than Double By The End Of 2019
EIA projects that U.S. liquefied natural gas (LNG) export capacity will reach 8.9 Bcf/d by the end of 2019, making it the third largest in the world behind Australia and Qatar. Currently, U.S. LNG export capacity stands at 3.6 Bcf/d, and it is expected to end the year at 4.9 Bcf/d as two new liquefaction units (called trains) become operational.

Next CFTC Chair to Come from Treasury
Current CFTC Chairman Christopher Giancarlo’s term expires in April 2019, he has said he would not seek a second term and would stay on until the new chairman has been confirmed. This week President Donald Trump announced the nomination of Treasury Department official Heath Tarbert to serve as commissioner and the next chairman. Giancarlo, in a statement, said the White House had made a “superb choice,” and that Talbert “will be well suited to continue the work of transitioning the CFTC into a 21st Century digital regulator that balances concerns over systemic stability with market vibrancy to support strong economic growth and American prosperity.”

Cleaner Air Measured By Decrease In Coal-Fired Electricity
The Department of Energy has noted that annual U.S. electric power industry emissions of sulfur dioxide (SO2) and nitrogen oxides (NOx) have declined by 88% and 76%, respectively, between 1997 and 2017. During this period, coal-fired generation was responsible for 90% of SO2 emissions and 76% of NOx emissions from the U.S. electric power industry. Coal-fired generation for electric power peaked in 2007 at 2,016 MWh and declined to 1,206 million MWh by 2017. The decline has been driven by increased competition from natural gas and renewable generation, along with environmental regulations that mainly affected coal-fired generators. Coal accounted for more than 50% of U.S. electricity generation in 1997, and natural gas and renewables together accounted for 26% of generation. By 2017, coal-fired generation had declined to 30% of electricity generation while generation from natural gas and renewables grew to nearly 50% of electric power industry generation

Manchin Get Minority Ranking Member Post On Senate Energy Committee
Senate Democrats tapped Senator Joe Manchin of West Virginia to be ranking member on the Senate Energy and Natural Resources Committee in the next Congress, in a move that could give a louder voice to coal, and oil and gas interests on the Democratic side of the aisle. The current ranking member, Maria Cantwell of Washington, has been an outspoken critic of administration efforts to support struggling coal-fired units, slamming such attempts as an expensive “bailout” that could leave ratepayers holding the bill.

EPA Finalizes 2019 RFS Requirements
The Renewable Fuel Standard (RFS) is a federal program that requires transportation fuel sold in the United States to contain a minimum volume of renewable fuels. The U.S. EPA has finalized requirements for the RFS Program for 2019. Of importance to natural gas advocates, the EPA set a 2019 level of 418 million gallons for cellulosic biofuel and indicated it expects renewable natural gas to account for 399 million gallons. This 2019 figure represents a significant increase from the 288 million gallons required for 2018. EPA’s notice also indicated that it expects renewable natural gas producers will supply 309 million ethanol equivalent gallons in 2018. At these levels, NGVAmerica expects renewable nature gas to account for about 37 %of all on-road natural gas consumed in 2018.

View past reports here.