TRC's Lauren O'Donnell, VP of Oil and Gas, recently participated as a panelist at the Energy Bar Association Mid-Year Conference. Her presentation examined the differing perspectives of participants in natural gas infrastructure projects including regulators, landowners, pipeline companies and NGOs.
TRANSCRIPT
www.trcsolutions.com
Finding Balance ina Changing Landscape
Striking the Right Balance:Environmental Review of
Natural Gas Infrastructure Projects
Energy Bar Association Mid-Year Meeting November 4, 2014
These quotes represent the current climate for pipeline projects. Opposition groups develop and negative press appears well before these projects get to FERC—so they come with baggage. Is this perception or reality? What is the responsibility of the industry to address these concerns before they proliferate? How does FERC address these issues within the confines of its mission and responsibilities? Do stakeholders have a responsibility to constructively participate within the framework of the regulatory process?
The
Bala
ncin
g Ac
tREGULATORS
Pipelines &Customers
Regulatory certaintyA level playing fieldBetter federal/state
coordinationRecognition of the
way projects develop
Landowners& NGOs
More informationMore transparencyLocal controlRegional planningNational/global
energy strategy
3
Presenter
Presentation Notes
Role of the regulator, FERC, in particular is tough. FERC’s role is larger than the NEPA process, its just part of what needs to be balanced. But, the NEPA process is the venue used to air all stakeholder concerns, regarding of whether they are related to environmental impacts of the project. Gives industry sense of uncertainty in the process. Seeing earlier and more increased participation by national and local NGOs. Stakeholders feel information is being kept from them; industry is reluctant to release information prematurely. Both sides feel the other has the upper hand. More conflicts between state and FERC requirements, federal control leaves states feeling unable to adequately participate in and influence the review process Industry has to be responsive to the markets, “speed to market” is key. How does this mesh with the desire for regional and national energy strategies? Is FERC the right place for this discussion? FERC is reactive—analyzing application that come before them—it doesn’t set energy policy.
The
Bala
ncin
g Ac
t FERC Certificate Policy Statement• FERC determines whether the applicant has made efforts to eliminate or
minimize any adverse effects the project might have on the applicant’s existing customers, existing pipelines in the market and their captive customers, or landowners and communities affected by construction.
• FERC balances the evidence of public benefits to be achieved against the residual adverse effects. This is essentially an economic test.
NEPA• In evaluating alternatives, lead agencies may need to make difficult
judgments involving balancing one environmental value against another.(CEQ’s Forty Most Asked Questions)
Sierra Club• Increasing reliance on natural gas displaces the market for clean energy and
harms human health and the environment in places where production occurs. (Beyond Natural Gas Campaign)
Landowner• There are no benefits and a lot of risk
Balance is Matter of Perspective
4
Presenter
Presentation Notes
So is true balance possible? When I was at FERC I used to say the if everyone hates us equally, we must be striking the right balance. But balance is a matter of perspective: FERC says you weigh a project’s economic benefits against adverse impacts (mostly economic); NEPA says agencies need to evaluate the relative weights of different impacts (is it better to follow an existing ROW even if it crosses wetlands or a state park?); NGOs (not to pick on Sierra Club, but they have a defined “beyond natural gas” campaign), they want to see the balance shift from short-sighted and short term goals to wide-ranging, long-term goals; Lastly, Mrs. Smith feels that she is bearing all the risk and no reward, the appropriate balance is shifting all risk elsewhere (to someone else, to public land) or increasing the reward (higher easement payment, royalties, payments based on throughput) These are very disparate perspectives. Are there common goals?
The
Bala
ncin
g Ac
tEarning Trust,
Demonstrating Commitment• “Social License to Operate”—what does this mean?• Recognize that the playing field has changed
– shift from individual to regional impacts– multiple venues to raise issues
• Focus on outreach and education– proactive, responsive, transparent– actively engage NGOs, community leaders– emphasize stakeholder participation in the process– acknowledge limitations to processes
• Commit to community benefits– clear intent, tangible benefit– it’s not all about money
Presenter
Presentation Notes
Social License to Operate or S-L-O is an important catch phrase, developed in the mining industry. Dec. 2012 Forbes articles lists 3 key components to an SLO (http://www.forbes.com/sites/csr/2012/12/28/three-ways-to-secure-your-social-license-to-operate-in-2013/): 1. Be a social purpose leader (focus on both better social and business outcomes); 2. Give more control to local communities and stakeholders (have local stakeholders develop their own interpretation of how your corporate strategy ought to play out in their communities); and 3. Build partnerships with the right and the wrong NGOs (build relationships with the organizations that have the most contrary points of view). Ends with this statement: “There are many more elements to SLO but all are derived from the same principle: your stakeholders write your social license. …without an SLO, your company might very well be SOL.” All this is easier said than done in large part because it is a subjective concept, similar to “balance” FERC and other regulators are bound by the regulations, the agency mandates, and ex parte regulations. How do we develop our identity within the community, educate stakeholders, build relationships: must start with mutual trust. Interested to panelists thoughts on this concept.
