The Exchanges

Q Yeah, the DOE piece is fascinating. So, so first, let's just talk about FERC. Critics call FERC a rubber stamp for these projects. Why?

A Yeah, that, that accusation of FERC being a rubber stamp for the fossil industry, fossil fuel industry, uh, is repeated a lot, and part of that comes from the fact that FERC has only ever rejected one LNG export proposal, the Jordan Cove project in Oregon, uh, because it didn't meet the, uh, commission standards, and notably Jordan Cove was never built, but that's not because of FERC. FERC ultimately did go back and approve the project. Um, it was, um, It ended up being canceled because of opposition at the state level. However, environmental groups keep challenging FERC's approvals of these LNG projects, mostly under the National Environmental Policy Act. Federal courts keep on finding that FERC needs to evaluate these projects' climate and environmental justice impacts a lot more thoroughly than it has been.

AI assessment note: “part of that comes from the fact that FERC has only ever rejected one LNG export proposal”

Q more question on FERC. So, Nicole, there was, there were some attempts, some proposed changes to factor in the climate cost to infrastructure within FERC, and there was a bunch of backlash from Republicans and also from Democratic Senator Joe Manchin, and that backlash caused FERC to step back from scrutinizing LNG, the climate impact of LNG proposals. How did that play out, and how has that impacted the commission?

A I said this already, but I think it's important to repeat. Um, so FERC is an independent agency, which means that it's a little bit insulated from pressure from the administration directly, but importantly, it's still subject to political pressure, particularly from Congress, which has to approve people who are nominated to the commission. Almost two years ago now, um, Richard Glick, who was the chairman of FERC at the time, um, and the two other Democrats on the commission, uh, voted to adopt a policy that would basically Put more scrutiny on the greenhouse gas emissions and environmental justice impacts, um, from LNG projects and a lot of other gas projects as well. Um, and they basically said that that was to make sure that FERC's decisions were holding up better in court, uh, amid all of these challenges that FERC kept losing. Uh, and that really didn't go over very well. Um, Republicans and also, uh, Joe Manchin, the Democrat, Democratic Senator from West Virginia, uh, were not happy. And the timing was terrible because it happened about a week before Russia invaded Ukraine, which then put LNG in a huge global and national spotlight, often very positively, at least for a while. So, ultimately, Manchin refused to vote for Biden's renomination of Glick to the commission, um, and Glick ended up having to leave at the end of Since then, his seat still hasn't been filled. So FE…

AI assessment note: “Manchin refused to vote for Biden's renomination of Glick to the commission”

Q and emissions impact, but this is putting the administration in a really tough spot right now, so maybe we can just step back More broadly and talk about how this is starting to complicate the way the administration thinks about climate change or complicate its messaging on climate change. So what did you find as you, you dug into this really difficult position this is now putting the administration in?

A So the Biden administration has made a lot of indisputable progress when it comes to accelerating renewable energy production and renewable energy development in the U.S. and also globally, but we haven't seen that happening in the same way when it comes to putting pressure in the other direction, which is curtailing the use of fossil fuels. Um, on LNG in particular, what we've seen is that the Biden administration has Pretty much stuck to the precedent that was set during the Obama administration, and then maintained and even increased during the Trump administration, um, on just supporting exports, promoting exports, uh, promoting the use of LNG around the world as a sort of reliable, uh, theoretically lower-emitting fuel. Today, uh, what we're seeing with the Biden administration is that even the impact studies that it's using, specifically that the DOE is using to inform its decisions, were Completed when Trump was in office, um, and don't necessarily align with the data that we have today. And that's significant because, uh, about 10% of all of the natural gas produced in the U.S. is exported, and any one of these facilities can process several percent of all of the consumer grade natural gas produced in the U.S. and ship it out around the world. And if you think about that, Uh, with eight facilities already operational and more expected to come online in the coming years,…

AI assessment note: “accelerating renewable energy production... but we haven't seen that happening in the same way”

Q lie more within the Department of Energy Because, um, they have this standard of deciding whether an LNG project can go forward depending on the public interest, and they can factor cost, the impacts to markets and consumers, and then there's this hope that they will actually start factoring in climate change. So, Nicole, when we talk about, uh, DOE's evaluation of the public interest, what does that actually mean?

A Well, so far, it has basically meant, uh, that projects won't do huge, uh, Localized environmental or national economic damage. Um, a lot of FERC's and DOE's critics have said that even those analyses don't go far enough, and sometimes don't factor in all of the harms that are, that, that result from these projects. But the idea, at least right now, is that, uh, if a project isn't going to have some sort of, like, Ripple effect through the US economy, it's probably fine. The Sierra Club and some other environmental groups petitioned the DOE a long time ago now to reassess how it was evaluating the price and climate impacts of LNG exports, and the DOE finally actually replied to that this year. Um, and what it did was pretty much stick to the position that it's had for a long time. Uh, which is that the, the market is the best way to allocate natural gas supplies, and it doesn't want to step in and influence that too much, as long as there's not evidence that something drastic is going to happen. And so, there's this view among a lot of people who are really familiar with the, the, the authority that these agencies have, that they actually have a lot of leeway if they want to use it, and even the DOE kind of acknowledged that in its response to this petition. But nobody knows exactly how much leeway they have because they've never really chosen to use it.

AI assessment note: “so far, it has basically meant, uh, that projects won't do huge”