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API, Construction Sector Call For Fair Regulatory Process on Energy Infrastructure

The oil and gas industry and its organized labor allies in the construction sector believe the public is approaching the realization that the nation's energy infrastructure needs will only be met through a fair regulatory process at all levels of government, and predict obstacles to some critical projects will eventually be overcome.

Jack Gerard, CEO of the American Petroleum Institute (API), and Sean McGarvey, President of North America's Building Trades Unions (NABTU), also agreed that the issues facing both industries transcend partisan politics, even as energy has become a hot button issue in the race for the White House.

Some Opposition to Projects Is Simply NIMBY

Three days before New York asked FERC to investigate Constitution Pipeline LLC for allegedly cutting trees and taking other unauthorized actions to support the project, and its backers responded with an appeal and a lawsuit claiming state regulators were stonewalling (see Shale DailyMay 16), Gerard said it was critical that integrity be maintained in the permitting process for energy projects.

"In some instances, permitting is becoming more and more politicized, and that's very unfortunate," Gerard said at a luncheon last Friday at API's offices in Washington, DC. "The reality is, the greatest impact of all of this is on local consumers. Companies aren't able to bring affordable, reliable energy into an area, so they'll continue to pay more for it."

Gerard said federalism issues, as well as the relationship between the Federal Energy Regulatory Commission and the states, need to be analyzed, "but we also have to get the shrill politics out of it and begin to deal with facts and figures. [Constitution Pipeline] demonstrated that it will be safe and sound for the environment, and yet for whatever reason one person or place can reject it. There is a challenge there. We have to get the public involved, because it's the American consumer that's hurt at the end of the day."

Gerard added that the public needs to differentiate between not-in-my-backyard (NIMBY) opposition to energy infrastructure projects and bona fide opposition on environmental grounds.

"A lot of times the NIMBY approach masquerades as environmental protection, but it's just not the case," Gerard said, adding that he was struck by Interior Secretary Sally Jewell's comments earlier this month that the national "Keep It in the Ground" campaign was "naïve" (see Daily GPIMay 9). "There's a fundamental debate taking place across the country today. As time goes on and more of these debates occur, you're going to see more of the public get engaged. When they begin to better understand it's all tied to issues like infrastructure, you're going to see the debate moderate. There is going to be broader support."

According to Gerard, the controversial Keystone XL oil pipeline still enjoys support from more than 65% of the American public. "But you added one hurdle that kept it from being put in place. Now you've got all these states saying 'that should have been built.' The public is starting to get wise to some of that."

McGarvey said a "fair and consistent process" at the federal, state and local levels of government was needed to help energy infrastructure projects become reality.

"That's all that the [oil and gas] industry and, quite honestly, our industry are looking for," McGarvey said. He added that the administration of New York Gov. Andrew Cuomo in New York has created "a consistent nature to just denying any new energy infrastructure. That greatly aggravates the building trades, because that's our jobs and we're ratepayers there. We're paying those exorbitant rates for our energy costs when we know it could be done cheaper with sensible reliable safe infrastructure put in place to bring down energy costs for everyone.

"You can go state by state, and unfortunately in some of them there is politics involved [with energy infrastructure]. That's a pretty good precursor as to whether there's going to be a reasonable, sensible approach to energy in that state, as the overall country struggles for a national energy policy that makes sense. Right now there is a lot of power in those states, and they're deciding which projects are going to get built and which aren't."

Gerard said New York "might be an exception to the rule" in the debate over energy infrastructure.

"The challenges we're facing today on infrastructure are good challenges to have," Gerard said. "We need to build more because we're producing so much more domestically. We're going through a historic moment in our history as it relates to energy, where we're truly becoming the energy superpower.

"There's a reason OPEC [the Organization of the Petroleum Exporting Countries] has to meet as often as they do now to decide what role they're going to play in the global world. It's because of what's produced here. These infrastructure challenges are an outgrowth of a great success story."

'Not a Partisan Issue'

Gerard said the API is a non-partisan organization, and took issue with the perception that the oil and gas industry leans heavily toward supporting Republican candidates.

"We continue to outreach and educate any and everybody that will listen to us," Gerard said. "We do all of that on a non-partisan basis.

"There are a lot of assumptions that the energy industry is always with the GOP candidate. Not so. If you take a look at the debate between Sen. Bernie Sanders and Hillary Clinton, he keeps beating her up over the fact that there's a lot of support for her coming from the fossil fuel industry, specifically oil and gas. But we historically have not picked candidates."

He added that he recently had lunch with U.S. Sen. Heidi Heitkamp (D-ND), and that API stays in regular contact with the presidential campaigns for Clinton and Donald Trump, the presumptive Democratic and Republican nominees for president, respectively.

"The industry strongly supports Heidi," Gerard said. "We strongly support a number of Democrats. We try hard to remind people that energy is not a partisan issue. We're going to stay the course and do just what we do: educate on the energy issues, oil and gas specifically. And we'll engage both campaigns and continue to talk and educate [them] about the value of infrastructure."

Clean Power Plan: The 'Elephant in the Room'

Despite the U.S. Supreme Court’s recent decision (see Daily GPIFeb. 10) to temporarily block implementation of the Clean Power Plan (CPP), McGarvey called the rule the "elephant in the room." He warned that if the CPP is revived, some states -- especially New York and the New England states -- would be in danger of not meeting their goals for carbon emission reductions because of the recent retirement of several nuclear power plants.

"There is no way without those nuclear, zero-carbon emitters, coupled with new gas generation, that those states can meet their targets," McGarvey said. "It's not just the jobs associated with, or bringing down the energy costs for, the inhabitants of those areas -- you're talking about a violation of federal law, with these new EPA [Environmental Protection Agency] regulations on clean power. That throws the whole thing into a mix.

"Reasonable people have to sit down and come up with reasonable solutions that everybody can agree with in a bipartisan way to move the nation's energy infrastructure forward."

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