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DCA Insights

DCA Insights

November/December 2017

Friday, December 15, 2017

DCA Educates Key Senate Offices on Need for Pipeline Permit Reform


In its second 2017 Washington Fly-in, an impressive number of DCA members took to Capitol Hill to educate on the need to reform and update the permitting process for natural gas pipelines. As reported previously, the House passed the Promoting Interagency Coordination for Review of Natural Gas Pipelines Act (HR 2910) in June. The bill would strengthen the role of the Federal Energy Regulatory Commission (FERC) as the lead agency to approve natural gas projects subject to the environmental law.

While passing pipeline permit reform legislation in the House has been achieved several times over the past several years, getting any action or even real attention to the issue in the U.S. Senate has been challenging. DCA and many allies in the energy industry and general business community lobbied hard for passage of HR 2910 while encouraging Senate leaders to take action on the permit reform issue. We were thrilled to see the introduction of the companion senate bill (S 1844) introduced by Sens. Jim Inhofe (R-Okla.) and Angus King (I-Maine) in September.

In addition to confirming FERC as the lead agency in pipeline permit reviews, this bipartisan bill would encourage “concurrent review” of permit applications by other federal and state agencies involved in reviewing pipeline applications, which should improve and expedite the process. Under S 1844, federal authorizations, typically in the form of permits, would be completed no later than 90 days after FERC completes its National Environmental Policy Act (NEPA) review.

Permit reform legislation has enjoyed bipartisan support over the years, and DCA was pleased to see 14 Democrats vote in favor of passing the House bill over the summer. Coordinating with industry allies prior to the November fly-in event, DCA focused on Democratic senators who serve on the Energy and Natural Resources (ENR) Committee and Environment and Public Works (EPW) Committee, two key panels with jurisdiction over issues relating to pipeline siting and environmental protection. Because of exceptionally strong turnout, the 15 fly-in participants split up into two teams, allowing DCA to sit down with staff from virtually every Democratic senator on both the ENR and EPW committees.

Soon after its introduction, DCA sent a letter of support of S 1844 stating that reforms are needed in the permit process despite the overwhelming opportunities offered by the natural gas boom of recent years. “The rising demand for expanded natural gas distribution systems underscores the need for expanded interstate transmission pipeline capacity in order to deliver that energy to local markets,” the DCA letter states. “Unfortunately, important pipeline projects are often mired with extended reviews while acquiring federal and state permits, grants of rights-of-way and approvals from various federal, state and local agencies. These delays often result in missed in-service dates and increased project costs, and hamper the vast economic benefits that accompany pipeline construction.”

Armed with that letter, DCA packed the day with Senate visits before sitting down for dinner at the Capitol Hill Club, where the group was joined by representatives of the American Petroleum Institute (API) for a post-mortem discussion about the days visits and other issues of interest. 

Establishing timelines for permit reviews will help cut through red tape in a way that can update the process while not compromising environmental standards in any way, and DCA will continue to push for passage of the bill in the second session of the 115th Congress next year. Selling the virtues of pipeline infrastructure to some Democrats on the Senate side of Capitol Hill is not an easy task, and we thank those who flew in for this important event. DCA appreciates the dedication of its members who continue to step up to the plate. 

 

 

Justice Department Vows to Prosecute Criminal Activity by Pipeline Protesters

While updating the process of approving natural gas pipeline applications is the highest legislative priority of many pipeline and pro-energy advocates, when asked what the biggest problem facing the pipeline industry is, many of those advocates will tell you that the increasingly hostile community of pipeline protesters present the gravest concerns. After a string of high-profile attacks on natural gas and oil pipelines across the country, several lawmakers sent a letter to the attorney general (A.G.) in September asking for the Department of Justice (DOJ) to evaluate whether and how DOJ could investigate and prosecute criminal activity against energy infrastructure at the federal level. Because many of these crimes have impacted DCA members, the association would fully support this investigation.

The letter also asks for DOJ clarification on whether attacks against the nation’s energy infrastructure fall within the DOJ’s understanding of federal law, which defines “domestic terrorism” to include activities that “involve acts dangerous to human life that are a violation of the criminal laws of the United States or of any State” and that “appear to be intended to... influence the policy of a government by intimidation or coercion.”

The letter, signed by more than 80 House representatives, describes recent attempts by various activist groups to sabotage oil and gas pipeline transportation as “illegal and potentially fatal.” It directly references an October 11, 2016, incident where a coordinated group of protesters attempted to shut down five major cross-border oil pipelines by breaking into valve stations in remote locations in four states to unlock shut-off valves on each of the lines. This incident was one of many recent attempts by protesters to physically attack pipeline operations under the guise of “environmental protest.”

Lawmakers underscored the danger that comes with overzealous protests. “Damaging pipeline infrastructure poses multiple risks to humans and the environment,” the letter stated. “When an individual burns a hole through a pipeline currently in operation, there is a high probability this could ignite the contents, killing not only the perpetrator but other innocent victims. It also has the potential to cause property and environmental damage, as well as disrupt services to communities and consumers.” The letter goes on to point out that protecting rural and remote infrastructure across the country and maintaining safe and reliable energy infrastructure is a matter of national security.

Finally, lawmakers ask the A.G. for feedback as to whether:

- existing federal statutes such as the Patriot Act and Pipeline Safety Act adequately arm the DOJ to prosecute criminal activity against energy infrastructure at the federal level

- DOJ has taken any prosecutorial or investigative action against those involved with the highly publicized attempted sabotage of four major pipelines in different states last October

- DOJ intends to prosecute or investigate action of any individuals who knowingly and willfully damaged or destroyed interstate or international pipeline infrastructure

- if attacks against energy infrastructure, which threaten human life and are intended to intimidate and coerce policy changes, fall within DOJ’s understanding of “domestic terrorism.”

On Nov. 10th, DOJ pledged to prosecute protesters who damage pipelines and energy infrastructure, saying it was committed to vigorously prosecuting those who damage “critical energy infrastructure in violation of federal law.” The DOJ statement stopped short of saying whether it would investigate or prosecute the protesters who broke fences in four states last year and twisted shut valves on several pipelines importing crude oil from Canada that carry the equivalent of as much as 15 percent of U.S. daily oil consumption.

 

Conviction of Felony Criminal Mischief in Montana

On November 22, one of the activists involved with last fall’s notorious pipeline sabotage events in multiple states was found guilty of criminal mischief. Leonard Higgins of Portland, Oregon, was sentenced up to 10 years in prison and a $50,000 fine for breaking into a fenced site near Big Sandy, Montana during October 2016 and closing a valve on a pipeline carrying crude oil from Canada to the U.S. operated by Spectra Energy. Higgins claimed he was trying to call attention to climate change.

Because the issue of violent and criminal pipeline protesting is one that is hard to address legislatively, DCA applauds these lawmakers for doing what they can to hold these criminals accountable.

 

 

Senate Passes Tax Reform Measure, Conference Discussions Begin in Earnest

In the very early hours of December 2nd, the Senate passed legislation to overhaul the tax code, handing Republicans a badly needed legislative and political victory. Senators voted 51-49 to pass the measure, capping off several days of debate and hand-wringing as the Senate leadership worked furiously behind the scenes to win over holdouts and get the proposal across the finish line in the Senate. No Democratic senator supported the legislation, and most Democrats took off immediately after voting “no.” Sen. Bob Corker (R-Tenn.) was the only Republican to vote against the bill, citing concerns over the impact on the federal deficit.

The Senate bill would cut the corporate tax rate to 20 percent from 35 percent in 2019, and would provide temporary tax cuts for individuals that expire in 2026, among other provisions. The House passed its version on Nov. 16. Key players in Congress are now tasked with hammering out the differences between the two measures. Of interest to DCA, these differences include the following:

- The Senate bill doubles the exemption on the estate tax so that family businesses could pass up to $11 million of their assets down tax free, while the House bill entirely repeals the estate tax in 2024.

- Both the House and Senate bills drop the corporate rate to 20%. The Senate bill would enact a 20% corporate rate in 2019, while the House measure would implement the 20% corporate rate right away in 2018. Importantly, the corporate rate would be permanent
in both bills.

- The Senate bill repeals Obamacare’s individual mandate. The House bill does not.

- The House bill repealed the alternative minimum tax. The Senate bill retains it.

- The Senate bill “sunsets” tax breaks for individuals in 2025 in order to save money so the bill complies with Senate budget rules. The House bill makes its individual tax cuts permanent.

House and Senate lawmakers named to a conference committee are now working to develop a final bill to send to the president’s desk. Conferees are usually drawn from the committees of jurisdiction, with chairmen of the committees typically taking the lead roles. Both bills must be passed by both the House and Senate with identical language, under the same number. When the chambers pass different versions of a bill, they can agree to hold a conference where differences are hashed out in at least one public meeting as well as through closed-door negotiations.

 

Eben M. Wyman
eben@wymanassociates.net

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