Manning Up - DOE Audit of FERC Calls for Transparency
It is no secret that environmentalists and activist landowners have tried to stop pipeline construction using both legal opposition and physical impediment. Recently, the two methods used in concert are proving successful. Not only are activists impeding construction by climbing trees on site, and tampering with facilities, they are claiming that the actions were necessary in court. This "necessity" defense is not novel but, in a novel turn of events, it was accepted twice in court in recent months. As a result, the pipeline industry may need to be concerned about growing civil disobedience. And following an audit by the Department of Energy, it appears that the federal government is now taking heed of activists' concerns as well. But will its proposed solutions for engagement prove beneficial to industry or exacerbate the issue?
Weighing Harm
Courts in both Massachusetts and Minnesota have accepted the necessity defense, which provides that criminal activity in pursuit of preventing greater harm may be warranted. In Massachusetts, activists sat in pipeline trenches in an effort to stall Spectra Energy's AIM construction, while in Minnesota, activists attempted to stop the flow of oil on Enbridge Energy's Line 3 project. (We've detailed other issues Enbridge has faced in its efforts to construct the project in ALJ Report on Line 3 Replacement: Need, Yes. Proposed Route, No.)
Concerns regarding an increase in the number of such incidents in an effort to prevent perceived harm are valid. But are individuals and organizations truly without another option to effectively voice concern ?
Federal Audit
The Department of Energy's Office of Inspector General (IG) recently provided insight into this issue by way of its May 24, 2018 Audit Report that reviewed the FERC's natural gas certification process. The Report reviewed the natural gas pipeline certification process in an effort to identify any areas where the process was not in accordance with applicable laws, regulations, policies, and procedures. The IG found that the FERC was completing the certification process with the appropriate due diligence and had" generally adhered to an internally established timeliness performance measure"in the absence of strict statutory or regulatory deadlines. Unfortunately, the report fails to cite any specific values and does not provide the data underlying its analysis. However, the areas which the Report identified as those that could be improved largely focused on engagement with the public.
The IG described the areas requiring improvement as "process transparency, public access to FERC records, tracking stakeholder comments, and data integrity." In practice, these four areas involve improvements to the materials provided to the public, as well as the access provided by FERC's eLibrary. While it is a publicly available system, it relies on docketing much like a court.
Currently, interested parties, including activists and landowners, are able to engage in the FERC's certification process by submitting comments as protestors or intervenors on the dockets detailing project review. These comments are reviewed as part of the notice and comment rulemaking procedure undertaken by FERC -- but those submitting comments have little insight into how much credence their claims were given in the final decision making. To make matters worse, the eLibrary is difficult to use, relies on legal jargon, and it is often inaccessible due to technical issues. At LawIQ, we acquire all FERC filings and provide all filings relevant to customers of our platform.
Activist Impact
Those filing comments are fighting an uphill battle and it's safe to say that they are not winning the war. The impact of comments on the duration of review is limited and circumstantial at best. While the number of comments filed by individuals have seemingly no correlation with project delay, there is some relationship between project timing and comments filed by major public interest groups, such as the Sierra Club and Riverkeeper. However, this impact is more likely caused by the interest groups' engagement in litigation outside of the FERC rather than any decisions made internally.
Whether or not improving process transparency and public access to information will make much impact on projects remains to be seen. Perhaps activists who feel more engaged with the process at the FERC will feel less inclined to physically impede construction. But with increased transparency and engagement comes the need for additional staffing. And if these resources fail to come through, it seems that pipeline developers will be staffing up with additional security and, of course, increased insurance coverage. Either way, it seems as if someone will be manning up.
Stay Ahead
LawIQ provides users with not only a count of the number of comments filed in protest for every project, but also a categorization of the entities involved. By leveraging our proprietary system, you are able to identify projects that are at risk of delay due to increased protestor participation, and, in particular, major public interest group litigation. Or you can prepare your outreach team by identifying areas where activists are greater in number.
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