Regulatory certainty for pipeline permitting would be a win-win for all

According to recent reports, investing giant Blackstone Group LP is seeking $10 billion to supplement its ambitious infrastructure investment fund. Overall the firm “expects to invest in more than $100 billion on infrastructure projects, principally in the United States.”

Blackstone President Tony James said recently the company’s infrastructure efforts will not be affected by whether the Trump administration enacts its $2 trillion infrastructure plan.

{mosads}Clearly, private investors see enormous potential in upgrading our nation’s roads, telecommunications systems, energy pipelines, and the many other infrastructure components that facilitate daily life.

With huge sums of capital in the balance, investors, along with private companies on the receiving end of investments, deserve a regulatory environment upon which they can rely.

Regarding energy pipeline infrastructure in particular, federal, state and local regulations are a critical component of the planning process, providing a framework that ensures these projects are carried out with minimal adverse impact on local communities. At the same time, unnecessary delays — often in the form of frivolous lawsuits, regulatory foot-dragging and even agency staffing shortages — can block construction for years, which means delaying American jobs and energy security. But safety and efficiency aren’t mutually exclusive in the infrastructure permitting process.

Ultimately, government must balance encouraging more public and private infrastructure investment while upholding safety standards. All infrastructure projects need regulation, but in order to ensure that private investment flourishes, our nation’s regulatory agencies must provide more regulatory certainty.

To get that certainty, a commissioner on the Federal Energy Regulatory Commission (FERC) Neil Chatterjee has argued that we need to speed up the pipeline permitting process because unnecessary delays drive away investment.

Chatterjee said, “Delays discourage investment in projects. If I were a financial investor or project sponsor, I want predictable cash flows and return, and would be reluctant to put my money toward a project for which there’s no predictable length of time for the regulatory review process.” Extended delays or meritless obstruction can send the wrong signal to an industry that wants to invest.

Rather, it’s time to cut back rules that unnecessarily encumber energy development. FERC demonstrated this goal in its recent approval of two pipeline projects held up in regulatory limbo, the Atlantic Coast Pipeline and the Mountain Valley Pipeline, allowing the investors to finally move forward with their plans. The regulatory agency lacked a quorum for six months until two commissioners were confirmed in August, resulting in a significant backlog of applications.

FERC, which regulates the construction and operation of electricity, natural gas, hydropower and other interstate projects, is like the umpire in this regulatory game. Umpires are responsible for enforcing the rules fairly and making expectations clear to all players. The regulators’ position is that of a fair arbiter, striving to provide the regulatory efficiency that responsible infrastructure investment requires, without sacrificing safety and compliance. 

American citizens win when energy companies bring well-paying jobs to small communities and American energy independence makes oil and natural gas more affordable for everyone.

Local economies and city and state governments win when increased energy sales bring higher tax revenues and better funding for community programs and education.

And yes, the environment wins when we are able to switch to cleaner energy products like natural gas, which has brought our nation’s CO2 emissions to a 30-year low, and to pipeline transportation which has significantly lower carbon footprints than the alternatives. 

In this era of political polarization, this kind of win-win outcome should be the goal for everyone involved. The alternative course of action, which some have called upon FERC to pursue, is to drastically alter the permitting process. This would cause gridlock and significant delays, jeopardizing projects by undermining private companies’ confidence in the system and undermining their willingness to invest billions.

Pipelines are an important investment in our country from which we can all benefit. While safety should remain a top priority, decisionmakers should make the rules of the game more consistent and clear. Enforcing the rules fairly will provide major benefits for all Americans through the development of our domestic energy resources.

Albert Wynn, a former Democratic member of the U.S House of Representatives representing the 4th district of Maryland, served on the House Energy and Commerce Committee. He currently acts as a strategic advisor to the Grow America’s Infrastructure Now (GAIN) coalition.