Rule by administration
From FERC to Colorado’s attempt to use the insurance industry to increase GHG reporting, government finds it’s easier to rule by rule
In the last week of February, Senate Bill 138 was introduced in Colorado. You only need to see the summary of the first three sections of this bill to know the intent.
Section 1 of the bill requires each insurance company issued a certificate of authority to transact insurance business to prepare and file an annual report with the insurance commissioner providing a climate-risk assessment for the insurance company's investment portfolio from the previous 12 months. The commissioner of insurance is required to post the reports on the division of insurance's website.
Section 2 requires the board of trustees of the public employees' retirement association (PERA board) to prepare a similar annual report and post it on the PERA board's website.
Section 3 updates the statewide greenhouse gas (GHG) emission reduction goals to add a 40% reduction goal for 2028 compared to 2005 GHG pollution levels and a 75% reduction goal for 2040 compared to 2005 GHG pollution levels.
Like the question “Have you always beat your spouse….?” It is the asking of the question that controls the narrative, not the answer. Increasingly, government has discovered that it’s easy to implement it’s mandates using private corporations: from Big Tech censorship on COVID, to media proliferation of an ultra pro Ukraine narrative to GHG reporting. Why debate in congress passing laws when you can create bureaucracy to manage it.
I re-read ‘The Fountainhead’ this weekend. The last time I read it I was 16. I forgot the term “second handers.” There are creators of wealth, and those that build systems to benefit from their creation. Bureaucracy is the later.
In a thoughtful two post series, Doug Sheridan talked about this, and the ramifications, in the context of FERC.
William Sherman served as general counsel for FERC from 1990 to 1993. He writes in the WSJ...
Over the years, various FERC orders and court cases have noted FERC’s long-standing goal to enhance natural gas service to the public to ensure the production of an adequate supply of natural gas at reasonable prices. This was done to reduce the country’s dependence on foreign oil and to solve environmental problems by greater use of clean and abundant domestic natural gas.
Every president, every FERC and every Congress have understood that the fundamental purpose of the Natural Gas Act of 1938 has been to encourage the development of plentiful supply of natural gas at reasonable prices—until Feb. 17, 2022, a week before Russia invaded Ukraine.
On that date, on a 3-2 partisan vote, FERC determined to prevent the construction of most, if not all, new natural-gas pipelines. Addressing and mitigating climate change is now FERC’s new fundamental mission. To do so, FERC usurped congressional authority, effectively rewrote the section of the Natural Gas Act that governs the pipeline-permitting process, and contorted the narrow holdings in a few court cases interpreting the National Environmental Policy Act of 1970.
FERC did this by issuing two related policy statements that impose Rube Goldberg-style complexity on the permitting process. No applicant knows what FERC will require it to submit when it files or amends an application. The policy statements are designed to inject unlimited uncertainty, opposition and cost into every step of the permitting process and make new pipelines virtually impossible to finance, permit and build.
With no new natural-gas pipelines being built, producers will see no new way to bring gas to market and will stop investing in new production, diminishing the role of natural gas in fueling the world.
FERC’s stated reason for taking natural gas out of the fuel-choice mix is that climate change “poses a severe threat to the nation’s security, economy, environment, and to the health of individual citizens.” With gas out of the picture, renewables would become the main short-term option available to meet new energy demand.
But only Congress has the legitimate authority to make these vital decisions. The way world events are unfolding, it is unfathomable that lawmakers would vote today—if they ever would—to enact or endorse FERC’s decisions.
Yet there may be hope. In an unusual step, FERC is scheduled to discuss these actions again at its public meeting this Thursday. That shows the commission is listening—a good sign. FERC must fully repeal or vacate these policy statements and start again.
Our Take: The current admin's plan to wring carbon-fuels from the US economy follows the same strategy carved out by the European Commission just a few years ago. Americans should understand that the crackup in Europe will be at our doorstep in short order if we travel this same course.
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Earlier this week, we highlighted William Scherman's article in the WSJ concerning the Federal Energy Regulatory Commission's vote in February to prevent the construction of most, if not all, new natural-gas pipelines. The proposed change made clear that addressing and mitigating climate change—not ensuring Americans have reliable access to affordable natural gas—is now FERC’s new fundamental mission.
To create the new policy, FERC usurped congressional authority, effectively rewrote the section of the Natural Gas Act that governs the pipeline-permitting process, and contorted the narrow holdings in a few court cases interpreting the National Environmental Policy Act of 1970. A total 21 state AG's filed comments opposing the new policy, arguing that FERC interfered with their jurisdiction over production and consumption of natural gas.
In an unusual move, FERC scheduled a meeting for today to address concerns over the proposal. It was quite the scene, apparently. In fact, based on the info we've received regarding the meeting, FERC Chairman Glick, in what was characterized to us as a "total face plant," retreated on both previous policy statements.
Specifically, FERC announced that the proposed policy changes, which had been designated effective retroactively to pending projects, are now "draft" policy statements that won't be effective until finalized. Another round of comments are due on April 25 and with reply comments scheduled for May 25. FERC will then have to digest all feedback and provide clarifications and revisions.
The upshot is that anything filed with FERC before any final policy statements go into affect will follow the old 1999 guidelines.
To Sum It Up 1: This is a big, if temporary, win for a US energy sector striving to keep natural gas prices low, even as LNG exports are poised to rise in an effort to assist Europe ween itself from Russian natural gas.
To Sum It Up 2: The commission's forced turnabout is seen by FERC watchers as hugely embarrassing for Democratic Commissioners and chair, who pushed through the proposed changes on a partisan vote. The reversal will also make it easier for parties to challenge the final policy in court.
To Sum It Up 3: Chairman Glick wants to be renominated for another term and hence must go through Sen. Joe Manchin's committee. Given that Manchin is reported to have admonished Glick recently to "do your damn job," it's reasonable to expect that the commissioners might prove better listeners this time around. Let's hope so—for everyone's sake.
It’s a brave new world, and one that is increasingly being governed from the shadows.
This Rule by Rule has been sidestepping the Legislature for years and is the main reason why I don't think term limits for our elected officials is a good idea. I term limits were put in place, the only people that will be consistent in our government will be the unelected bureaucrats running these agencies that are growing in strength, number and power. The Federal and probably most state bureaucrats can't be fired due to Union rules. This all needs to be changed, but it won't.
Terrance Tschatschula and I testified today against SB138 before the Senate Finance Committee. It is truly a Pandora’s box of potential mandates and regulations..we were definitely in the minority opinion Re Carbon. But, many testifying recommended rejection