FERC Chairman Calls for Change

January 28th, 2010
NEW FERC LEADER IGNITES CHANGES
Jon Wellinghoff addresses LNG supply issues, greenhouse gas emissions at conference

By CASSANDRA PROFITA
The Daily Astorian

A new day is dawning for the Federal Energy Regulatory Commission.

The five-member board, which oversees liquefied natural gas development nationwide, has a new chairman as of last year, a new commissioner as of last month, and one vacant seat yet to be filled.

Last year, President Barack Obama named Commissioner Jon Well-inghoff FERC chairman, signaling a significant shift in the board's outlook.

At a conference for "green" professionals Tuesday, Wellinghoff said he would like FERC to consider the greenhouse gas emissions of new energy projects and their impact on climate change before granting approval, but he is waiting for the three votes he needs to make that a new policy.

Wellinghoff, an energy law specialist who has been a FERC commissioner since 2006, has voted against three of the last four LNG project applications that have come before his board.

With reports documenting 100 years' supply of domestic natural gas ready to be tapped in the U.S., Wellinghoff said, he questions the need for importing more gas from overseas. With improvements in energy efficiency and transmission, he said, he hopes the U.S. could stretch that 100-year supply of domestic gas and make it last 150 years.

Wellinghoff spoke at the Green Professionals Conference in Portland Tuesday, explaining the potential for new, green jobs in developing and improving renewable energy and energy efficiency in the U.S.

His talk focused on why more than 50 percent of the energy produced in the U.S. is wasted and how improvements in transmission can help recapture that energy and put it back on the grid. Building "smart grid" capabilities is key to maximizing energy efficiency, he said, citing several examples of how communication between the grid controllers and the end users could conserve power, save everyone money and improve the economy as a whole.

About 10 LNG opponents attended the conference, some with anti-LNG signs.

LNG opponent Monica Vaughn asked Wellinghoff during a question-and-answer session whether he could lead FERC to add another element to energy project permitting that would require the federal government to consider greenhouse gas emissions and their implications for climate change. She also thanked him for voting against LNG.

Wellinghoff said considering the additional emissions produced in super-cooling natural gas into a liquid overseas and transporting it to the U.S. would add to the environmental impacts of LNG.

"I believe it should be factored into the equation," he said, after telling her he's working toward the three votes he needs to make it a factor in FERC's decision-making process.

Before joining FERC, Wellinghoff worked in the private sector developing renewable energy and improving energy efficiency, and in the public sector provided legal counsel to federal and state boards. He also authored a renewable energy portfolio standard for the state of Nevada and helped design similar standards for six other states.

In his dissent on the Bradwood Landing application for a license to build an LNG terminal 25 miles east of Astoria on the Columbia River, Wellinghoff said he believed there were "reasonable alternatives" to the project, and it was, therefore, "not in the public interest" to grant a license. The alternatives, he said, were developing domestic natural gas infrastructure and renewable energy sources, which are "abundantly available" in the region, as well as being "more efficient, more reliable and environmentally preferable" to LNG. Finally, he said the local environmental impacts of the LNG terminal on water temperature in the Columbia River and juvenile fish "have not been fully or fairly evaluated."

Wellinghoff was the lone dissenting FERC vote on the Bradwood application, but two of the four other commissioners on the FERC board have since left their seats.

FERC Commissioner John Norris joined the board last month, after being nominated by President Obama and confirmed by the Senate for a term expiring in 2012. A fifth seat on the board is vacant.

Although Wellinghoff advocates for developing and improving distribution of more renewable energy, including biomass, he said natural gas has a big role to play as a bridge fuel to cleaner energy sources.

"I think natural gas is certainly the cleanest fossil fuel that we have and one that can serve as a bridge fuel," he said. "I see us having the ability to rely primarily on domestic natural gas to do that for the long foreseeable future."

Wellinghoff said his view of the need for LNG has changed substantially in the last three years, "in that we have seen clearly a significant increase in the availability of domestic natural gas resource."

New techniques for extracting gas from shale have increased the accessible domestic natural gas supply in the U.S. by more than 50 percent.

He said there might even be more natural gas than is being projected, as he hears coal companies getting nervous about canceled coal-fired power plants and cap-and-trade legislation are looking into ways they can make natural gas at their coal mines.

He said FERC has to issue a separate license for exporting LNG, and will look at the feasibility and environmental impacts of doing so.

"But really, if markets are such that it makes it a viable business case for somebody to liquefy domestic natural gas and send it someplace else, it's not FERC's role to stop somebody from doing that," he said. "I don't have the authority to say we shouldn't be exporting natural gas."

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