Binz Withdraws From Consideration For FERC Chairmanship

November 2013, Vol. 240 No. 11

Withdrawal of the nominee for the FERC chairmanship reflects the intensity of the political wars between the Democrats and Republicans in Washington, the ham-handedness of the Obama administration and miscues by Ron Binz, a former Colorado Public Utility Commission chairman.

The scuttlebutt is that Obama will turn to Colette Honorable, chairman of the Arkansas Public Service Commission, who was a candidate before the White House selected Binz. “Certainly that is the rumor running around,” said Dena Wiggins, a partner at the law firm of Ballard Spahr, who focuses on natural gas issues at FERC. Honorable has considerable pipeline background, serving on the Department of Transportation’s Technical Pipeline Safety Standards Committee and on the Pipeline Safety Task Force at the National Association of Regulatory Utility Commissioners.

The Binz bashing underlines the extreme partisanship in Congress, even in the calmer Senate, and its effect on issues, such as a nomination for the FERC chairmanship, which has never been controversial.

Binz pulled out because all Republicans and some Democrats on the Senate Energy and Natural Resources Committee were ready to vote against him, perceiving him as anti-coal and anti-natural gas. In effect, he was “too green,” though no greener than current Chairman Jon Wellinghoff, who was confirmed without nary a hitch as a commissioner in 2006 and elevated to the top job in 2011. The Interstate Natural Gas Association of America took no formal position on Binz, who had been quoted as saying natural gas would be a “dead end” by 2035 unless carbon capture and sequestration was a viable technology by then. At his confirmation hearings, he admitted the statement was poorly thought-out. But he didn’t deny saying it.

He tried to untangle himself from that rhetorical knot. He called natural gas “a great resource that is getting larger by the minute” and added more pipeline capacity is needed. That didn’t win him any votes with Republicans such as Sen. John Barrasso (R-WY) who said Binz’s views on carbon capture and sequestration were “very troubling.”

Many Republicans complained Binz was anti-coal, which is effectively beside the point since the FERC has no authority over the siting of coal plants, or over greenhouse gas environmental regulations requiring expensive mitigation technology for those plants. Had he been nominated to head the Environmental Protection Agency, that objection would have at least been in the ballpark.

Senate Energy and Natural Resources Committee Chairman Sen. Ron Wyden (D-OR) tried to convince his members that Binz’s thoughts on coal had no relevance to his nomination. He supported Binz even though the White House never sought his input on the nomination. That was perhaps a bit ham-handed of the Obama administration, which relied on the recommendation of Senate Majority Leader Harry Reid (D-NV),, some of whose former aides assisted environmental groups in lobbying for Binz. That lobbying, plus pressure by coal industry groups on Republicans to oppose Binz, was really unprecedented for a FERC nominee, given the agency is as backwater an independent regulatory organization as there is in the federal government.

Sen. Lisa Murkowski (R-AK), the committee’s top Republican, appeared to be more concerned with Binz’s perhaps incomplete disclosure to her in a private meeting about the lobbyists who were working for his nomination. Their past affiliations with Reid and alleged funding of the lobbying effort by an environmental group caused Murkowski to question how independent Binz would be as FERC chairman.

Murkowski’s concerns about Binz being beholden to Democrats and environmentalists were in part sparked by editorials in the Wall Street Journal which raised the possibility that FERC would become the next EPA, meaning an allegedly out-of-control regulator headed by the “most important and radical Obama nominee you’ve never heard of.” The Journal said Binz “doesn’t understand the difference between making laws and enforcing laws.”

The implication was that Binz would attempt to exceed FERC’s mandate by setting environmental policy. Murkowski indirectly echoed those concerns. “Based on my meeting last week with Mr. Binz and my due diligence, I regret that I must conclude that he lacks the temperament and judgment required of the leader of an independent commission and statutory CEO of an agency such as the FERC,” she said. “In addition, his conception of the role of regulation is not what we need at FERC right now. What is needed, now more than ever, is balance and independence.”

Railroads Complain Regulatory Agencies Impede Safety Improvements

Efforts by U.S. freight railroads to install a wireless safety system mandated by a 2008 law are being slowed by federal regulatory agencies. Leaders of two House committees sent a letter in August to Mignon Clyburn, acting chairwoman of the Federal Communications Commission (FCC), urging her to ease environmental review requirements for antennas railroads need to install as part of new positive train control (PTC) systems mandated by the 2008 Rail Safety Improvement Act (RSIA).

That letter followed testimony by Edward Hamberger, president and CEO of the Association of American Railroads (AAR), to the Senate Commerce Committee. He said the FCC’s approval process is unworkable for a deployment on the scale of the PTC in the timeframe mandated by the RSIA and the Federal Railroad Administration’s rules. “Until the FCC develops a workable procedure, installation of the PTC antennas is at a standstill,” says Julia Wise, a spokeswoman for the AAR.

Railroad safety is a big issue for the oil industry given the uptick in oil carried by rail from the Bakken fields in North Dakota and the possibility that tar sands from Alberta could move on railroads instead of in pipelines, especially if the administration blocks approval of the Keystone XL pipeline. There have been some horrific train accidents, including one in July where an unattended train with 72 tank cars hauling crude from Bakken rolled downhill into a town in Quebec, just north of the Maine border, and ignited an inferno that destroyed half of downtown. In its aftermath, the Federal Railroad Administration issued an emergency order that requires new safety procedures for hauling crude. The Pipeline and Hazardous Materials Safety Administration said it may demand more puncture-resistant tank cars.

As part of PTC implementation, railroads must install tens of thousands of new antenna structures nationwide to transmit PTC signals. Approximately 97% of these structures will be relatively small poles, between 6-60 feet high, installed on railroad rights-of-way alongside tracks. The remainder will be larger base stations similar to traditional telecommunication towers. Depending on location, these larger structures may or may not be located on a railroad’s right-of-way. The result is that PTC will likely be required on more than 70-90% of main line trackage within the U.S.

The FCC maintains that all PTC antenna structures, regardless of size or location on the right-of-way, are subject to the National Environmental Protection Act (NEPA) and the National Historic Preservation Act (NHPA). The FCC’s interpretation of its rules implementing these acts would subject every PTC antenna structure to a separate environmental evaluation process at the FCC. Depending on the outcome of this evaluation, a more comprehensive environmental assessment (EA) might be required.

The federal regulatory impediments are concerning because the FRIA requires railroad to complete implementation by Dec. 31, 2015. “Significant obstacles make meeting the 2015 implementation deadline for interoperable PTC impossible,” states Wise. “The AAR has asked Congress to push that deadline back to 2018.”

PTC systems are comprised of digital data link communications networks, continuous and accurate positioning systems such as Nationwide Differential Global Positioning System (NDGPS), on-board computers with digitized maps on locomotives and maintenance-of-way equipment, in-cab displays, throttle-brake interfaces on locomotives, wayside interface units at switches and wayside detectors, and control center computers and displays. The remote intervention capability of PTC will permit the control center to stop a train should the locomotive crew be incapacitated.

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