Oil & gas industry dominates federal agency responsible for pipeline approvals

This report has been corrected.

The oil and gas industry has aggressively pursued pipeline projects in recent years, most notably Dakota Access. This comes as new extraction techniques such as fracking increase the capacity to produce domestic supplies of carbon fuels. Crucial to this pursuit has been the quick approval process the industry has come to expect from the Federal Energy Regulatory Commission (FERC), the agency which oversees the expansion of interstate pipelines and other infrastructure.

One dynamic that might be shaping FERC’s industry-friendly approach to pipeline regulation: FERC commissioners’ revolving door relationships with the industry they are supposed to be regulating. This report examines the employment history of current and former FERC commissioners in order to bring transparency to this dynamic.

Key Findings

The majority of FERC commissioners who have left the agency since 2000 went through the revolving door to the fossil fuel industry.

• 12 of 15 former commissioners who resigned since 2000 are currently employed either directly or indirectly in the fossil fuel industry as executives, directors, partners, lobbyists and/or consultants.
• Six of 15 former commissioners who resigned since 2000 have received a total of more than $11.1 million as directors of energy companies in the fossil fuel industry.

Acting FERC chair Cheryl LaFleur has deep ties to the energy industry

• Cheryl LaFleur – recently elevated by Donald Trump to acting chairwoman – was a longtime executive at National Grid USA, the utility company, before joining FERC. National Grid is a partner on Spectra Energy’s Access North pipeline project. LaFleur’s re-appointment to FERC in 2014 was backed by the fossil fuel industry – a Boston-based business group that represents major energy companies successfully lobbied for it.

FERC’s revolving door is alarming in the context of the commission’s nearly 100% approval rate for natural gas pipeline projects since 1986, as calculated by the Delaware Riverkeeper Network. Moreover, nearly two hundred environmental groups alleged an “extensive history of bias and abuse” in a letter to two Congressional energy committees, and there are ongoing inquiries by Senators Elizabeth Warren and Edward Markey into conflicts of interest between third-party energy contractors and officials within the Commission.

These connections are even more concerning in consideration of the three vacancies on the commission to be filled by Donald Trump, who has already attempted to stack the Department of State, the Department of Energy, and the Environmental Protection Agency with regulators beholden to the oil and gas industry.

As the oil and gas pipeline boom continues, and the number of applications for new infrastructure projects rises, it is becoming increasingly clear that the revolving door between FERC leadership and the industry has undermined the agency’s ability to act independently and with the public’s interest as its primary motivator.

Former commissioners have passed through the revolving door

Since 2000, 12 commissioners who have stepped down from FERC have gone through the revolving door to the fossil fuel business. Eleven currently work in the industry. This not only includes companies directly involved in the production and development of oil and gas resources, but also infrastructure developers, large law firms that represent energy companies before FERC, and major utilities that rely on natural gas- or coal-powered power plants for electricity generation.

Below is a table that includes former commissioners’ previous and current fossil fuel industry ties. You can find more context explaining each of these ties in this story map:

Table 1. Revolving Door FERC Commissioners

Although it is difficult to determine how much income these former commissioners have earned for this work, six of them have held directorships at companies that publicly disclose annual earnings for directors. In total, former commissioners Philip Moeller, Suedeen Kelly, Linda Key Breathitt, Patrick H Wood III, Vicky Bailey, and Nora Mead Brownell received over $11.1 million in cash and stock awards for serving as directors at companies in the fossil fuel industry.

Derived from filings with the US Securities and Exchange Commission as well as annual reports from non-US companies, compensation these commissioners received from the companies they directed can be seen in the table below.

Table 2. Former FERC Commissioners’ compensation as directors of energy companies

* National Grid, a British company, has paid Nora Mead Brownell £346,000 over the 2012 – 2015 fiscal years. PAI calculated the US$ value of Brownell’s compensation for each year using the exchange rate at March 31, the end of each fiscal year.

Current FERC chair’s ties to fossil fuel industry

Cheryl LaFleur has served as a FERC commissioner since July 2010, and chaired the Commission from July 2014 to April 2015. In January 2017, President Donald Trump elevated her to acting chairwoman again. LaFleur came to the agency from National Grid USA, one of the nation’s largest energy utility companies. Her primary responsibility at the company was to ensure its growth and profitability in its US market. As an executive, LaFleur interacted with powerful business associations in the Northeast that represent major energy and utility companies, most notably the Boston Chamber of Commerce, which gave LaFleur an award, and the New England Council, which lobbied the Senate on LaFleur’s behalf before lobbying her on behalf of Spectra.

During her time at FERC, many of LaFleur’s opinions have been favorable for the energy industry. Activists and op-ed writers have alleged that she is too cozy with the companies she is supposed to regulate to meaningfully challenge their corporate practices.

A more complete breakdown of LaFleur’s corporate ties, and how it may have affected her decision-making process at FERC, can be seen in this story map:

LaFleur’s nomination to FERC may have resulted from a close relationship between the Obama administration and Exelon, where a number of close Obama confidants have worked. A New York Times report describes how executives and lobbyists from Exelon leveraged access to the White House in order to win favorable grants and changes to energy policy. One of these executives at the time, CEO John Rowe, worked closely with LaFleur for over a decade, and has been described as her boss and mentor (she, in turn, has been described as his “right hand person”).

A thorough account of Exelon’s ties to FERC, and how they may have influenced Obama’s decision to nominate LaFleur for a commissioner seat, can be found in this story map:

Correction

When this report was originally published it mistakenly identified Emon Mahony, a legal advisor to Commissioner Colette Honorable, as an investor in the oil driller Ward Petroleum and an advisor to Stephens Group, which is invested in several oil and gas corporations, including Energy Transfer Partners. Honorable’s advisor is not invested in oil and gas drilling.

Mahony’s father, also named Emon Mahony, is an oil and gas investor.

Colette Honorable’s legal advisor, who did work for Stephens for a year, is currently employed by the Arkansas Attorney General in the Consumer Utility Rate Advocacy Division. Mahony represents utility customers before regulatory bodies, including the Arkansas Public Service Commission and FERC.

PAI regrets this error.