State Attorneys Want FERC to Halt Fossil-Fuel Project OKs
In a May 7 joint letter, 10 attorneys general of mostly Democratic states and Washington, D.C. want the Federal Energy Regulatory Commission to halt approvals of all new and pending natural gas pipelines, liquefied natural gas (LNG) export facilities, and related fossil-fuel infrastructure projects until the COVID-19 crisis ends because of pandemic impacts on "due process rights."
The letter to FERC Chairman Neil Chatterjee follows one sent to him last month by 30 Democratic House members.
The AGs of Maryland, Massachusetts, Connecticut, Delaware, Illinois, Minnesota, New Mexico, Oregon, Rhode Island, Virginia and the District of Columbia asked FERC to "declare an immediate moratorium" on allowing projects to move forward, noting stakeholders "whose ability to participate in hearings and proceedings may be accordingly constrained" by virus stay-home edicts.
According to the letter, "agencies, including the Commission, must acknowledge that fact, and modify their practices accordingly." The letter did not offer a moratorium duration.
The AGs' request points to upcoming FERC debates over issues "as fundamental as whether a pipeline company can seize private land through eminent domain and whether communities will be burdened with pollution from supporting infrastructure and the risk of malfunction."
In a statement to media, Chatterjee said FERC "will be responding in due course."
Energy Demand Plummets
The requested halt comes amid a massive predicted drop in energy demand spurred by the expected widespread recession from Covid-19 constraints, according to a major new global forecast.
Energy demand in 2020 will drop 10% in the U.S. and Europe compared to 2019, nearly double the decline after the 2008 global financial failure, the International Energy Agency said in its annual energy review released in early May.
“The plunge in demand for nearly all major fuels is staggering, especially for coal, oil and [natural] gas. Only renewables are holding up during the unheard-of slump in electricity use,” says IEA Director Fatih Birol. It is too early to know the longer-term impacts, but Birol says it is evident that the energy industry that emerges “will be significantly different” from what it was before.
Low prices and low demand will leave companies with weakened financial positions and strained balanced sheets. “Market concentration and consolidation are likely,” the report says.
A second wave of the pandemic or a slower recovery could cause further declines, with only renewable energy sources likely to grow during the remainder of 2020, says IEA. Clean energy output is expected to increase 1% during the year. The international agency estimates that global electricity demand in 2020 will drop 5%, with a 10% decline in some regions.
While U.S. renewables construction has been hurt by COVID-19 delays, legislators and the Trump Administration are negotiating new strategies to allow solar, wind and other renewable projects more time to qualify for tax incentives and other stimulus relief, says a May 8 report in the Washington Post.
Oil demand in 2020 could fall 9%, with the second-quarter already showing having the largest volume cuts in the history of the oil industry, IHS Markit says.
“All producing countries are subject to the same brutal market forces. Some will be impacted more than others. But there is nowhere to hide,” says Jim Burkhard, the research firm's vice president and head of oil markets.
Coal could drop 8% in large part because of the fall in electricity demand, says IEA. Natural gas demand fell 2% in the first quarter of the year, but it is expected to decline to about 5% during the full year due to low power demand and reduced industry use. Nuclear power output also is forecast to fall by about 3%.
Global carbon dioxide emissions are expected to be 8% lower than those in 2019, the largest reduction ever seen—with coal-fired sources accounting for the largest cut. The U.S. could see the largest absolute decline in emissions with about 600 metric tons, the IEA report says.
Carbon emissions could rebound sharply as the economy improves unless investments to spur growth are dedicated to cleaner infrastructure, says IEA. “Policy makers should step up their clean energy ambitions and steer energy-related investments onto a more secure and sustainable path.”