FERC NOMINEE IN HOT SEAT FOR GAS, CCS VIEWS

Tamar Hallerman
GHG Monitor
9/20/13

Republicans on the Senate Energy and Natural Resources Committee sought this week to peg remarks the Obama Administration’s pick to head the Federal Energy Regulatory Commission (FERC) previously made about natural gas and carbon capture and storage as outside the mainstream. Sens. John Barrasso (R-Wyo.) and Jeff Flake (R-Ariz.) sharply questioned former Colorado Public Utilities Commission Chairman Ron Binz during his confirmation hearing about a previous comment he made that natural gas is a “dead end” fuel without CCS come 2035. “Given your belief that we should stop using natural gas by 2035—that it’ll be dead-end in 21 years if there’s no carbon capture and sequestration technology available at that time—is it fair to say that your views fundamentally conflict with FERC’s mission to support the use of natural gas?” Barrasso asked Binz at the Sept. 17 hearing.

Barrasso and Flake were referring to remarks Binz made at an Edison Foundation conference earlier this year, during which he discussed the potential role of natural gas in a carbon-constrained future. “On a carbon basis, you hit the wall in 2035 or so with gas,” Binz said. “We also have to understand that without carbon capture and storage, I think that’s a relative dead end. It won’t dead end until 2035 or so, but that’s when we’re going to have to do better on carbon than even natural gas will allow us to do under current assumptions about technology,” he added. Barrasso said at this week’s hearing that since CCS is “not currently commercially viable and may never be for natural gas,” Binz’s views are akin to wanting to “leave 80 years worth of affordable natural gas in the ground.” “Those views are troubling because you’ve been nominated to lead FERC, the agency responsible for permitting the interstate natural gas pipelines, natural gas storage facilities, LNG export terminal facilities that are intended to be in place well beyond 2035, and you’re going to have to make those decisions today,” said Barrasso.

Binz refuted Barrasso’s remarks, as well as similar questioning from Sen. Flake. “I cannot agree with your conclusion,” Binz said. “I think [gas] is a terrific fuel that’s needed right now and may be in the permanent energy mix.” Binz clarified that if policymakers at some point decide to decarbonize the electricity sector in order to limit the effects of climate change, then CCS will need to be installed on gas capacity in the decades to come, a view vocalized by several high-profile environmental groups in recent years. The decision of whether to decarbonize the electricity sector “won’t be up to me at FERC. It’ll be up to Congress, the EPA and the courts. I’m just speaking as someone informed about the energy industry. Rather than being outside the mainstream, I’m very much in the mainstream,” Binz said, citing studies from MIT and the Electric Power Research Institute. He said that by 2035 “there’s a very good chance that [CCS] will be invented or perfected.”

Proxy Debate

In the days ahead of the confirmation hearing, fossil fuel industry groups and conservative organizations coordinated to paint Binz as an anti-coal, pro-renewables activist during his time as Colorado PUC chairman from 2007 to 2011. Many also sought to frame the confirmation process as a proxy debate over the Obama Administration’s climate policies. Opponents particularly focused on Binz’s implementation of Colorado’s “Clean Air, Clean Jobs” program, which shuttered some older coal capacity in the state. A group of opponents headed by the American Energy Alliance and the Competitive Enterprise Institute wrote a letter to the Senate Energy Committee members earlier this week expressing their opposition to Binz’s candidacy. “We are very concerned that Commissioner Binz would not be constrained by Congressional-mandated boundaries, but would act to carry out President Obama’s plan to make electricity prices ‘necessarily skyrocket.’ Just like in Colorado under Commissioner Binz’s watch, electricity prices will increase if he is confirmed as FERC chairman, which will be a hidden tax on your constituents,” they said in the letter, warning that Binz, if confirmed as FERC chairman, could slow action on natural gas pipeline permitting and LNG exports.

The strong opposition has put Binz’s confirmation in jeopardy. It is now unclear whether he will have enough votes to clear the Senate Energy committee—which has 12 Democrat and 10 Republican members—since Sen. Joe Manchin (D-W.Va.) announced this week that he would vote against Binz due to his views on coal. “His approach of demonizing coal and gas has increased electricity costs for consumers. I believe Mr. Binz’s record is unacceptable for a FERC Chairman,” Manchin said. None of the panel’s Republicans are expected to vote in favor of Binz’s nomination.