With help from Gavin Bade, Doug Palmer, Annie Snider and Eric Wolff
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— FERC is meeting today to consider a legal dispute over whether the PennEast pipeline can use federal eminent domain authority to seize state land.
— The United States Trade Representative will consider a long-running standoff between Chevron and Ecuador as part of a series of hearings over whether to suspend trade benefits for certain countries.
— A coalition of investors called on energy companies to not take advantage of Trump administration environmental rollbacks.
WELCOME TO THURSDAY! I’m your host, Kelsey Tamborrino. Check out the POLITICO Energy podcast — all the energy and environmental politics and policy news you need to start your day, in just five minutes. Listen and subscribe for free at politico.com/energy-podcast.
Ed Chen of the Natural Resources Defense Council gets the win for knowing there are 11 Smithsonian museums and galleries on the National Mall. For today: How many former mayors are currently in the Senate? Send your tips, energy gossip and comments to ktamborrino@politico.com.
STATE-FEDERAL TENSION AT FERC: FERC will hold a special open meeting this morning to consider a legal dispute over whether the agency’s approval of natural gas pipelines allows those projects to seize land owned by state governments. FERC approval allows natural gas projects to seize privately owned land through federal eminent domain powers. But last fall, the 3rd Circuit Court of Appeals ruled the PennEast pipeline could not take land owned by the state of New Jersey, despite having a construction certificate from FERC.
The pipeline company plans to appeal to the Supreme Court and wants FERC to bolster its case. Last fall, it petitioned the agency to issue a declaratory order asserting that FERC approval should overrule state jurisdiction and allow PennEast to take the land. Specifically, PennEast wants FERC to argue that when Congress gave private companies eminent domain authority in the Natural Gas Act, it waived state sovereign immunity — the legal doctrine that states can only be sued if they consent to it. To take property using eminent domain, a pipeline developer has to bring the owner to court, and it cannot do so if sovereign immunity is still in play.
FERC was scheduled to vote on the petition at its open meeting last Thursday, but Chairman Neil Chatterjee struck it from the agenda at the last minute, saying he and his colleagues “weren’t ready” to vote. Instead, Chatterjee scheduled a rare, single-issue open meeting to consider it, saying an issue of “such significance to the commission’s jurisdiction” deserved the extra scrutiny. Many observers believe the move signals that FERC is likely to side with PennEast and push back on the 3rd Circuit’s decision.
“Holding an open meeting on this question suggests FERC is inclined to grant the petition,” said Avi Zevin, senior attorney at the Institute for Policy Integrity at the NYU School of Law. A supportive vote from FERC would not change the pipeline’s legal status, Zevin cautioned, as the agency cannot overrule the court in an order. But it could help convince the Supreme Court that the 3rd Circuit erred in its decision, increasing the likelihood the High Court takes up the case.
ANSWER THE QUESTION: Maryland Democratic Sen. Chris Van Hollen hit back at EPA Wednesday in the latest skirmish over lagging Chesapeake Bay cleanup efforts, accusing the Trump administration of dodging his questions about its willingness to enforce the landmark federal-state cleanup plan. “Their response ducks the main question we asked: do they plan to enforce the pollution reduction targets in the Bay Agreement?” Van Hollen said in a statement.
BROUILLETTE TRIES TO CALM OIL MARKETS: Energy Secretary Dan Brouillette on Wednesday morning sought to soothe oil markets rattled by the potential of falling demand if a coronavirus outbreak in China spreads. Crude oil prices have seen double-digit declines since the outbreak. “We’ve seen in the past that these types of events, while it’s important that we deal with them very, very aggressively, tend to be short-term in nature,” he said in an appearance on Fox Business. “I think you’re going to see economic growth as soon as we can see clearly what are the impacts of this outbreak.”
TRUMP SIGNS USMCA: President Donald Trump on Wednesday signed the U.S.-Mexico-Canada Agreement, which the White House said would “help prevent companies from moving out of the United States … to avoid environmental rules.” Industry groups, like the Independent Petroleum Association of America, cheered the signing. IPAA President and CEO Barry Russell called it “good news for U.S. independent oil and natural gas producers.” American Petroleum Institute President and CEO Mike Sommers said it was a “win-win for American workers and energy consumers.” But while the measure earned bipartisan congressional support, several Democrats, including Minority Leader Chuck Schumer, vocally opposed the deal on environmental grounds.
GSP HEARINGS: THAILAND TODAY, SOUTH AFRICA ON FRIDAY: The United States Trade Representative is holding two days of hearings that could lead to a suspension of trade benefits for several countries under the Generalized System of Preferences program, including a long-running dispute over oil development in Ecuador. The GSP program allows developing countries to export over 3,500 products to the United States without paying duties in a bid to help economic development among the beneficiaries.
Chevron vs. Ecuador: Chevron first filed a petition in October 2012 asking U.S. officials to suspend or significantly reduce Ecuador’s GSP benefits. The complicated legal battle stems from an Ecuador court ruling in February 2011 that imposed an $18 billion fine — later reduced to $9.5 billion — on Chevron for alleged contamination resulting from crude oil production in the region.
Chevron has successfully fought the damage award in U.S. courts and in separate proceedings under the U.S.-Ecuador Bilateral Investment Treaty. But it accuses the Andean country of defying those decisions and supporting efforts by individuals “engaged in a corrupt, multi-jurisdictional campaign to extort $9.5 billion from Chevron” using the original ruling. Ecuador says it has “acted in good faith” throughout the process. Chevron’s “intentions are plain — to use trade as a weapon to influence the legal process,” the Ecuador Embassy in Washington said in its brief. “The legal processes, however, should be permitted to play themselves out, free from political or economic interference.”
INVESTORS GO AFTER TRUMP ROLLBACKS: Investors representing almost $113 billion in assets under management warned oil, gas, mining and timber companies not to take advantage of Trump administration environmental rollbacks, arguing they should consider the financial risk. Trump rollbacks to laws like the Endangered Species Act, Antiquities Act and the National Environmental Policy Act pose a “significant risk of public backlash and stranded assets, should these actions be legally challenged or protections be restored by the courts or by future administrations,” the letter says. It was sent to close to 60 companies, including Chevron, BP, Exxon, Hess and Occidental Petroleum. The letter comes as financial institutions, like BlackRock, are reevaluating the role of climate change in their investment decisions.
By the way: Federal Reserve Chair Jerome Powell said Wednesday he expects the central bank to play a role in shoring up the financial system against climate risks, but said the bank was still in the early stages “of understanding just what that means,” Pro’s Katy O’Donnell reports.
N.Y. CONSIDERS COAL DIVESTMENT: The New York State Common Retirement Fund will review 27 thermal coal mining companies to determine if they’re accounting for efforts to lower emissions, New York State Comptroller Thomas DiNapoli announced Wednesday. The review is part of DiNapoli’s Climate Action Plan to assess climate risks in the $210 billion state pension fund. The companies under review were included because they earn at least 10 percent of revenues from mining thermal coal.
“If a particular company is not ready to move away from its reliance on thermal coal mining for profits, we may divest our holdings in that company,” DiNapoli said in a statement. The companies have until mid-February to respond with information on their plans to transition their business model.
SANDERS INTRODUCES PFAS BILL: Sens. Bernie Sanders, Jeff Merkley and Ed Markey introduced a bill Wednesday that would designate PFAS as hazardous under the Superfund law. The Prevent Future American Sickness Act would also provide grants for filtering out PFAS from communities’ drinking water and would prohibit PFAS in “food contact” substances. Read the bill text and section-by-section breakdown.
The bill echoes provisions in the House-passed PFAS Action Act, H.R. 535 (116), which has not been taken up in the Senate. GOP Sen. John Barrasso has said the House measure has no chance of passage because it goes beyond the bipartisan PFAS measure his committee has already passed.
HOUSE ADVANCES ENDANGERED SPECIES BILL: The House Natural Resources Committee advanced by a 21-16 vote a bill, H.R. 4348 (116), Wednesday that would undo changes under the Trump administration to the implementation of the Endangered Species Act, Pro’s Anthony Adragna reports.
— “Ramaco Carbon expects to start W.Va. coal research activities in March,” via S&P Global Market Intelligence.
— “Now Trump administration would like to see bankrupt Philadelphia refinery kept open,” via The Philadelphia Inquirer.
— “Navajo look to Arizona utilities to make up for coal losses,” via Associated Press.
— “BLM ‘Mineral Monday’ tweet prompts anger, ridicule,” E&E News.
— “Guardian to ban advertising from fossil fuel firms,” via The Guardian.
— “New Mexico Supreme Court: New law applies to energy case,” via San Francisco Chronicle.
THAT’S ALL FOR ME!
