FERC: Virginia Pipeline's Environmental Contractor Has 'Conflict Of Interest'

Annapolis MD

27 December, 2021

10:48 AM

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By Jeremy Cox, the Chesapeake Bay Journal Dec 22, 2021 The Federal Energy Regulatory Commission has taken the unusual step of voiding a contract with a firm it had hired to conduct a "third-party" environmental review of a sprawling natural gas infrastructure project in Virginia. FERC said in a Dec. 15 public filing that it had dissolved its agreement with the contractor, Burns & McDonnell. The agency's move came after staffers discovered the firm, while under contract with FERC, was also under contract directly with the project's developer, Columbia Gas Transmission, on another leg of the pipeline. That was clearly an "organizational conflict of interest," FERC said. Burns & McDonnell waived the contract's 30-day termination notice requirement, the filing said, clearing the way for a new contractor to be brought on board without delay. The move represented a swift about-face for a federal agency long criticized as acting as little more than a rubber stamp for energy suppliers. FERC staff members had finalized the contract with Burns & McDonnell only 13 days earlier, according to agency documents. It's unclear when regulators became aware of the alleged conflict. The termination notice didn't specify how the information came to light. But the letter reversing the earlier decision was dated just five days after a Bay Journal reporter contacted the agency's communications department with questions about Burns & McDonnell's selection. "Thank you for the inquiry," Tamara Young-Allen, a commission spokeswoman, said in her reply, also dated Dec. 15. "After further review, the Commission has released this third-party contractor and will be initiating the process for a new third-party contractor." Energy watchdog groups applauded FERC's turnaround. Critics said that if the Burns & McDonnell environmental review of the $102 million project had been allowed to go forward, it would have been biased by the firm's direct financial interests in the other Columbia Gas project. "The fact that FERC addressed it is great," said Mary Finley-Brook, a professor of geography and environment at the University of Richmond and an opponent of fossil fuel-derived energy. "We're looking for leadership. We're hoping for FERC in this round to be more responsive to what science and the public are saying." Itai Vardi, a research and communications specialist with the Energy and Policy Institute, was the first to unearth Burns & McDonell's ties to Columbia Gas. Vardi said the conflict wasn't immediately obvious. Nothing in the permit application paperwork — a proposal to upgrade a meter station and a compressor station in Louisa County and a compressor station in Goochland County, all along existing company pipeline north of Petersburg — suggested that Burns & McDonnell had a stake in the project's outcome. Columbia Gas Transmission, a subsidiary of Canada-based giant TC Energy, first submitted plans to FERC in September for the project, which it called the Virginia Electrification Project. The National Environmental Policy Act requires most energy projects to be examined to determine what environmental impacts those projects will have and how they can best be avoided. In the energy sector, permit applicants pay contractors to conduct those assessments, but federal guidelines specify that those contractors act as "third parties" that answer to FERC. In October, documents show that Columbia Gas proposed the names of more than one contractor to FERC. (Publicly available records don't indicate the exact number submitted). The next month, the agency chose Burns & McDonnell as the "independent contractor" to work for FERC. The conflict only became apparent, Vardi said, with a second infrastructure proposal from Columbia Gas. In December, the company returned to FERC with what it called the Virginia Reliability Project. That work aims to replace nearly 50 miles of pipeline south of Petersburg and improve compressor stations at Petersburg and Emporia. One of the documents submitted by Columbia Gas for that project lists contractors it has retained for various aspects of the work. It includes a familiar name: Burns & McDonnell. Although the VEP and VRP proposals were filed separately, Vardi said they are intrinsically linked. Upgrades on the northern leg of the pipeline do little good without the improvements proposed along the second leg, he said. Both projects also include work on the compressor station at Petersburg. "In this sense, then, Burns & McDonnell is currently receiving two checks from TC Energy," Vardi said. "One as the supposed unbiased third-party contractor performing the environmental review on FERC's behalf for the VEP, and another as a TC Energy contractor for the VRP." The Bay Journal submitted detailed questions to TC Energy and Burns & McDonnell. TC Energy didn't address the conflict, responding only with a statement touting the potential benefits of the project to customers. "Our customers have outlined the need to bring greater natural gas reliability to the region. The reality is that the area is experiencing significant economic growth that requires increased natural gas supply, and this project will help meet the needs of the community and our customers," the company said. On Dec. 14, a day before FERC revoked the consultant's contract to work as a third-party reviewer on the public's behalf, a Burns & McDonnell spokeswoman responded by email, saying only that the two projects were "separate" and "filed with FERC independently of one another." The Chesapeake Bay Journal is a nonprofit news organization covering environmental issues in the Bay region. Sign up for a free subscription at BayJournal.com.