What's the issue?
While almost no one will miss 2020, the coming year could be eventful in ways both predictable and unimaginable.
Why does it matter?
Navigating a project or a company through a period of change requires awareness beyond the issues with direct impact.
What’s our view?
In the coming year, we will help you stay aware of known issues beyond those that directly impact your company and projects and will even try to anticipate with you the issues and opportunities that may initially seem unimaginable.
As 2020 comes to a close tomorrow, there is hardly anyone that will miss this past year and the impacts it has had on the mundane aspects of life that we all used to take for granted -- like attending conferences, sporting events, or even simply riding the Metro to a bar or restaurant for a nice night out on the town. As we looked forward a year ago to 2020, we did not anticipate that a global pandemic would not only roil the energy markets but also create havoc for routine work processes.
Today, as we look forward to 2021, we hope that the known issues that will be faced in the coming year are the ones that, when we look back a year from now, are what we will be talking about. However, whether it is events that can be put on a calendar or events that cannot even be anticipated, we will work with your teams to raise awareness of the issues and opportunities those events create, and help everyone make the most of whatever comes.
Big Themes for 2021
We set forth below a calendar of some of the known (or projected) events that will occur in the first quarter of 2021. However, there are some major themes that should be on everyone’s radar for the coming year, and most of them arise due to the change in administration that will come on January 20 and the work of a very narrowly divided Congress.
The Twentieth Amendment to the Constitution calls for Congress to convene on January 3 at noon. This year, that day falls on a Sunday, but the House and Senate will still convene that day to formally commence the new session. However, as of that day, neither of the senators for the state of Georgia will have been elected, as both of those seats are subject to a runoff on January 5. On January 6, Congress is to meet and confirm the votes of the electoral college which will formally result in the election of Joe Biden as president, who will then be inaugurated on January 20, also at noon.
While Joe Biden has not yet stated who he will appoint as the chair of FERC, we expect him to do that almost immediately upon taking office. He must pick one of the currently serving commissioners, and it is expected that he will name one of the two Democrats, either Commissioner Glick or newly-appointed Commissioner Clements. Interestingly, FERC changed its open meeting calendar, which usually calls for the meeting to be on the third Thursday of each month, to have January’s meeting occur on Tuesday the 19th, the day before the inauguration, rather than Thursday the 21st. That will mean that Chairman Danly has one last opportunity to serve as the chair of an open meeting before handing the gavel over to one of the two Democrats. While there are not a lot of pipeline projects awaiting a decision, those that are will certainly be hoping that the 3-2 Republican majority will approve them at that meeting.
Commissioner Chatterjee has indicated that he intends to serve out his term, which ends on June 30, 2021. It is unclear whether Commissioner Danly will continue to serve following his demotion. If he does, then until a replacement for Commissioner Chatterjee can be named and confirmed by the Senate, the Commission will have a Republican majority and a Democratic chair. If Commissioner Danly resigns, the Commission would be evenly split 2-2. In either case, Commissioner Chatterjee has indicated a willingness to work with Commissioner Glick on approving pipeline projects in a manner acceptable to Commissioner Glick. Between January 20 and June 30, we expect that Commissioner Chaterjee’s vote will be the most important in determining the actions taken at FERC.
No matter who wins the runoff elections in Georgia, both chambers of Congress will have very narrow majorities. The thought is that this gives more power to the less ideological members of both chambers, and in the energy area, that would be Senators Manchin and Murkowski. The set of bills passed just before Christmas and signed into law by President Trump on Monday included a statute titled the Energy Act of 2020, which both senators touted as the first comprehensive energy act in thirteen years. It was advanced through a bipartisan effort led by the two senators and has provisions supporting the development of all forms of energy, including renewables, nuclear, carbon capture and storage, and blue hydrogen. Following its passage, Senator Manchin tweeted that he and Senator Murkowski “are friends, colleagues, and partners on the Committee on Energy and Natural Resources, and I am so proud of what we’ve accomplished together over these last two years.” Given their close working relationship, they may very well form a critical coalition that will determine the success of any legislation proposed by the Biden Administration.
One of the first key areas where this cooperation could be tested is with respect to the authority granted to Congress under the Congressional Review Act, which we last discussed in Looking to 2021 After the Election (Part 1). Congress will have 75 session days following January 3, 2021, to consider whether it wants to repeal any regulations that were enacted by the Trump Administration since about mid-May. As we discussed in our prior article, there are a number of regulations that will likely be considered for repeal by the new Congress, but passing any such repeal will likely depend on getting at least some level of Republican support, putting the centrists of both parties in control of such actions.
Many of the dates listed in the attached calendar are for cases pending before various federal courts. The actions of the courts may be influenced by the change in administrations as well. First, in cases like Dakota Access Pipeline (DAPL), which we last discussed in Litigation Update: Dakota Access and Water Quality Certificate, a key argument being made by DAPL and the government is that the question of whether the pipeline needs to shut down is an executive branch decision. While that argument may have been considered favorable to DAPL when it was made, if the court were to accept that argument now, it could be adverse to DAPL because then the shutdown decision will be made by the Biden Administration. Similarly, the Solicitor General recently suggested that the Supreme Court should hear the appeal by PennEast of the appellate court’s decision to block PennEast’s use of eminent domain against the state of New Jersey. While the court could accept that recommendation, it may also wait to see if that recommendation is confirmed by the new administration. Finally, with regard to Mountain Valley Pipeline, we have regularly stated that the appellate court is the greatest risk to that project’s timeline and viability, mainly because the court seems skeptical of the thoroughness of permit reviews by the Trump Administration. While the court is likely to void some permits granted by the current administration, if those permits are reissued by the new administration, they could very well finally be approved by the court.
All of these issues bear watching and we will endeavor to keep our customers aware of developments through our regular scheduled Insights and Advisory Service Alerts when needed. We are hopeful that 2021 will allow us all to resume a somewhat normal life and we wish everyone a safe and prosperous New Year.