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FERC: Virginia Pipeline’s Environmental Contractor Has A Conflict Of Interest
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FERC: Virginia Pipeline’s Environmental Contractor Has A Conflict Of Interest

Dec 22, 2021

The Federal Energy Regulatory Commission decided to cancel a contract it had with a firm that was conducting an “third-party” review of a vast natural gas infrastructure project in Virginia.

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In a Dec. 15 public filing, FERC stated that it had ended its agreement with Burns & McDonnell. Staff discovered that Columbia Gas Transmission, the project’s developer and contractor, was also under contract with the agency.

FERC stated that there was clearly an “organizational conflicts of interest.” Burns & McDonnell waived the 30-day notice requirement for the contract’s termination, according to the filing. This allowed for a new contractor, without delay, to be brought onboard.

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This was a quick turnaround for a federal agency that had been criticized for being a rubber stamp for energy suppliers. According to agency documents, FERC staff had signed the contract with Burns & McDonnell just 13 days before.

It is not clear when regulators were made aware of the alleged conflict. The termination notice did not specify how the information was discovered. However, the letter to reverse the decision was dated only five days after the original one. Bay JournalReporter contacted agency’s communications department to ask questions about Burns & McDonnell selection.

“Thanks for the inquiry,” Tamara Young Allen (a commissioner spokeswoman) stated in her reply, also dated Dec. 15. “After further review, The Commission has released this third person contractor and will initiate the process for a third-party contractor.”

Energy watchdog groups praised FERC’s turnaround. Critics argued that if the Burns & McDonnell environmental assessment of the $102million project was allowed to proceed, it would have been biased due to the firm’s direct financial interest in Columbia Gas.

Mary Finley Brook, a professor of geography at the University of Richmond, said that FERC addressed it. She is an opponent of fossil fuel-derived power. “We are looking for leadership. We expect FERC to respond more to the science and public’s opinions in this round.

Itai Vardi, a communications and research specialist with the Energy and Policy Institute was the first to discover Burns & McDonell’s ties with Columbia Gas.

Vardi stated that the conflict was not immediately apparent. Nothing in the permit application paperwork indicated that a proposal was made to upgrade a meter and compressor stations in Louisa County and Goochland County. This was all along existing company pipeline north and Petersburg.

Columbia Gas Transmission, a subsidiary company of TC Energy in Canada, submitted plans to FERC for the project in September. It was called the Virginia Electrification Project.

The National Environmental Policy Act requires all energy projects to be reviewed to determine the environmental impacts they will have and how best to avoid them. Although permit applicants may pay contractors to conduct these assessments, federal guidelines stipulate that contractors must act as “third party” to answer to FERC.

Columbia Gas presented names to FERC in October according to documents. Publicly available records do not indicate the exact number of submitted names. Burns & McDonnell was chosen by the agency as the “independent contractor”.

Vardi said that the conflict was only made clear by Columbia Gas’s second infrastructure proposal. The company presented the Virginia Reliability Project to FERC in December. This project aims to replace almost 50 miles of pipeline south-of Petersburg and to improve compressor stations at Petersburg, Emporia, and other locations.

Columbia Gas submitted one of its documents for the project. It lists contractors it retained to do various aspects of the work. It includes a familiar face: Burns & McDonnell.

Vardi stated that although the VEP and VRP were filed separately, they are intrinsically connected. He stated that the upgrades to the northern leg of the pipeline are not as effective without the improvements made along the second leg. Both projects also include work at Petersburg’s compressor station.

Vardi stated that Burns & McDonnell currently receives two checks from TC Energy in this sense. “One as an unbiased third-party contractor who performed the environmental review for FERC’s VEP and another as a TC Energy contractor to the VRP.”

The Bay JournalSubmitted detailed questions to TC Energy & Burns & McDonnell.

TC Energy did nothing to address the conflict. It only responded with a statement highlighting potential benefits for customers. “Our customers have expressed the need to increase natural gas reliability in the area,” TC Energy said. The reality is that the region is experiencing significant growth that calls for increased natural gas supply. “This project will help meet the needs both of our customers and the community,” the company said.

A day before FERC revoked consultant’s contract to act as a third party reviewer on public’s behalf, a Burns & McDonnell spokesperson replied by email, stating only that the two projects were separate and had been “filed with FERC separately of one another.”

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