New York—A return to boring would do the energy policy landscape good, Federal Energy Regulatory Commission member Neil Chatterjee said during a webinar where he laid out the business case for the GOP to get on board with the clean energy transition and urged the natural gas sector to be nimble and open to new opportunities the transition may present.
Chatterjee, during a Jan. 26 session of K&L Gates' distinguished speaker series, remembered a time when the gavel could change hands between Democrats and Republicans on the Senate Energy and Natural Resources Committee and there would be no real change to the committee agenda.The Kentucky Republican, who believes climate change is real and supported taking steps to mitigate emissions, was ousted from the chairman's seat at the commission Nov. 5 by then-President Donald Trump, presumably for pushing policies supportive of carbon pricing and distributed energy resources. The move was unexpected so late in the Trump administration, with a change in gavel already anticipated to put a Democrat at the helm following the turnover in power to President Joe Biden.
"Had I been given a fair chance to explain where I was coming from, I actually do think I hit the sweet spot of that right-left coalition that is necessary to move forward," he said in response to a question as to whether the left and the right could come together to move the ball forward on energy policy in an impactful way.
Business case"I was out there for several years ... making the case to conservatives that, yes, at their onset, the growth, acceleration, and deployment of clean energy technologies was driven by subsidies, regulations, and mandates, but that that was no longer the case today," Chatterjee said.
Rather, innovation, cost discipline, and market dynamics, coupled with consumer demand, have enabled renewables to compete on their own footing and thrive, creating a real business case for moving to clean energy, he asserted. "And I believe that continued growth into the future in the clean energy space will come simply from that combination of a smart, strong business case, coupled with consumer demand."
He also pointed to FERC's work that he said "could excite both the left and the right," such as the issuance of Order 2222, which seeks to open the wholesale power markets to greater participation by distributed energy resource aggregations like small-scale solar arrays and battery installations.
If that order ultimately leads to "greater incentives for the deployment of electric vehicles, that power market reform may actually lead to decreased emissions in the transportation sector, which is where our greatest challenge lies in the fight to combat climate change," Chatterjee said. He added that such an outcome would likely be "very appealing to the left as we focus on tackling climate change and mitigating emissions."
But the order is also pushing market-driven solutions that should appease the political right, Chatterjee said. "This is creating a regulatory ecosystem that will allow new technologies to flourish and to compete," and removing barriers to entry so that innovative technologies can be compensated for all the attributes they provide is "Conservative Philosophy 101," he said.
Going forward, if the conversation shifts to transmission, for instance, letting the engineers and economists sort it out rather than getting bogged down by politics will not "be great for newspaper headlines or Twitter," but it will be the boring work that is "great for the American economy, consumers, and the environment," Chatterjee said.
Role for gasBut just as market forces are creating opportunities for renewables, they are also prompting questions about the future of natural gas and the country's pipeline network as climate goals have emphasized electrification and a move away from fossil fuels.
Chatterjee stressed the vital role gas played in "squeezing carbon out of the US power sector," and contended that "US LNG ... displacing more carbon-intense sources of fuel in other parts of the world will lead collectively to a reduction in global carbon emissions."
While he argued that "the role that US infrastructure and US gas will play in confronting some of these environmental challenges should not be discounted or dismissed," he also said that pipeline companies, moving forward, "need to be flexible as they look at new opportunities."
He noted that utilities in the US and abroad are looking at hydrogen blending and renewable natural gas, and that both those options seemed technically feasible. "There are gas-quality standards and pipeline safety standards that may need to be developed to help foster these changes, but there's opportunity here," he said.
Southern California Gas and San Diego Gas & Electric, for example, in November announced plans to launch a hydrogen-blending demonstration project that will blend hydrogen with natural gas to help reduce carbon emissions.
Chatterjee commended the Department of Energy and national labs' work on how hydrogen may affect pipelines differently than natural gas, and said that "agencies like FERC and [the Pipelines and Hazardous Materials Safety Administration] also need to be open to changing our regulations to incorporate these energy sources."
