Top energy regulator backs pipeline standards after Colonial Pipeline hack

New federal powers are needed to prevent major energy disruptions like the cyberattack on the Colonial Pipeline that left the East Coast short of gas at the pumps for days, the chairman of the federal commission overseeing energy and some U.S. House Democrats said Wednesday.

A House Energy and Commerce subcommittee discussed a proposal by Rep. Bobby Rush, D-Ill., that would give the Federal Energy Regulatory Commission the power to impose basic standards for natural gas pipeline reliability and security. Such standards don’t now exist.

Members of the House panel aimed to address a joint report from FERC and the North American Electric Reliability Corporation following a devastating Texas winter storm in 2021 that also showed how pipelines can fail.

The report recommended a single federal agency be responsible for ensuring pipeline reliability, full committee Chairman Frank Pallone, D-N.J., said. He praised Rush “for taking those recommendations seriously.”

The Colonial Pipeline ransomware attack in May 2021, when Russian hackers shut down a key pipeline owned by Colonial Pipeline of Alpharetta, Ga., affected a conduit for gasoline to 17 states in the South and East and the District of Columbia. Shortages and panic buying ensued.

“As some recent high-profile events have proven, disruption to our energy supplies has some dire consequences,” Rep. Mike Doyle, D-Pa., said. “And the need for reliability is only going to increase as we see more extreme weather events and the proliferation of cyberattacks.”

FERC can enforce reliability standards regarding electricity delivery and other matters, but lacks such authorities when it comes to regulating pipelines.

“Lack of mandatory reliability standards, especially for natural gas pipelines, poses a risk to the reliability of the bulk power system to the interdependency of our nation’s gas electric infrastructure,” FERC Chairman Richard Glick told the panel.

Several oppose FERC expansion

Republican members of the panel opposed the bill expanding FERC’s reach.

“The topic of this hearing is completely off base, out of touch with the realities facing Americans today,” said Rep. Fred Upton of Michigan, who is the ranking Republican on the subcommittee. “This bill would dramatically expand FERC, transforming a relatively tiny agency into a behemoth with regulatory powers over America’s energy system.”

Rep. Kurt Schrader, a moderate Democrat from Oregon, also appeared skeptical. Schrader asked Glick if reliability problems have increased in recent years, and whether the industry was not doing its due diligence.

When Glick said he didn’t have evidence of either, Schrader said that was important to know before imposing more regulations.

“If we need to change the regulatory framework, it would be, I assume, because we’re having more problems,” Schrader said.

Republicans also said Congress and federal agencies should be focused on lowering the cost of fossil fuels, not expanding the role of FERC.

“Instead of discussing the creation of a new level of bureaucracy for pipelines, we should be fighting the current energy crisis,” Rep. Earl L. “Buddy” Carter, R-Ga., said.

“My Democratic colleagues have spent over a year now conducting an all-out assault on reliable and affordable fossil fuels and the infrastructure needed to transport these vital resources to market,” Rep. Bill Johnson, R-Ohio, said.

Energy Deputy Secretary David M. Turk said the administration believes energy prices are too high.

But he attributed the price hikes to the general disruptions in the economy caused by the pandemic, not — as Republicans alleged — because of the administration’s energy policies.

“Prices are too high right now,” Turk said. “COVID has thrown the supply and demand for oil and gas out of whack and we’re suffering from — we’ve got a near-term problem. It’s not caused by pipelines or other things. It’s caused by COVID and we’re trying to deal with that.”

Reliability of the electric grid is related to energy costs, Rep. Diana DeGette, D-Colo., and Glick said. Prices spike during outages, they said, including during the Texas winter storm. A more reliable grid would provide more stable pricing, they said.

Florida Democrat Kathy Castor said the impact on prices is nationwide. California residents paid 30 times normal rates and Minnesota ratepayers paid an extra $800 million last year during gas spot price increases during the Texas outage, she said.

Line 5 questions

Republicans were particularly critical of President Joe Biden’s actions on pipelines.

Biden cancelled the XL Keystone pipeline that was planned to transport crude oil from Canada to a connection in Nebraska.

Upton and Ohio Republican Bob Latta asked about the Line 5 pipeline, an oil transport system that traverses Michigan and Wisconsin. Michigan has sued the line’s operator, Canadian energy company Enbridge, to halt operations because of danger of leaking in the Straits of Mackinac.

Turk told Latta he had not been involved in discussions over a potential closure of the line.