Ex-Obama official on mobilizing states to battle FERC

Source: By Arianna Skibell, E&E News reporter • Posted: Tuesday, May 26, 2020

 David Hayes. Photo credit: NYU School of Law

David Hayes is the executive director of the State Energy & Environmental Impact Center at New York University School of Law. NYU School of Law

David Hayes saw Donald Trump’s election as the start of a new era for environmental protections and the push for clean energy.

A new set of “front-line responders” — state attorneys general — would have to take the lead in safeguarding the environment, he predicted then, by countering moves by the Trump administration.

Hayes, a former federal official who spent a healthy swath of his career in high-ranking Interior Department posts, was deputy secretary and chief operating officer for that agency in the Obama administration and counselor to Interior chief Bruce Babbitt and then deputy secretary during the Clinton presidency.

He’s now mobilizing and supporting states in the fight against climate change — and against the Trump administration — as executive director of the State Energy & Environmental Impact Center at the New York University School of Law.

“Very early on, it became clear that the [Trump] administration was tied in with the fossil fuel industry — coal in particular, but also oil and gas,” Hayes told E&E News.

“A number of state attorneys general who had progressive views on clean energy and the environment were concerned about their ability, with their resources, to counter this tsunami of attacks on clean energy and the environment,” he said.

To that end, Hayes, an adjunct professor at NYU, organized the impact center to help equip states’ top legal officers for environmental battle.

Now, he said, some of the “most important legal skirmishes” in the energy and environmental space are playing out in the electricity sector.

A prime target: the Federal Energy Regulatory Commission.

“Energy policy is no longer a legal backwater,” he said.

Hayes spoke with E&E News last week about how this transition occurred and what it means for the future of clean energy and efforts to combat climate change.

What first got you interested in energy policy?

I’ve always had a strong policy orientation, and early on in my legal career — I started in the early ’80s — and that was in the aftermath of the Arab oil embargo when there was a lot of interest in diversifying our energy, starting with a look at renewable energy. Important statutes were passed then, like the Public Utility Regulatory Policies Act in 1978 and the Energy Policy Act, and I started working on energy matters. In fact, I met my now wife, who’s also a lawyer, at an energy conference in 1981.

So you decided to hop over to the federal government?

I worked through the ’80s on all of the failed Democratic presidential campaigns, and then finally Bill Clinton won, and I worked on that campaign and helped him on environmental issues, and was actually put on the transition team for EPA. I thought I might work at EPA, but the call I got was to meet Bruce Babbitt, the secretary of the Interior.

I’ve always been interested in the Interior Department because it’s such a wide jurisdiction over public lands, Indian matters, major water matters, energy issues — it’s a huge science operation — the United States Geological Survey, wildlife issues. For the Obama transition, I was head of the agency review team for the energy and environmental agencies that was Ag, Energy, Interior and EPA. And then Ken Salazar asked me to be his No. 2 at Interior. I was very fortunate to have another terrific four years.

How did the work differ between the two administrations? I imagine climate change was not as prominent an issue under Clinton.

There was definitely some change in emphasis. In the Clinton administration there was a focus on conservation and protecting threatened landscapes. President Clinton declared many national monuments under the Antiquities Act, so we were very busy there. We were also very busy on major water restoration projects in California, in the Everglades, in the Pacific Northwest in the Columbia River system. There was a focus on climate in the Clinton administration as well. But certainly by my second tour of duty at Interior, climate change had really come to the fore.

The Bush administration had dragged its feet on climate and clean energy. Ken Salazar and I were really focused on shifting the emphasis to clean energy development on public lands, in addition to the traditional oil and gas. With the help of the Recovery Act stimulus money, we permitted the first-ever, utility-scale solar projects on public lands.

For many years, FERC was little known and there was little tension between the federal government and the states. That is certainly not the case now. How did that happen?

The whole area in the ’80s and ’90s and even into the 21st century was a bit of a backwater, I’d say, in terms of federal-state relationships.

What’s really changed is that a number of states have said, “Hey, we want more clean energy,” because of climate change. In the last 10 years — and accelerating greatly in the last five years — we have a number of states that are pushing very hard on decarbonizing their electricity sector. And the Trump administration is resisting and aggressively creating roadblocks for states to implement their rights under the Federal Power Act to shape the electricity system that they want. This is a reversal of what you would expect from a Republican administration, where the traditional orthodoxy is that conservatives respect and encourage states’ rights. This administration does not.

We now have the technological and cost-effective possibility of cleaning up our grid and decarbonizing it in substantial degree because of the utility-scale solar and wind resources that have been developed and now compete very effectively. So the stakes are incredibly high, and there couldn’t be a worse time for FERC to come in and try to bigfoot state initiatives on clean energy.

In what way is FERC doing that?

What we see, really very baldly, is an aggressive disdain for state-based clean energy policies and state subsidies. This majority in the commission thinks that state support for a state-desired energy mix is inappropriate when it gets expressed in interstate sales. And at the same time, this commission is blind to the subsidization of incumbent fossil fuels that have occurred for the last century.

They are protecting incumbency. They are standing in the way of more competition.

An area FERC categorically does have jurisdiction is the approval of interstate gas pipelines. The commission has declined to incorporate climate impacts in the permitting process. Do you see that changing?

The commission is digging in its heels that when it comes to their public interest determination, climate change is not a relevant factor, because it’s not mentioned in the Natural Gas Act of 1938. And of course never mind that they don’t look at clean energy alternatives to delivering all this gas down to the Southeast.

FERC is not looking at today’s realities where you’ve got to think about climate, there are alternatives to gas, and there’s a much bigger appreciation that the eminent domain authority and the environmental justice implications of putting in these pipelines are extremely significant.

How do you think the election along with the lasting implications of the coronavirus could affect future FERC’s and states’ clean energy goals?

COVID-19 has obviously been an enormous challenge for our country and has made us all appreciate the fragility of human health. One of the issues that runs through everything is that the fossil fuels that are causing climate change by their greenhouse gas emissions are also causing serious adverse health effects. I think there’s a greater appreciation now for the health harms associated with conventional pollution. And I’m encouraged by the fact that climate denial is really getting marginalized now.

At the same time, largely because of the progressive states and the push for clean energy, utility scale wind and solar and distributed energy, we’ve been watching a revolution occur and prices come down. We now see a pathway forward for decarbonizing our economy. We see majorities of Americans recognizing the need to deal with climate change and a great interest for clean energy. So I’m optimistic that we can move forward. I think it will become clear that the current makeup of FERC is on the wrong side of history on these issues. Their positions will change, the only question is how quickly.

This interview has been edited for clarity and length.