"What the FERC!": The Federal Energy Regulatory Commission Gets Politicized // The Russian Connection: Germany's Borderland Refinery // Gasoline Price Gouging Bill Leaves the House

"What the FERC!": The Federal Energy Regulatory Commission Gets Politicized

FERC has been dragged into swing-state elections. E&E reports, "A Republican-aligned political advocacy group has launched a six-figure digital advertising campaign targeting the Federal Energy Regulatory Commission and Democrats in swing states."

The Common Sense Leadership Fund paid for the ads, which are "the first phase in a 'sustained six-month' campaign to draw attention to policies from FERC and the Biden administration that the group says have contributed to high energy costs."

"A national version of the ads, with images of Biden, House Speaker Nancy Pelosi (D-Calif.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.), are running on Google, Facebook and YouTube in Washington, D.C., the group said. Similar ads featuring images of Sens. Maggie Hassan (D-N.H.) and Catherine Cortez Masto (D-Nev.) are running on the same platforms in New Hampshire and Nevada, respectively," reports E&E.

The ads call FERC "Biden's bureaucrats" and accuse the commission of intentionally raising energy prices for Americans, specifically gasoline prices, though FERC has very little impact on gas prices or jurisdiction over refineries.

It is true, however, that many of the "organized markets" that FERC oversees have been onboarding renewables at an alarming pace and are suffering reliability issues and high prices as a result. FERC's own Chairman James Danly recently said at a conference that FERC's new transmission rulings seemed to privilege states with strong commitments to renewables. I attended an ISO-New England CLG meeting earlier in the year in which FERC chairwoman Alison Clements insisted that FERC's role had to be limited per its charter, but then followed her statement up by saying that the climate crisis "changes everything." Her statements seemed to imply that FERC's charter fell under the umbrella of "everything."

That's what's interesting about the E&E piece: many within it express surprise that FERC has even come up as a campaign topic. They worry that FERC is being "politicized." But climate politics have already politicized it.

Since the ads relate FERC's rulings to the price at the pump, they're misleading and unhelpful. But if FERC and the Democrats think that they can rubberstamp their climate agenda through seemingly neutral regulatory commissions without it getting "politicized," then they've got another think coming.

The Russian Connection: Germany's Borderland Refinery

Berlin might run out of fuel unless German officials can wrangle a way to keep the PCK refinery on the Polish border "from falling victim to geopolitics," reports Bloomberg.

The refinery is a "Cold War relic" that supplies Berling with most of the jet fuel for its airport and gasoline for eastern Germany's vehicles. Located in the small town of Schwedt, the refinery could cease operations by the end of the year if the EU's Russian oil embargo succeeds.

"The PCK refinery is directly connected to a pipeline pumping Russian crude from the other side of the Ural mountains," Bloomberg reports. "Because the facility is far from a major port, there’s no easy alternative, and the fact that it’s controlled by the Kremlin’s oil champion Rosneft PJSC multiplies the complexity."

According to the town's mayor, Annekathrin Hoppe, “virtually every plane, police car, fire truck and ambulance [in eastern Germany and western Poland] is powered by fuel from Schwedt." To close PCK “would be a disaster.”

No easy solutions to this problem suggest themselves. The situation provides an object lesson that decades-old infrastructure projects can't be turned on a dime to suit current political needs.

Gasoline Price Gouging Bill Leaves the House

The Democrats have been haranguing oil companies for Americans' pain at the pump. The Biden administration has taken to blaming the high prices on Putin and "greedy oil executives." After hauling O&G execs in for a hearing earlier this year, during which they explained the basics of the market to representatives, the House has passed a bill meant to go after major oil companies for price gouging.

"The bill, known as the Consumer Fuel Price Gouging Prevention Act, or H.R. 7688, passed with a vote of 217-207," Oilprice.com reports. "No Republicans voted for the bill, and four Democrats voted against it, including Stephanie Murphy, Lizzie Fletcher, Kathleen Rice, and Jared Golden."

If it were to get through the Senate, where it will face much stiffer resistance because it needs ten Republicans to pass, "the FTC and state attorneys general would have the power to enforce a federal ban against excessive price increases and issue penalties, no matter where that seller is along the price chain. It would also increase company requirements for disclosing their pricing strategies in SEC filings."

The bill would also give the President the power to declare a national emergency or an "abnormal market disruption" during which he would be able to stop price hikes. Nationalization is one thing--and it's not uncommon for countries to own their oil and gas companies--but dictatorial control over a vital sector of the economy is a different ballgame.

Counter to the claims of price hiking, the industry insists that government policy, labor shortages, supply chain constraints, and shortages of refining capacity are to blame for the high pump prices.

As I write this, the national average gas price per gallon is $4.589; "a new high and a $.17 per gallon increase from a week ago according to AAA."

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