Reconstituting the Federalism Battle in Energy Transportation

Abstract

This article explores the growing federalism tensions in efforts to expand the nation’s energy transportation infrastructure — the electric transmission lines, natural gas pipelines, natural gas import and export terminals and related infrastructure that power the U.S. electricity and transportation systems. It uses two illustrations — one involving an interstate electric transmission line (subject to state jurisdiction) and one involving and an interstate natural gas pipeline (subject to federal jurisdiction) — to highlight how the clear jurisdictional lines between federal and state authority over these projects created decades ago is no longer adequate for today’s energy needs. We believe that many of the recent efforts by states and federal agencies to re-draw these jurisdictional battle lines in the context of particular projects have been counterproductive. They have they encouraged interest groups to entrench their respective positions in favor of state or federal regulatory power. They also have thwarted comprehensive and efficient energy planning, and have stood in the way of greater integration of new technologies and more diverse energy resources. Ultimately, we conclude that federal regulators — which have historically been much more attuned to federal and national energy needs in making project siting decisions — must be more proactive in addressing state interests and concerns associated with multi-state energy transport projects in cases where federal siting authority trumps that of the states. Likewise, for projects where the states possess primary regulatory authority that acts as a potential veto point over projects that promote federal and regional energy needs, a more significant federal role in evaluating those federal and regional needs is warranted.