Overview:
Our goal in this section is to look at how effective the FERC process is at implementing fiscal security and social progress in a holistic manner. We will be evaluating this topic through three basic criteria: environmental impact, economic value, and social benefit. After assessing these criteria, we should have a clear picture as to how the FERC process clearly affects us and evaluate ways to improve the process in order to create a more fruitful system.
Economic:
Background:
The FERC budget for the 2015 Fiscal Year indicates the overall distribution of money within their spending. The most striking figure is the section indicated as “Salaries & Benefits” which indicates over $225 Million or roughly 69% of the overall budget. FERC also accounts for the pricing for electricity for over 73% of consumption in the United States.
It’s interesting to note that in a testimony given by Chairman of FERC, Cheryl A. LaFleur, did not indicate any specific numerical values on the progress of the FERC. There are also no indications as to what this allotment of funds is given to specifically.
Compensation and Job Security:
As Fred Tutman, The Riverkeeper pointed out, the lack of public transparency within a lot of corporations associated with FERC leads to the abuse of power and a larger margin of inequality in a multitude of fronts. As of now, there is a proposed benefit of “$3.4-to-$3.8 billion liquefied natural gas (LNG) export project submitted by members of the building trades, which has been unabashed in their support of the project that would bring 3,000 construction jobs and millions of dollars in economic benefit to the county” while the county receives less than 2% of that profit. The distribution of profit is also not displayed clearly both for Calvert County and Dominion. On top of these concerns, this creation of jobs barely even addresses the major issue of economic equality within our society. The rhetoric of needing more jobs is not the issue; it’s the distribution of wealth. By looking at the employment distributions, we see that the majority of people work at retail, fast food, or other small business oriented locations as well[1][2][3]. These no collar jobs also make up the majority of the lower and middle class. Even if an energy company does bring in a few thousand jobs, this barely makes a dent in the larger issue of economic disparity as indicated by the resources above.
Crisis Management:
The California Electricity Crisis that occurred in 2001 was supposed to be managed by FERC had a plethora of complications due to a variety of pitfalls. While they did file a $6.3 billion settlement due to loss of power, Enron managed to still make over $100 billion in revenue the previous year as a part of the scandal[4]. The discrepancy is striking.
Takeaway:
The lack of clarity within the disbursement of funds, short-term costs, and long-term projections and accountability mean that this aspect of the process is in need of some large reevaluation and scrutiny. Looking at the figures above, we can see a clear divide between who is actually benefitting from these programs, and who is not.
Environmental:
As we saw within the economic domain, the figures for the environmental effects are either not promising or inconclusive. Not only do private and government entities profit without giving proper compensation to communities via tax breaks, cheaper energy, and job creation, the environmental costs are far worse. The Cove Point case highlights how certain corporations are not properly giving safety plans for the citizens in the surrounding area that directly impact health and the environment. Not only this, major projects concerning coal and natural gas which FERC oversees overlook the detrimental effects it has on the surrounding area. This is commonly known as presenting that specific location as being “collateral damage” to the greater good.
The problem is that the greater good doesn’t actually benefit that much. Without looking at the harmful cost of clean up (Ackerman, Pharo), large corporations don’t consider the long-term effects of these non-renewable recourses as a means for energy. Not only will the infrastructure collapse because it can’t sustain these rates of consumption (Klassen). This impact can also come from unconventional ways like tourism (Price) or the typical fronts: Air, Water, and Land (Johnson). Ultimately this means that we need to change our course of action.
Social Benefit:
We Built This City:
People are the fundamental piece to how and why we make decisions. Money is an important driving force to our society but it derives its power from the people. As seen by the video below, we begin to unravel why it is imperative that people become involved within the FERC process.
Community Involvement:
Building upon those points, the context of how all of this fits together solidifies the importance of this subject matter. The commissioners and other policy makers are driven by money but derive power from the people. It is crucial that we notify our policy makers and hold them accountable to these concerns. Both our health to our community and the environmental area that we live in are fundamental aspects to our being that shape how we function as a society.
The people are clearly not benefitting as much as they should be from these kinds of large scale projects and the long-term effects of chemical exposure in a certain area is only one effect of this industrialization. Lack of education, lack of nutrition, lack of clean resources, lack of opportunity- all of these aspects results in a detrimental cycle that can yield oppression for generations. It’s time we take it upon ourselves to try and resolve this problem.
Power is derived from the people. Let’s keep it that way.
References:
Ackerman, F., & Heinzerling, L.. (2002). Pricing the Priceless: Cost-Benefit Analysis of Environmental Protection. University of Pennsylvania Law Review, 150(5), 1553–1584. http://doi.org/10.2307/3312947
Johnson, Douglas. Land degradation: Creation and destruction. (1995). Environment International, 21(3), 346-347. doi:10.1016/0160-4120(95)90072-1
Klassen, R. D., & Mclaughlin, C. P. (1996). The Impact of Environmental Management on Firm Performance. Management Science, 42(8), 1199-1214. doi:10.1287/mnsc.42.8.1199
Pharo, E., & Daily, G. C. (1998). Nature’s Services: Societal Dependence on Natural Ecosystems. The Bryologist, 101(3), 475. doi:10.2307/3244191
Price, M. (1996). Preserve or destroy: Tourism and the environment. Global Environmental Change, 6(3), 249. doi:10.1016/s0959-3780(96)90028-x
[1] http://fortune.com/fortune500/2012/
[2] http://www.forbes.com/largest-private-companies/list/
[3]https://en.wikipedia.org/wiki/List_of_largest_employers_in_the_United_States#cite_note-1
[4] https://www.ferc.gov/industries/electric/indus-act/wec/chron/chronology.pdf