Memo From the Iron City: We Need to Build More. Here's How FERC Can Help.

Dispatch from The Iron City

We were in Pittsburgh, PA Tuesday for Senator Dave McCormick’s inaugural Pennsylvania Energy and Innovation Summit. Held at Carnegie Mellon University, it brought together some of the biggest leaders in energy, finance, technology, and politics to discuss the current state and future potential of the infrastructure that will not only power AI, but reshape the world around us.

There were three key themes that cut across every panel:

1. Energy. Energy. Energy. America needs a lot more energy.

2. Workers. There is a massive worker shortage for the trades and skilled labor needed to build the physical tools that power the digital transformation.

3. Building. The opportunity ahead isn’t just new datacenters, it’s a new class of manufacturing firms. But the road to build is filled with too many obstacles.

With the announcement Tuesday of over $90 billion of new investments just in Pennsylvania alone, it’s clear we don’t have a capital allocation problem. But we do need to grow our capacities.

Some of these capacity changes will rely on the culture (i.e. we hear a lot about the disruption that AI could bring to white collar work, but we don’t hear enough about the opportunities it will spawn in the physical world: working on incredible tech that provides a good salary).

But many things will require Washington to fix the process—most importantly, how we permit energy and construction projects.

Today, ALFA has a new report out on what one of those specific policy changes to permitting should be: reforming FERC’s Blanket Certificate program to provide more projects permitting ease.

The Tuesday event was too rich with anecdotes, ideas, and stories to summarize them all here. But over the coming weeks, we will be pulling on the threads that were discussed throughout the day.

If you are inclined, you can re-watch the full event here: https://www.mccormick.senate.gov/energy-summit/

ALFA Report on FERC Reforms to Get More Energy Moving

Today, ALFA released a report on an under-the-radar program (but with big potential) that is intended to fast-track construction, modification, acquisition, operation, or abandonment of natural gas pipelines.

That program is the Federal Energy Regulatory Commission’s (FERC) Blanket Certificate program. Born in the 80s, despite the good intention and promise of the program, it has not been updated to modern needs (see above!).

Natural gas is foundational to America’s energy portfolio. And to do the things we want to do—develop AI, build factories, and employ more Americans with great jobs—we need to deliver more of it.

But as Bechtel’s Brendan Bechtel stressed at Tuesday’s event, our permitting process is broken. When energy infrastructure projects that could be seamlessly approved (2-4 months) are instead hauled over to the slow lane (1-2 years of review), we are unnecessarily constraining growth, jobs, and progress.

The good news is that through FERC’s own rule making, it can retrofit a good program that is out of date with one that will jumpstart America building again.

The two reforms we are proposing are:

1. Increase the cost caps of projects so that more qualify for expedited permitting. Since 2006, the average per-mile cost of pipeline construction has risen by over 268 percent, but FERC’s prior notice cost threshold has only risen by 50 percent.

2. Expand the scope of project eligibility. Most new infrastructure doesn’t require carving new paths across the country. Instead, it involves upgrading or expanding within these existing corridors. Projects built within these corridors, using the same footprint or modest in scale, should not be treated the same as brand-new builds in undeveloped areas.

Too often we get distracted by “the future”. In doing so, it creates a permission structure to neglect what’s needed right now. But the definition of the future has changed. We are no longer living in an era of 3-6 year projections. Our future is today and to capture it we have to act now with the plentiful tools and resources at our disposal. FERC’s Blanket Certificate program can be a catalyst to meet this moment.

Read our full report here.

Secretary Bessent Joins Breitbart News, ALFA, and CGCN

As announced earlier this week, Treasury Secretary Scott Bessent will be joining us for a conversation with Breitbart’s Matthew Boyle on July 30. This will be an important event as the Secretary shares the latest on the Department’s efforts to rebalance the trade playing field and increase the opportunity for business expansion and new business creation.

This effort couldn’t come at a more consequential time as the movement to reinvest in American manufacturing (large and small) is of intense interest in the public and private sectors.

If you’d like to join us, please rsvp at [email protected] 

ALFA is a platform for ideas and technologies that enhance American life. Are you a technology company or policy advisor working on something that pulls society forward? Drop us a line at [email protected] or subscribe here.

Thanks for Reading and Have a Great Day

🇺🇸🇺🇸🇺🇸