Sound and fury over energy nominee Ron Binz

Ron Binz – President Obama's pick to head an obscure federal agency – has energy insiders drawing battle lines. Is the Federal Energy Regulatory Commission the next flash point in the debate over US energy?

An esoteric federal agency is emerging as a new and unlikely flash point in the debate over America’s energy mix.

Ron Binz, President Obama's pick to head the Federal Energy Regulatory Commission (FERC), has drawn scrutiny from energy groups and lawmakers wary of his public proclivity for renewable energy. As FERC commissioner, Mr. Binz would regulate the interstate transmission of electricity, natural gas, and oil. It's an increasingly important role as debates over pipelines, exports, and grid infrastructure dominate the energy industry.

Special interests have further elevated what has traditionally been a low-profile, highly-technical position, transforming yet another presidential appointment into an outsize struggle between partisan interests.  

"You have Tom Steyer on the left and the Koch brothers on the right generating the pros and cons on the FERC nominee," said Marc Spitzer, a former FERC commissioner, referring to the billionaire environmentalist and the oil-wealthy siblings. Both groups reportedly have financial ties to either side of the Binz debate.

"Is [politicization of presidential appointments] the new normal?" asked Mr. Spitzer, who is currently a partner at Washington-based Steptoe & Johnson LLP. "I think it’s sad, but the fact is that politics have changed in this country." 

Backers call Binz a forward-thinking but level-headed regulator unafraid of challenging the status quo. Critics fear he will push too hard to decarbonize the nation's grid, drive up electricity prices and slow economic recovery.

"There’s a lot at stake at FERC, more than most people realize," Sen. Lisa Murkowski (R) of Alaska said in prepared testimony for Binz's confirmation hearing Tuesday. "By one rough measure of economic impact, the energy transmitted over FERC-regulated pipes and wires is worth well over $400 billion per year. Most Americans feel the impact of FERC’s decisions in hundreds of individual cases and controversies – ultimately, we are talking about money from their pockets and the quality of their energy service."

Ms. Murkowski, the leading Republican on the Senate Energy and Natural Resources Committee, said Tuesday she opposes Binz's nomination over concerns the nominee was biased against fossil fuels. She cited reports of a public relations firm lobbying on Binz's behalf as a threat to the agency's impartiality.

"We may not have seen an effort like this before, and with good reason," Murkowski said in prepared testimony. "Again, FERC is an independent agency. This kind of paid effort, for and with the cooperation of the nominee, must not become 'the new normal.'" 

Binz finds himself in the hot seat because of comments he made earlier this year downplaying the long-term role of natural gas – a fuel many believe to be a key to US energy security. Moving to the fuel in the near term might be "a good move," Mr. Binz said at a panel in March, but natural gas will "dead end" by 2035 without carbon-capture technology. 

At his hearing Tuesday, Binz walked back those statements, calling natural gas "a terrific fuel [that's] needed right now and may be in the permanent energy mix,” as reported by The Hill. Still, he defended the need to decarbonize gas power as a means to reduce greenhouse gas emissions and said the technology could be developed within 20 years time. 

Natural gas power is a greenhouse-gas emitter but at roughly half the rate of coal. Controversial new drilling techniques have unlocked vast quantities of the gas in North Dakota, Pennsylvania, and elsewhere across the country. It currently makes up about 30 percent of the nation's electricity mix.

Between 2007 and 2011, Binz chaired the Colorado Public Utility Commission where he helped draft a law that bolstered wind and solar development in an effort to cut emissions. The plan also led to the state's largest power company transitioning coal plants to gas plants at ratepayers' expense. 

Binz's supporters say that's exactly the kind of eye towards the future that is needed at FERC.

"This remarkable energy transition has little to do with any plot against Colorado’s coal-fired power plants," Mindy Lubber, president of Ceres, a sustainability advocacy group based in Boston, wrote in Forbes last month. "It has a lot more to do with economics, smart planning, and prudent risk management.

"Over his 34-year career in energy policy, Binz has developed the skills and the experience to guide the U.S. electric power sector," she added.