In our latest series, we’re reporting on some of the arguments and testimony presented before the MPSC on Enbridge’s phase two application. And as we do, we’ve been thinking about and discussing how well the MPSC fulfills (what we view as) its obligations, as a state regulatory body, to the citizens of the state of Michigan. In our first installment, we introduced you to the MPSC’s public engineer Travis Warner, who (to be blunt) appears not to be working all that hard when it comes to analyzing Enbridge’s application. In our second installment, we introduced you to MPSC staff attorney Michael Orris, who does seem to be working hard– that is, working hard on behalf of Enbridge, rather than on behalf of the public that pays his salary.
So far, we’ve mostly left the Administrative Law Judge in this matter, Theresa Sheets, off the hook. But make no mistake, we’re as baffled by her willingness to accept Enbridge’s arguments (at nearly every turn) as we are by Michael Orris’s. In this our third installment, we take a closer look at Judge Sheets and one of the more troubling ways she has allowed Enbridge to frame and determine the direction of the Enbridge proceedings.
To begin, it’s worth taking note of Judge Sheets’s background. She is still listed (on their website) as an employee of the Lansing firm Loomis, Ewert, Parsley, Davis & Gotting. According to her profile there she
is experienced in oil and gas law, including issues of land use, negotiation of oil and gas leases, representation of clients in matters before the Michigan Department of Environmental Quality under oil and gas laws, negotiation of wind leases, and various aspects of wind farm development.
Presumably, it is this experience that got her appointed to be ALJ at the MPSC. Yet we also presume that her “oil and gas law” experience does not entail advocating on behalf of those who might somehow find themselves at odds with large oil and gas interests. Why do we so presume? Well, for one thing, because her (former?) firm:
represents a number of oil and gas producers operating within the State of Michigan. The firm is widely recognized for its expertise in oil and gas law, and has rendered legal services for the oil and gas industry for more than 30 years. Our presence in Lansing, Michigan, results in convenient access to all state regulatory agencies having jurisdiction over oil and gas operations.
And for another thing, Sheets’s Loomis profile also notes that she is (or was) a member of the Michigan Oil and Gas Association. Who are they? Well, according to their website, the MOGA:
represents the exploration, drilling, production, transportation, processing and storage of crude oil and natural gas in the State of Michigan. MOGA has nearly 1,000 members of which includes independent oil companies, major oil companies, and the exploration arms of various utility companies. . . The organization has been described as the collective voice of the petroleum industry in Michigan, speaking to the problems and issues facing the various companies involved in the states crude oil and natural gas business.
And for one more thing, her profile touts the fact that she “has lectured on leasing; title and trust ownership at conferences of the Michigan Association of Professional Landmen.” Who are they? Well, they’re a group made up of “individuals responsible for the acquisition, administration and disposition of mineral and/or surface rights for petroleum exploration and production companies…” That’s right, it’s an organization for people who work as ROW agents (you know, just like the ones so many of us have gotten to know over the past year or so). Judge Sheets is (or was) a member of that organization as well.
Now, what does all this mean? It’s certainly not terribly surprising that someone with the sort of experience Theresa Sheets has had would wind up working for a state agency ostensibly responsible for regulating the same industry clients for whom she worked. This kind of thing is totally routine– as we learned, for example, about PHMSA at the PS Trust conference last November. And, theoretically at least, we’ll even concede that it’s possible that one could spend a significant portion of one’s career advocating for a particular industry and still be impartial as a regulator of that industry.
Nevertheless, this work history gives us some pause. Does it rise to the level of a conflict of interest? We don’t know. But if nothing else, it’s safe to say that Judge Sheets has been trained to approach and think about “oil and gas law” from the industry’s point of view, not from the point of view of those who might be critical or skeptical of the claims made by that same industry, like ordinary landowners. We wonder: is it really too much to ask that those tasked with scrutinizing the claims of an oil company have some genuine experience advocating for someone other than those oil companies? Like, for example, those whom that same oil company might potentially harm or abuse?
Which brings us back to the phase two proceedings. Inexplicably, Judge Sheets has had no trouble accepting nearly every argument made by Enbridge throughout these proceedings. In fact, there are only two instances we have come across (perhaps there are others we have missed) where she has in any way contravened the claims or wishes of Enbridge: there was the moment when, at an August hearing, she stated that she believed that the state constitution required Enbridge to seek local consent before beginning construction; and there was her ruling granting intervenors additional time in order to review the just-released NTSB report.
Of course, neither the statement nor the granting of additional time has made any substantive difference since, in both cases, Judge Sheets also ruled that neither the “local consent” provision in the state constitution nor the NTSB report were relevant to the MPSC matter at hand; in fact, she has specifically excluded both from the proceedings. And this is the crucial point here: Enbridge attorneys have labored to so limit the scope of the MPSC’s authority so severely as to cripple it– and Judge Sheets has helped them succeed.
We’ll explain precisely how she has facilitated Enbridge’s strategy in a separate post (installment 3.1!), as this one has already gotten much longer than we’d planned. Stay tuned.
I am representing the three landowners who intervened in Case No. U-17020. Like the ALJ, Theresa Sheets, I was formerly employed at the Loomis Law firm for several years until I left in 2005. Thus, I known Theresa as a co-worker for several years. My personal opinion is that Theresa is fair and non-biased, even though she ruled against motions and requests I made on several occasions. I think the true motivation behind Theresa’s rulings is not any type of bias, but rather immense worry. Enbridge has done a good job creating the impression that it merely trying to repair a pipeline that needs repair. Theresa is like many other public representatives we have encountered, she does not want to contribute towards another catastrophic rupture, by denying a “repair.” As the old adage goes, “better safe than sorry.”
What I find frustrating is that the true cause of the devastation resulting from the Marshall rupture was not the condition of the pipe. It was the people operating the pipeline. There are frequent minor leaks that occur in oil pipelines all the time. This leak would have been just another routine matter – which no one would have ever heard about- if Enbridge had responded properly. But once a leak starts, if the oil is permitted to continue to flow at hundreds of pounds of pressure, a small opening becomes a larger and larger opening. Enbridge permitted the flow to continue for 17 hours.
Thus, replacing the pipe doesn’t address the root cause of the devastation. There are many causes of pipeline ruptures other than external corrosion. The problem of external corrosion can be effectively addressed by a conscientious maintenance program. Consequently. the attitude of “let’s just replace the whole thing” is a gross overreaction that misses the mark and is not a considered response.
Thanks for the comment, Gary. Obviously, you know Sheets much better than I do. But I wasn’t really trying to make the case that she is “biased,” exactly. I think it’s something more subtle: an inclination, based on her professional experience, to see things from the point of view of the oil companies, an inclination that seems to preclude the kind of healthy skepticism that I believe should be fundamental to the way a regulatory body functions.
Of course, I’m sure you’re right about her sincere interest in not wanting to contribute to another rupture, but that is hardly any reason just to let Enbridge attorneys have their way at virtually every turn. In fact, as I am going to suggest in the second part of this post (and as I believe you know very well, probably better than me), the Enbridge arguments she continues to accept will reverberate, to the detriment of state regulatory and statutory authority, well beyond this case.
Lastly, you’re obviously dead right about the real causes of Marshall. I’ve repeated that point here over and over and over again.