Whether it’s in Washington, D.C., or right here in Louisiana, the depth and power of the regulatory state is attracting quite a bit of attention and rightful scrutiny. What’s the proper balance between elected bodies and administrative agencies, and how do voters ensure proper oversight?

While the Louisiana Legislature is actively advancing common-sense measures that rebalance power and provide legislative oversight to the administrative state, a little-known but important issue is brewing at the Louisiana Public Service Commission (LPSC) that could have far-reaching implications on energy development in the state.

A recent decision by an Administrative Law Judge (ALJ) could quietly but dramatically expand the scope of LPSC authority and lead to sweeping new compliance obligations on the crude oil and liquids midstream sector—an industry that serves as the logistical backbone of America’s energy economy.  The case, Cantium, LLC v. Rosefield Fourchon Operating, LLC, stems from a high-stakes dispute between two companies over the pricing of storage and terminaling services. When discussions between the two broke down, one company brought the private dispute to the LPSC and asked the government to intervene, a problematic first step.

Both parties seem to agree that the Commission should not expand its regulatory authority over all terminal and storage facilities. That’s the good news. The bad news is that the LPSC’s Administrative Law Judge, an unelected position, issued a flawed reinterpretation of Louisiana statute, which threatens to overturn decades of precedent.

The stakes are high. A new economic impact report conducted by Dr. David Dismukes on behalf of the International Liquid Terminals Association estimates that compliance costs will reduce Louisiana’s economic output by approximately $300 million, eliminate 1,428 job-years, and decrease labor income by $100 million. Furthermore, a projected 20% reduction in capital investment, driven by heightened uncertainty and increased costs, could result in over $250 million in lost economic activity in the coming years.

The results – intended or unintended – of the ALJ ruling also run counter to President Donald Trump’s pro-growth energy agenda. Since taking office, President Trump has issued a slew of executive actions to streamline permitting, cut regulatory red tape, and direct the U.S. Department of Justice to challenge state and local policies that obstruct domestic energy development. This would be at odds with the direction of the President’s agenda.

Perhaps even more troubling is the process through which this decision was made. Despite their neutral-sounding title, Administrative Law Judges operate within the very agencies whose regulatory interests they adjudicate. This internal structure creates an inherent conflict of interest, allowing agency priorities to overshadow objective legal reasoning. Such arrangements demand rigorous oversight to ensure that decisions align with statutory intent and the public’s best interest.

Given the stakes and far-reaching implications, the ALJ ruling should be rejected, and both the LPSC and the Louisiana legislature should act swiftly to clarify regulatory boundaries. Regulators should pursue pro-growth, pro-investment policies that build on Louisiana’s energy strengths, not layer on new, unjustified regulations that could threaten to dismantle them. 

In addition, lawmakers could help remedy the situation by clarifying the boundaries of the LPSC’s authority and discouraging the expansion of government regulations through ALJ decisions in the future. House Bill 494, by Rep. Jessica Domangue (R-Houma), does just that, and lawmakers should pass it. By prioritizing predictability, fairness, and a regulatory environment that encourages, not penalizes, energy investment, Louisiana can protect its economic future and reinforce its central role in securing American Energy Dominance.