On July 19, 2017, the U.S. House of Representatives passed a pair of bills aimed at reforming natural gas and oil pipeline permitting, and granting additional authority to the Federal Energy Regulatory Commission (“FERC”). Both bills passed on largely party-line votes. The two bills are H.R. 2883, Promoting Cross-Border Energy Infrastructure Act, and H.R. 2910, Promoting Interagency Coordination for Review of Natural Gas Pipelines Act. H.R. 2883, removes the current requirement that gas and oil pipelines, as well as electric transmission projects, obtain a Presidential Permit to cross an international border. Instead, pipelines would obtain a certificate of crossing from FERC and transmission projects would obtain such a certificate from the Department of Energy. If enacted into law, this change would mark a significant change for oil pipeline projects. FERC currently has no authority over any aspect of interstate oil pipeline siting. Currently, all siting decisions not on federal lands are handled at the state level, with international border crossings overseen by the State Department through the presidential permit process. FERC does, however, oversee the siting of interstate natural gas pipelines, including Presidential Permits for international border crossings, under current law.
This week’s enforcement update covers:
- CFTC enters into non-prosecution agreements with former Citigroup Global Markets Inc. traders in spoofing case;
- CFTC orders $5.2 million in civil penalties for wash sales designed to generate exchange rebate fees;
- FERC hosts technical conference on developments in natural gas index liquidity and transparency;
- Senate Energy & Natural Resources Committee releases new energy bill;
- President Trump announces intent to nominate Richard Glick as FERC Commissioner;
- FERC Enforcement and City Power file status report on settlement; and
- Judge grants Kraft Foods motion to compel discovery from the CFTC.
On Tuesday, October 11, 2016, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) revealed a pipeline civil penalty framework on its website. PHMSA will allow a respondent in an enforcement case to request a proposed civil penalty calculation related to its case.
PHMSA’s current caps for administrative civil penalties occurring on or after August 1, 2016, are $205,638 per day and $2,056,380 for a related series of violations. PHMSA states that its penalties may exceed the guideline amounts to “serve as a strong deterrence, driving down incident risk.”
PHMSA’s guidelines provide the following “assessment considerations” for determining penalty amounts: nature; circumstances; gravity; culpability; history of prior offenses; good faith; and other matters as justice may require.