U.S. FERC Issues Two Orders Clarifying the Scope of its Natural Gas Act Jurisdiction
On September 22, 2022, the U.S. Federal Energy Regulatory Commission’s (FERC) denied two separate complaints against natural gas pipelines located entirely within one state that turned on whether FERC had jurisdiction over the facilities under the Natural Gas Act (NGA). (more…)
Pipeline and Hazardous Materials Safety Administration Completes Gas “Mega Rule”
On August 24, 2022, the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA) published in the Federal Register a final rule entitled Pipeline Safety: Safety of Gas Transmission Pipelines: Repair Criterial, Integrity Management Improvements, Cathodic Protection, Management of Change, and Other Related Amendments (Final Rule). (more…)
Fifth Circuit Says FERC Can’t Stop Rejection of Filed-Rate Contracts in Bankruptcy
On July 19, 2022, the U.S. Court of Appeals for the Fifth Circuit held that debtors in bankruptcy may reject regulated energy contracts, vacating two Federal Energy Regulatory Commission (FERC) orders to the contrary, in Gulfport Energy Corp. v. FERC. The question turned on how a party’s ability to reject executory contracts in bankruptcy interacts with FERC’s ability to determine whether a party can abrogate or modify contracts that constitute filed rates under a doctrine referred to as Mobile-Sierra. The court found that FERC cannot use its Natural Gas Act authority over contract abrogation and modification to countermand a debtor’s bankruptcy-law rights or the bankruptcy court’s powers.
FERC Jurisdiction Upheld in Puerto Rican Liquified Natural Gas Terminal Proceeding, New Fortress Energy Inc. v. FERC
On June 14, 2022, the U.S. Court of Appeals for the District of Columbia Circuit upheld the Federal Energy Regulatory Commission (FERC) finding of jurisdiction over New Fortress Energy LLC’s (New Fortress) liquified natural gas (LNG) import terminal facility in San Juan, Puerto Rico, in New Fortress Energy Inc. v. FERC. (more…)
FERC Rolls Back its Recently Enacted Policy Statements on the Certification of New Natural Gas Infrastructure
The Federal Energy Regulatory Commission (FERC) announced on March 24, 2022, that it will delay enacting any changes to its existing policies on the authorization or certification of interstate natural gas pipeline infrastructure under Sections 3 and 7 of the Natural Gas Act. Two policy statements FERC issued on February 18, 2022, in Docket No. PL18-1 and Docket No. PL21-3 (collectively, the 2022 Certificate Policy Statements) have now been deemed “drafts” that are subject to further comment. Initial comments will be due on April 25, 2022, with reply comments due on May 25, 2022. One of the two policy statements, which had been deemed “interim” but given immediate legal effect on February 18 prior to being relabeled a “draft” on March 24, had an initial comment date of April 4, 2022, which has now been extended to the aforementioned dates. Sidley provided a detailed summary of the changes implemented in the 2022 Certificate Policy Statements in a prior client alert and Energy Brief. (more…)
Climate Change Takes Center Stage in FERC’s Updated Policy on the Certification of New Natural Gas Infrastructure
On February 18, 2022, the Federal Energy Regulatory Commission (“FERC”) announced for the first time that it will consider a proposed natural gas infrastructure project’s impact on climate change as part of its public interest determination under sections 3 and 7 of the Natural Gas Act (“NGA”). A proposed project’s environmental effects, including reasonably foreseeable greenhouse gas emissions that may be attributable to the project and the project’s impact on environmental justice communities, now will become part of FERC’s balancing test for whether a project is: (1) required by the public convenience and necessity (“PCN”) under NGA section 7; (2) or in the public interest under NGA section 3. FERC’s prior PCN policy prioritized economic factors to define public need. Environmental effects, while considered under the NGA, were addressed primarily under the National Environmental Policy Act (“NEPA”). (more…)
Fourth Circuit Vacates Mountain Valley Pipeline Approval
On Tuesday, the U.S. Court of Appeals for the Fourth Circuit vacated, for the second time, the record of decision issued by the U.S. Forest Service and Bureau of Land Management allowing the Mountain Valley pipeline to cross three and a half miles of the Jefferson National Forest in Virginia and West Virginia. (more…)
TSA Issues Directive to Enhance Pipeline Cybersecurity
The U.S. Department of Homeland Security’s Transportation Security Administration (“TSA”) issued a Security Directive, “Enhancing Pipeline Cybersecurity” on May 28, laying out new cybersecurity requirements for operators of liquids and natural gas pipelines and LNG facilities designated as critical infrastructure. (more…)
FERC Climate Change Concerns to Delay Five Pending Natural Gas Pipeline Projects
On May 27, 2021, the Federal Energy Regulatory Commission (FERC) indicated that it would increase the timeline for making a decision on five pending applications for Natural Gas Act (NGA) Section 7 certificates of public convenience and necessity when it issued notices of intent to prepare an environmental impact statement (EIS) to each of the project sponsors. Each of the applications concern pipeline expansion projects that were the subject of environmental assessments (EAs) performed by FERC staff. The notices state that the new EISs will tier off of the existing EAs and will be limited in scope to assisting FERC in its consideration of the subject projects’ contribution to climate change in the FERC decision-making process.
FERC Dismisses Requests for Rehearing in Algonquin Gas
On May 19, 2021, the U.S. Federal Energy Regulatory Commission (FERC) issued an order dismissing rehearing requests (Dismissal Order) of its February 18, 2021, Order Establishing Briefing in Algonquin Gas Transmission, LLC (Docket No. CP16-9-012) (Briefing Order). The Briefing Order had found that concerns raised regarding the operation of a compressor station that FERC had authorized to place into service on September 24, 2020, warranted further consideration. FERC set the matter for a paper hearing, with deadlines established for initial and reply briefs. The Briefing Order drew fierce criticism in dissents by Commissioners Mark Christie and James Danly on grounds that FERC was acting outside of its statutory authority and resulted in over 100 comments and briefs filed by a diverse group of pipeline industry members and advocates, environmental nongovernmental organizations and consumer groups, and former FERC commissioners as well as requests for rehearing by the affected pipeline and four individual trade associations representing pipeline operators, investors, and shippers.