FERC last week approved an amended certificate for SouthernNatural Gas (Sonat) to build a controversial mainline extensionthat’s intended to provide customers with an alternative to theexisting pipeline now serving northern Alabama. The fate of theproject, however, still hangs in the balance since the InteriorDepartment’s Fish and Wildlife Service (FWS) hasn’t yet issuedSonat a permit to build through a protected wildlife refuge.

Nevertheless, the Commission’s decision was a major win forSonat and other supporters of the pipeline project, but a big, yetexpected, blow for landowners and environmental activists who havebattled the project for nearly three years, and who promise tocontinue in court. “We’re very pleased” with the order, said DavidHendrickson, assistant general counsel of Sonat. However, GASPCoalition Chairman Anne Marie Mueser, who represents landownerinterests, called it a “bad” decision all around.

By a majority vote, the Commission denied rehearing of its May1997 order certificating the Sonat extension and requests for stayof construction, and approved an amendment to the originalcertificate that would permit the pipeline – in accordance with FWSinstructions – to build the southern section of the expansion alongthe existing Interstate 65 corridor in the Wheeler NationalWildlife Refuge [CP96-153-002]. Sonat doesn’t have an FWS permitfor that portion yet, but Hendrickson said the pipeline believes itwill be forthcoming within 60 days. Sonat initially had proposedconstructing the first leg of the extension along a “new” corridorin the refuge, but the FWS flatly rejected that option.

In a final environmental impact statement issued last Wednesday,the Commission staff found the amended route for the Sonatextension would have “limited adverse environmental impact” ifconstructed as planned and additional mitigation measures werefollowed. “Several factors were important in our determination.About 76% of the land that would be affected is unforested and itwould revert to its previous land use after construction. Inaddition, a successfully completed directional drill of theTennessee River area would avoid impacting federally listedthreatened and endangered species…Finally, Southern’s proposedpipeline route is consistent with the FWS policy regarding theestablishment of new corridors across the Wheeler [NationalWildlife Refuge]…”

The Sonat case, which has been contentious from the verybeginning, had been scheduled as a discussion item at lastWednesday’s meeting, but at the last minute it was pulled and votedon as a consent agenda item, which raised some eyebrows. “I find itvery interesting that they didn’t have the guts to discuss thisthing in public before rubber-stamping it,” Mueser complained.”Certainly there are issues that were worthy of discussion. Therehas been nothing straightforward about this process since Day One.”

A Commission staff member, however, dismissed such a notion.”…The Commission decided there was no need to talk about it. Thatsometimes happens with regular agenda items. So it was simplycalled with the consent agenda,” which is the fate of most FERCorders, especially ones which have been discussed before and justinvolve a few changes.

Mueser, who has been at the forefront of the effort to halt theSonat project, sees a bright side to FERC’s decision not to discussthe case. “…[W]e now can go into court and hopefully get a fairhearing on the issues and the merits.” She noted that the originalcertificate and the original route “up to the amendment” are nowripe for court review. “I expect to be getting this into court [theD.C. Circuit Court] before Christmas.” In addition, Mueser plans toseek rehearing of the amended route at the Commission.

Once in court, “…I think that we’re going to be able to raisethe whole issue of eminent domain in a deregulated industry usingthis project,” she said. “I think we have a constitutional issuehere involving private property rights, and I think we also havemajor environmental issues.” Mueser said GASP will ask the court toblock construction of the Sonat extension until all issues aresettled.

More immediately, “we’ll be spending a lot of effort in the nextfew weeks to make sure they [Sonat] don’t get a permit.” This is a”major hot-button issue,” she noted. “Should Fish and Wildlifeissue a permit to cross the refuge…we will have them in court aswell.”

The 120-mile, 70 MMcf/d mainline extension would start atTuscaloosa, AL, and would extend in a northeasterly directionending just west of Huntsville, AL. Sonat proposed the projectmainly to provide alternate transportation to two Alabamautilities, Decatur Utilities and Huntsville Utilities, currentlysole-source customers of Midcoast Interstate Transmission. It alsowould provide service to three of Sonat’s existing customers thatwant to increase their firm transportation quantitites. Thepipeline said it hopes to begin construction on the extension byspring 1999 with deliveries to start Nov. 1.

In a related filing, the Commission denied rehearing of itsdecision dismissing Midcoast Interstate’s application to build whatthe pipeline claimed was an environmentally preferable alternativebecause Midcoast failed to demonstrate market support and it wouldenable Midcoast to maintain its regional dominance.

But acknowledging “continued uncertainty” over whether the Sonatextension will be built, FERC provided for an “interim solution” ina related proceeding, granting Midcoast a one-year extension tooperate two extra compressors to serve the growing demand forcapacity in northern Alabama.

Susan Parker

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