Acting on remands from two separate appellate courts, FERC last Thursday upheld a prior order declaring part of Transcontinental Gas Pipeline's (Transco) pipeline network located onshore and offshore Louisiana to be transmission in nature and thus subject to agency jurisdiction, but it reversed itself on Jupiter Energy Corp. and found its small pipeline offshore Louisiana to be exempt gathering.
Both cases have a long, circuitous history at the Federal Energy Regulatory Commission and in the courts. In August 2001, FERC ruled that the Transco facilities in question were unregulated, exempt gathering and could be spun down to affiliate Williams Gas Processing-Gulf Coast Co. However, the Commission reversed the order in April 2005, finding that Transco's facilities downstream of an interconnection with Jupiter Energy were transmission subject to FERC jurisdiction (see NGI, April 25, 2005). Transco challenged the decision in the U.S. Court of Appeals for the District of Columbia Circuit, which in December 2006 vacated the order and remanded it to FERC (see NGI, Dec. 25, 2006).
As for Jupiter Energy, FERC has twice declared its small pipeline offshore Louisiana to be transmission in nature and thus subject to the Commission's jurisdiction, and twice the Fifth Circuit Court of Appeals has remanded the case back to the agency. The question of the jurisdictional status of the line has been batted around FERC since 2002 when Jupiter Energy first filed to qualify as an exempt gathering line.
In last Thursday's orders, FERC concluded that the Jupiter facilities -- which consist of a 10.2-mile long, 10.75-inch diameter pipeline and 3.2-mile long, 8.265-inch diameter pipeline located offshore Louisiana -- function primarily as gathering facilities that are not subject to the jurisdiction of the Commission. Jupiter Energy had sought the "gathering" declaration as part of a proposal to transfer the facilities to its parent, Union Oil Co. of California, to use in its gathering system.
In upholding its prior Transco order, FERC said it found that jurisdictional transmission was the primary function of Transco's 12.43-mile long, 24-inch diameter lateral that receives gas from Jupiter Energy's facilities in Vermilion Block 22 and transports it to shore, where it enters Transco's other jurisdictional transmission facilities.
FERC ruled that the 12.43-mile segment of Transco's pipeline is really a portion of one continuous 37-mile, 24-inch diameter pipeline, which it said was typical of a shallow-water transmission facility.
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