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Pipeline Certificate Process Gets Face-Lift at FERC

Pipeline Certificate Process Gets Face-Lift at FERC

Regulations pertaining to the construction of new pipeline projects took the spotlight at FERC yesterday, with the Commission approving a final rule aimed at updating and streamlining the certificate process for new projects, including a change in the timetable for the filing of project-related environmental data. FERC also proposed an initiative that would give landowners greater participation in the certification process.

The companion measures unanimously approved by the Commission include a rule that expands the scope of blanket certificate authority for pipelines and requires them to comply up front with a "minimum" checklist of the environmental data needed for FERC staff to initiate a project review [[RM98-9, RM98-17]. FERC also made a number of other changes to its Part 157 regulations and issued a notice of proposed rulemaking (NOPR) that would require pipelines to notify "affected" landowners within three business days of filing their project applications.

"Since environmental review of an application consumes the lion's share of time spent processing, following this checklist will facilitate prompt consideration of applications," Commissioner William Massey said. On the downside, however, pipelines could face a "potentially sterner test" when they file project applications as a result of the "checklist" requirement, a FERC staff member noted. "There's more potential for rejection if they don't meet the minimum checklist, which was not there before. So [we've] put the onus on pipelines to come up with a more complete application at the beginning..."

Commissioner Linda Breathitt stressed the final rule will not require pipes to submit more environmental data than they do now - it only requires that the data be submitted up front when a project application is filed. Those applications not satisfying "a minimum portion of these environmental requirements risk being rejected."

The Interstate Natural Gas Association of America (INGAA) applauded the final changes the Commission made to its Part 157 regulations, the requirement that pipelines file environmental data up front and the landowner-notification NOPR. "We think the more stuff we can put up front the better. It will shorten the process. We want to do our part to speed the process up" at FERC, said INGAA President Jerald Halverson.

In the final rule, the Commission expanded blanket certificate authority for pipelines to include certain compression replacements and mainline/lateral additions, provided the "increases in capacity are incidental in nature." This was especially good news for pipelines because it means that a lot of routine projects - which now are being treated as major Section 7 (c) applications and subjected to a lengthy certification process - can be built by pipelines at their own risk and expense without prior FERC approval.

The final rule also increased the spending limit on unopposed construction projects that can be acted on by the director of the Office of Pipeline Regulation from $5 million to $20 million. Additionally, it gives pipelines the authority to automatically abandon eligible facilities subject to obtaining written consent from existing shippers.

Moreover, the rule requires a pipeline to submit a list of all landowners that would be "affected" by its project along with its application, while the NOPR calls on the pipeline to notify all "affected" landowners by certified mail within three business days of applying at the Commission. In the past, landowners weren't notified of pipeline projects until later in the process - when FERC issued a notice of intent to prepare an environmental impact statement or an environmental assessment. The three-day requirement would apply to Section 7 (c) projects and most blanket-certificate projects.

Massey said the NOPR would give landowners "earlier and more meaningful" notice of projects. He added it was "essentially consistent" with the "thrust" of the legislation proposed by Sen. Fred Thompson (R-TN) last year requiring pipelines that intended to seize private property for projects to alert affected landowners by certified mail at the outset of FERC proceedings, giving them an opportunity to participate more fully in the process. The NOPR also was in keeping with INGAA's proposal to notify affected landowners when a project application received a docket number, which normally is the day after a project is filed.

In the proposed rule, the Commission also recommended that interstate pipelines conduct public meetings prior to filing their project applications to "foster better information flow to the communities," a staff member said.

The proposal "cast[s] a wide net" in defining "affected" landowners, according to Massey. Specifically, FERC said "affected" landowners were those whose: 1) property was directly affected by the proposed activity, including all property subject to right-of-way and (ROW) temporary work space; 2) property abutted an existing ROW in which the facilities would be constructed; 3) property abutted a compressor or liquefied natural gas facility; or 4) property was in new storage fields or expansion of storage fields and any applicable buffer zone.

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