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FERC Considers Sea Robin, OCS Regs

FERC Considers Sea Robin, OCS Regs

A decision on the remanded Sea Robin Pipeline case and discussion of policy changes in the way the Federal Energy Regulatory Commission regulates offshore pipelines both are on the agenda for Wednesday's open meeting, but no one will be surprised if they're a no-show once again.

The two items whose fate appears to be intertwined have made it as far as the Commission staff's pre-agenda meeting once before, only to be relegated again to a dark closet in the face of irreconcilable differences among commissioners. The differences revolve around the distinction between a jurisdictional pipeline and a non-jurisdictional gathering system and FERC's regulation or not of offshore lines in the brave new world of non-merchant pipelines.

It has been almost two years since the Fifth Circuit Court of Appeals remanded the Sea Robin case (96-60536), telling FERC to use its own physical facilities guidelines to determine the Gulf of Mexico line's jurisdictional status, rather than relying on the fact that it is pipeline-owned and had previously been certificated. The Court also suggested the Commission might want to look at reformulating its criteria. In February, 1998 the court turned down FERC's rehearing request.

In response to the court FERC issued a Notice of Inquiry (RM98-8) a year ago asking the industry for suggestions for a "simple" and "common sense" approach to offshore regulation. Responses varied from producers' demands for a strict test and regulation under the Natural Gas Act (NGA) to pipelines' pleas for less regulation under the Outer Continental Shelf Lands Act (OCSLA).

Sources say commissioners are split, and while a continuation of NGA jurisdiction with a revised test most likely would win the day, it would be a 3-2 vote, which would make it less defensible in court and likely to be revisited.

As for Sea Robin, the most likely outcome if the Commission's current "Farmland primary function test" which assesses diameter, length, location and design is applied, would be for it to be declared part fish and part fowl, with its central system a regulated transport pipeline and the outlying areas, unregulated gathering. This would be similar to a decision in a case involving Shell Gas Pipeline (CP96-159) two years ago, and it would give an offshore line owned by a pipeline the same treatment as an offshore producer-owned pipeline.

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