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Pipeline Certificate Process Gets Face-Lift

Pipeline Certificate Process Gets Face-Lift

Regulations pertaining to the construction of new pipeline projects took the spotlight at FERC last week, with the Commission issuing a final rule aimed at updating and streamlining the certificate process for new projects, while at the same time proposing an initiative that would give landowners greater participation in the process.

The final rule, which was unanimously approved by the Commission, expands the scope of blanket certificate authority for pipelines under FERC's Part 157 regulations, and requires pipes to comply up-front with a "minimum" checklist of environmental data to enable FERC staff to conduct more timely project reviews [RM98-9]. The notice of proposed rulemaking (NOPR), on the other hand, seeks to give "affected" landowners a greater voice in the certificate process by requiring pipelines to notify them within three business days of filing project applications at the Commission [RM98-17].

The majority of the initiatives, both final and proposed, were designed to speed up FERC's review of pipeline projects, which has been the target of industry criticism. Commissioner William Massey believes requiring advance environmental information from pipelines could avert significant delays later in the certificate process.

On the downside, however, "there's more potential for rejection if [pipeline projects] don't meet the minimum checklist," said a FERC staffer. "So [we've] put the onus on pipelines to come up with a more complete application at the beginning..."

The Interstate Natural Gas Association of America (INGAA) supported the measures. "We want to do our part to speed the process up," said INGAA President Jerald Halverson.

As part of the rule, the pipelines received an expansion of projects coming under blanket certificate authority, including certain compression replacements and mainline/lateral additions, which no longer will be subject to a lengthy certification process. These now 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.

The regulation would require pipelines to submit along with their applications a list of all landowners that would be "affected" by their projects. The NOPR seeks to take that one step further by requiring pipelines to notify all "affected" landowners by certified mail within three business days of filing applications at the Commission. Presently, landowners aren't notified of pipeline projects until much later in the process. 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. That bill required pipelines seeking 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's filed.

The proposal "cast[s] a wide net" in defining who qualifies as an "affected" landowner, according to Massey. It would cover those whose property: 1) is directly affected by the proposed construction activity, including all property subject to right-of-way (ROW) and temporary work space; 2) abuts an existing ROW in which the facilities would be constructed; 3) abuts a compressor or liquefied natural gas facility; or 4) is in the vicinity of new storage fields or proposed storage expansions and any applicable buffer zone.

INGAA's Halvorsen said the pipeline group backed the Commission's efforts to give landowners a greater role in the certificate process by involving them earlier on, although he conceded it could slow down project approvals. "We are all trying to get a handle on the landowner issue. To do this, I think you have to involve them early."

Susan Parker

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ISSN © 2577-9877 | ISSN © 1532-1266
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