Interstate natural gas pipelines scored a key victory last Wednesday in a final FERC rule that gives pipes “additional flexibility” to rebuild damaged facilities and restore service following an “emergency interruption,” whether caused deliberately or not.

In the proposed rule issued in January, the Commission asked pipelines to comment on whether the scope of its initiative relaxing construction regulations should be limited to emergencies caused by the “deliberate damage” of terrorists, or whether the rule should also apply in cases where the damage wasn’t willful, such as with natural disasters. FERC appears to have taken the more expansive route in the final rule, saying it would apply to any unanticipated, sudden loss of gas or capacity that could threaten life, health or maintenance of property.

Interstate pipelines favored a broader scope for the emergency construction rule, saying any disruption of gas supplies or capacity that threatens life, health or property should be “treated equally” under the Commission rule.

The final rule “sounds like it’s a very positive step” for interstate pipelines, said Joan Dreskin, general counsel for the Interstate Natural Gas Association of America (INGAA). But, she noted, “the devil’s in the details.” FERC had not yet released the final rule to the public by early Friday [RM03-4].

“I hope we never need this, but we sure ought to have it if we do,” said FERC Chairman Pat Wood.

According to FERC staff, the rule expands the scope of construction activities that pipelines can undertake under their Part 157 blanket certificate authority in the event of emergencies, as well as eliminates the prior-notice requirement. It permits interstate pipes, most of which have blanket certificate authority, to take steps to “expeditiously restore service in an emergency” without having to notify FERC 45 days prior to the start of construction, and it removes the cost limitations for construction projects typically allowed under blanket certificate authority.

FERC blanket-certificate rules have restricted pipe construction to primarily laterals and minor system modifications until now, but the new emergency reconstruction rule will permit pipelines to rebuild mainline facilities without getting prior FERC approval.

In emergency situations, pipelines would simply be required to report the extent of the damage to the Commission, and then could proceed to rebuild. The rule, however, still would require pipelines to comply with existing environmental, safety and landowner acquisition rules, the Commission said.

The final rule is intended to address situations where a pipeline mainline has suffered damage, and access to the facilities has been restricted due to an investigation or contamination, FERC staff said. It would permit a pipeline to rebuild around a damaged site to reconnect with its mainline to restore service.

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