Responding to two court opinions that said FERC had over-stepped its jurisdiction, the Commission on Wednesday rolled back a four-year-old decision in which it exerted authority under the lighter-handed Outer Continental Shelf Lands Act (OCSLA) to impose uniform reporting requirements on all natural gas pipelines operating on the Outer Continental Shelf (OCS).

FERC’s action was a major victory for producers and interstate natural gas pipelines, which had squared off with the Commission on this issue. The Commission voted out the decision Wednesday, but it did not release the order [RM99-5].

In the April 2000 ruling, the Federal Energy Regulatory Commission flexed its seldom-used authority under the OCSLA to subject all offshore gas pipelines — including those that previously weren’t covered by its jurisdiction –to uniform reporting requirements. It was FERC’s first real stab at trying to bring an end to the conflicting regulatory regimes in the OCS (see Daily GPI, March 30, 2000).

The Commission at the time believed that the changing landscape of the offshore transportation infrastructure — from one dominated by interstate pipelines subject to Natural Gas Act (NGA) regulation to one comprised largely of NGA-exempt facilities owned by producers — required it to exercise both its NGA and OCSLA authority to oversee the offshore.

In October, the U.S. Court of Appeals for the District of Columbia Circuit upheld a lower court decision that enjoined FERC from enforcing the open-ended reporting requirement for gas pipelines operating offshore, finding that the agency had exceeded its authority under the 1953 OCSLA law when it ordered the action in 2000 (see Daily GPI, Oct. 13, 2003).

In affirming the January 2002 ruling of the U.S. District Court for the District of Columbia, the appeals court said the sections of the OCSLA cited by the Commission to justify its action “do not grant FERC general powers to create and enforce open-access rulings on the OCS, but merely assign it a few well-defined tasks.”

The appellate court agreed with The Williams Cos., the Independent Petroleum Association of America and other producers, which challenged FERC’s authority under the OCSLA to force all offshore gas pipelines to satisfy the reporting burden.

The district court, in its ruling, opined that the “clear, unambiguous text of the OCSLA does not provide the FERC with the power to promulgate the regulations at issue in [this] case.” Based on this, it concluded that “FERC cannot adopt these reporting requirements.”

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