Responding to two court opinions that said FERC had over-stepped its jurisdiction, the Commission last 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 last week, but it has not released the order yet [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 on the OCS (see NGI, April 3, 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 increasingly of NGA-exempt facilities owned by producers — required it to exercise both its NGA and OCSLA authorities to oversee the offshore.

FERC’s decision last week would only relieve those offshore pipelines that were ordered to report to the agency under the OCSLA. It will not affect the reporting responsibility of NGA jurisdictional pipelines operating on the OCS, an agency spokeswoman said.

Last 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 NGI, 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.”

Under the April 2000 rule, FERC directed all OCS pipelines to file information with the agency on their ownership, corporate affiliations, a description of the pipeline facilities (location, length, size et al) and a map of the facilities. Offshore pipes also were required to submit compliance filings each quarter, spelling out their conditions of service along with either all of their current contracts or a statement of their operating conditions, rates and how the rates were derived.

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