FERC said it will hold a public conference on Sept. 23 to explore whether it should reformulate its test for defining non-jurisdictional gathering in the shallow waters of the Outer Continental Shelf (OCS).

FERC “has considered its offshore gathering policy a number of times in the past decade,” but a “satisfactory definition of gathering under the Natural Gas Act has remained elusive,” according to the agency notice [AD03-130].

The Commission’s primary function test, which identified several physical characteristics for distinguishing whether facilities are FERC-exempt gathering or jurisdictional transportation in nature, was “relatively satisfactory” for onshore gathering, but it has proven “more difficult to apply” in the offshore,” the notice said. In 1996, FERC issued a policy statement modifying the primary function test.

In the policy statement, FERC said it would “presume facilities located in deep water [more than 200 meters] are primarily engaged in gathering or production.” This seems to be “workable” and has engendered “relatively little controversy” with respect to deep-water gathering facilities, the agency said. “Efforts to apply the primary function test to offshore facilities in the shallow OCS, however, have been contentious.”

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