A decision on the remanded Sea Robin Pipeline case anddiscussion of policy changes in the way the Federal EnergyRegulatory Commission regulates offshore pipelines both are on theagenda for Wednesday’s open meeting, but no one will be surprisedif they’re a no-show once again.
The two items whose fate appears to be intertwined have made itas far as the Commission staff’s pre-agenda meeting once before,only to be relegated again to a dark closet in the face ofirreconcilable differences among commissioners. The differencesrevolve around the distinction between a jurisdictional pipelineand a non-jurisdictional gathering system and FERC’s regulation ornot of offshore lines in the brave new world of non-merchantpipelines.
It has been almost two years since the Fifth Circuit Court ofAppeals remanded the Sea Robin case (96-60536), telling FERC to useits own physical facilities guidelines to determine the Gulf ofMexico line’s jurisdictional status, rather than relying on thefact that it is pipeline-owned and had previously beencertificated. The Court also suggested the Commission might want tolook at reformulating its criteria. In February, 1998 the courtturned down FERC’s rehearing request (See NGI, Feb. 16, 1998).
In response to the court FERC issued a Notice of Inquiry(RM98-8) a year ago asking the industry for suggestions for a”simple” and “common sense” approach to offshore regulation.Responses varied from producers’ demands for a strict test andregulation under the Natural Gas Act (NGA) to pipelines’ pleas forless regulation under the Outer Continental Shelf Lands Act. (SeeNGI, June 1, July 20, 1998)
Sources say commissioners are split, and while a continuation ofNGA jurisdiction with a revised test most likely would win the day,it would be a 3-2 vote, which would make it less defensible incourt and likely to be revisited.
As for Sea Robin, the most likely outcome if the Commission’scurrent “Farmland primary function test” which assesses diameter,length, location and design is applied, would be for it to bedeclared part fish and part fowl, with its central system aregulated transport pipeline and the outlying areas, unregulatedgathering. This would be similar to a decision in a case involvingShell Gas Pipeline (CP96-159) two years ago, and it would give anoffshore line owned by a pipeline the same treatment as an offshoreproducer-owned pipeline.
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