Taking over where FERC left off, the Minerals Management Service (MMS) is testing the waters for possibly putting a new regulatory framework in place to ensure non-discriminatory open access to offshore gas and oil pipeline systems.
The agency published an advance notice of proposed rulemaking (NOPR) in the Federal Register Monday requesting public comment and announcing a series of public meetings to gain public input on MMS taking on a new regulatory role over offshore pipelines.
On Oct. 10, 2003 in Williams Cos. v. FERC, the U.S. Court of Appeals for the District of Columbia Circuit affirmed a decision that found that certain provisions in the Outer Continental Shelf (OCS) Lands Act restricted the Federal Energy Regulatory Commission’s (FERC) authority over offshore pipelines (see Daily GPI, Oct. 13, 2003).
According to the circuit court’s decision, FERC’s authority does not include the regulatory oversight described in FERC Orders 639 and 639A, which were going to force all offshore pipelines to comply with the extensive reporting requirements. A number of pipeline and producers at the time questioned whether FERC had the authority under the OCSLA to prescribe such widespread reporting requirements for all OCS pipelines. The court determined that the FERC regulations issued in the Williams case were not valid.
However, it also stated that OCSLA section 5(f) “simply requires the Secretary of the Interior to condition grants of rights-of-way on the holder’s agreeing to non-discriminatory transportation duties.”
MMS, a Interior Department agency, now wants to know the extent of its authority and the amount of data reporting that it should require to fulfill that role.
While many offshore pipeline companies still may be subject to the FERC’s jurisdiction, some may now fall under the auspices of the MMS. If the FERC declares that a company’s facilities perform a “gathering” function rather than a “transportation” function, then the facilities are exempt from the FERC’s jurisdiction under the Natural Gas Act. As such, the FERC will not impose its ratemaking authorities on that pipeline. Ensuring open and nondiscriminatory access to gathering pipelines may then be MMS’ job.
In the Federal Register notice, the MMS said it is exploring this authority and is seeking extensive public input on the scope of its responsibilities as well as background on instances of discrimination or service denial both on pipelines that operate under the NGA and those that do not. MMS said it wants to know the “circumstances under which a service provider would deny service to a shipper.” It also wants details from “any party that feels they have been denied open and non-discriminatory access to pipelines on the OCS, as well as suggestions for actions that could have been taken to prevent this from happening.”
“We are also interested in whether the lack of NGA-regulatory oversight has had or may have potential positive or negative impacts,” the agency said in its notice.
It said a record of access issues that arise between shippers and service providers would help it “gain a better perspective on the need for a regulatory framework to ensure open and non-discriminatory pipeline access.”
The agency is considering opening a hotline for complaints of perceived instances of open and non-discriminatory access violations. It also wants input concerning the advantages and disadvantages of resolving complaints through an informal negotiation or a more rigorous dispute resolution process.
Regarding all these matters, MMS said it also needs to know what factual information or data would be necessary to make a determination that open access has been denied or that discrimination has occurred, what mechanisms it could use to gather such information, and the extent to which the information should be made public. MMS said it is interested in comments regarding whether this mandate can be accomplished in the absence of information collection and the dissemination of some or all of the information.
It will hold public meetings in Houston at 9 a.m. on April 27 at the Hotel Intercontinental in Washington, DC, at the DOE Yates Auditorium at 9 a.m. on May 11 and at MMS offices in New Orleans on May 14 at 9 a.m. More information is available in the Federal Register notice and at https://www.mms.gov.
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