The Minerals Management Service (MMS) will hold its final public meeting Friday in New Orleans on the potential formation of a new offshore gas and oil pipeline regulatory authority that would be structured to ensure non-discriminatory open access to gas and oil gathering and transportation in the Outer Continental Shelf area of the Gulf of Mexico.

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) but also may have granted that authority to the Interior Department.

Pipeline companies fought against having to comply with the data collection process that FERC had imposed on them and probably would rather not have to comply with another regulatory mandate by MMS involving a similar data collection program. But production companies say that providing such data on transportation and gathering service is the only way to ensure nondiscriminatory open access.

“We think that it will be relatively easy for the pipelines companies to provide the data, and there is no way to prevent discrimination from happening if you don’t know what’s going on behind the contracts,” said Nicole Farrar of the law firm McGuire Woods, which is representing several independent producers, including Dominion, Devon, Newfield and others.

“If you have a reporting scheme, first of all, the pipelines are more likely to comply with nondiscriminatory open access policies because they know someone could easily check their [records],” she said. “That’s also the only way that producers would know if there is discrimination.”

Producers, however, are somewhat divided over whether MMS should collect data and oversee the operations of production handling facilities, such as platforms.

The MMS meeting in New Orleans will provide an opportunity for all industry representatives, the general public and other groups to comment on the agency’s potential implementation of the pipeline authority.

In its recent Federal Register notice, MMS said that it 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. 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.

The MMS also is seeking background on instances of discrimination or service denial on pipelines that operate under the NGA and those that do not. 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.” MMS 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 MMS 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.

The final meeting will be held at 9 a.m. on May 14 in the public meeting room at MMS offices (1201 Elmwood Park Blvd.) in New Orleans. Comments are due June 11.

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