Major gas producers have called for FERC to stay theeffectiveness of its controversial remand decision on Sea RobinPipeline pending rehearing, citing the “enormous impact” that itcould have on offshore production and transportation activities ifit’s implemented prior to being reviewed by the Commission.

A complete stay of the June 30th decision, which found the SeaRobin offshore system to be part gathering and part transportation,is needed to forestall a potential “avalanche” of requests by OuterContinental Shelf (OCS) pipelines to be reclassified asnonjurisdictional, as well as to assure that offshore producers andshippers aren’t “diverted” from finding, developing, producing andmarketing OCS production while the Sea Robin order is undergoing areview, the producer-oriented group, Indicated Parties, told FERC[CP95-168-003].

As shippers on OCS pipelines, producers loathe the Sea Robindecision because it puts a large part of the offshore pipeline’ssystem out of the reach of FERC jurisdiction. They believe thatwithout FERC oversight they will be at the mercy of the potentiallydiscriminatory activities of offshore pipes. They especially areconcerned that the Sea Robin ruling, if upheld by the Commissionand the courts, could lead to total deregulation of the OCS.

If a stay of the June 30 decision isn’t possible, IndicatedParties have asked for an expansion of the scope of an Aug. 6letter order, which gave Sea Robin permission to stay the filing ofgathering rates for its system pending Commission action onrehearing. Specifically, the producers want the stay in the letterorder to be magnified to apply to “all [the] findings andconclusions” reached in the landmark Sea Robin decision. The letterorder was issued by Kevin Madden, FERC’s director of the Office ofPipeline Regulation (OPR).

But Exxon Co. U.S.A., which filed independently of IndicatedParties, said it opposed even the limited stay given to Sea Robinin the letter order, and asked Madden to reconsider his ruling.”Until the order on remand is corrected… either theCommission or a reviewing court, Sea Robin’s system is as Sea Robinrequested – part transmission, part gathering,” and it should bedirected immediately to file a full Section 4 rate caseestablishing proposed rates for both gathering and transportation,the producer noted.

However, Indicated Parties believe a full stay of Sea Robin isneeded now. They “are gravely concerned that absent a stay of theJune 30 order many…..jurisdictional pipelines [other than SeaRobin] will interpret this order as countenancing a widespread andsweeping contraction or withdrawal of the Commission’s jurisdictionover pipeline rates and terms and conditions of service.” Even SeaRobin, in seeking the limited stay, recognizes the potential for”regulatory chaos” in the offshore, Indicated Parties said.

“As Sea Robin itself has acknowledged, it makes little sense torequire parties to implement significant changes to their tariffand jurisdictional activities until the jurisdictional issues inthis case are finally determined,” the producer group said.

“Billions of dollars are at stake in this proceeding, not tomention the potential harm to the efficient development andproduction of deep-water oil and gas reserves,” Indicated Partiesreminded FERC in their bid for the stay.

Susan Parker

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