Summary of the Federal Energy Regulatory Commission’s Notice of Inquiry into the Pipeline Certificate Policy Statement
On April 19, 2018, the Federal Energy Regulatory Commission (“Commission”) issued a Notice of Inquiry (“NOI”)1 in Docket No. PL18-1-000, seeking comment on whether, and, if so how, to revise its policies regarding the certification of natural gas pipeline proposals under Section 7 of the Natural Gas Act.2 It is the Commission’s first general review of such policies since the adoption of the current policy statement on pipeline certification in September 1999 (“1999 Certificate Policy Statement”).3 The 1999 Certificate Policy Statement established criteria for determining whether there is a need for a proposed project and whether the proposed project will serve the public interest. The Commission states in the NOI that its aim with this review is the same as in the 1999 Certificate Policy Statement, “to appropriately consider the enhancement of competitive transportation alternatives, the possibility of overbuilding, the avoidance of unnecessary disruption of the environment, and the unneeded exercise of eminent domain.”4 The wide-ranging topics for consideration and potential for fundamental changes to the certificate application review process make the NOI significant for interstate natural gas pipelines and their customers.
Specifically, the NOI seeks input on four areas: (1) demonstration of project need; (2) eminent domain and landowner interests; (3) evaluation of alternatives and environmental effects under NEPA and the NGA; and (4) the efficiency and effectiveness of the Commission’s certificate process. The NOI seeks stakeholder input and encourages the identification, with specificity, of any perceived issues with the Commission’s current analytical and procedural approaches, as well as the transparency, timing, and predictability of its certification process. The Commission requests detailed recommendations to address these issues. To focus responses, the Commission provides more detailed questions on each area for comment.
Project Need. The NOI seeks comments on what benefits the Commission should consider for determining public need and whether it should more closely review certain provisions of precedent agreements or consider if the counterparty is an affiliate.5 The more detailed questions on project need also inquire whether additional or alternative evidence of need should be required, whether the end use of the gas to be transported should matter, and whether the Commission should consider a regional approach when multiple pipeline applications are pending in the same geographic area.6
Landowner Interests. Similarly, the Commission asks if it adequately takes landowner interests into account, whether applicants should take “additional measures to minimize” eminent domain and if the Commission adequately balances project need and the potential use of eminent domain.7
Environmental Review. The detailed environmental questions include whether the Commission should consider evaluating other alternatives to, calculating upstream and downstream greenhouse gas emissions for, and changing how it balances environmental impacts and benefits of, proposed projects. The Commission also asks if there are environmental impacts not considered that could be addressed in a “broader regional evaluation” and whether it should reconsider how it uses the Social Cost of Carbon tool.8
Efficiency. The Commission’s fourth topic seeks input on ways to make aspects of the certificate application review process (pre-filing, post-filing, and post-order) shorter or more efficient. The Commission asks if certain projects should be subject to a shorter process, if the pre-filing process should be changed and if there are ways for the Commission to work more effectively with other agencies.
The NOI explains that the Commission intends to process currently pending natural gas facility matters in a manner consistent with the 1999 Certificate Policy Statement for the duration of the proceeding. In addition, the Commission will make determinations on the issues raised in currently pending certificate proceedings on a case-by-case basis.
Comments are due within 60 days of issuance of the NOI in the Federal Register. The NOI was issued in Docket No. PL18-1-000, on April 19, 2018, but is yet to be noticed in the Federal Register.
Visit our website to learn more about V&E’s Natural Gas Regulation practice. For more information, please contact Vinson & Elkins lawyers Jay Seegers, Anita Wilson, Andrew Beach, Suzanne Clevenger, Damien Lyster, or Chris Terhune.
1 Certification of New Interstate Natural Gas Facilities Notice of Inquiry, Docket No. PL18-1-000 (issued Apr. 19, 2018) (“NOI”).
2 15 U.S.C. 717f (2012).
3 SeeCertification of New Interstate Natural Gas Pipeline Facilities, 88 FERC ¶ 61,227 (1999), clarified, 90 FERC ¶ 61,128 (2000), further clarified, 92 FERC ¶ 61,094 (2000).
4 NOI at P 3 (quoting the 1999 Certificate Policy Statement at 61,237).
5 NOI at P 54.
7 Id. at P 57.
8 Id. at P 58.
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.