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FERC provides the drivers license to build a gas pipeline Alaska Natural Gas Transportation Act subject to interpretation 25 years later, expert tells policy council Kristen Nelson PNA Editor-in-Chief
Oil pipelines come before the Federal Energy Regulatory Commission to get rates set; FERC authority isn’t needed to construct and operate. But gas pipelines are fundamentally different, Bob Loeffler told the Alaska Highway Natural Gas Policy Council in Anchorage March 23.
“To get the basic drivers license to build a pipeline — a gas pipeline — and to operate it under Section 17 of the Natural Gas Act, one must go to the Federal Energy Regulatory Commission and it is that process which gives FERC, of course, a lot of power and also is involved and complicated and takes a lot of time unless it’s expedited,” said Loeffler, a senior partner with Morrison and Foerster in Washington, D.C.
One question that comes up, Loeffler said, is “how many pipelines can FERC take?”
If there are competing proposals, there is a trial-type hearing before an administrative law judge. It was that process, he said, that led to the Alaska Natural Gas Transportation Act of 1976 — Congress got fed up with the FERC process and took the selection of the project out of its hands and put it in the hands of the president.
Son of ANGTS The Alaska Natural Gas Transportation Act remains on the books, Loeffler said. Only one or two parts of it have been repealed, he said, and that old statute is relevant in two ways: how does it apply today? and what sort of a model might it be for new legislation?
The issue we face, he said, is that this is “not the original project, but the son of the project, the son of ANGTS…”
A January review by FERC staff, he noted, questions whether Congress intended ANGTA to benefit a project constructed so long after the project was expected to be built.
Loeffler estimated that a three-year regulatory process will be about what a project faces now. A shorter timeframe, he said, would need a boost from Congress. Questions from council members Asked by Al Adams if a municipally owned pipeline would be exempt from federal regulations, Loeffler said “generally the federal government does not give up jurisdiction lightly” and the Natural Gas Act regulates transmission facilities for natural gas, although, he said there was an exemption provision which historically applies to natural gas facilities within the boundaries of one state.
George Wuerch asked Loeffler if the office of the federal inspector would be used again. Wuerch said the office was a mixed blessing in the 1970s, with some people finding it helpful while others claimed the gas pipeline would never be built if it had to be done under that permitting regime.
Loeffler said that position has been abolished and said he thought “this administrative would be very sensitive to what is effective.”
Lee Gorsuch asked Loeffler if the act provided local access to gas, and Loeffler said, “yes… I know because I wrote it. Section 13B of the Alaska Natural Gas Transportation Act of 1976 gives the state the authority to withdraw its royalty gas … and mandates that FERC will issue all the authorization…”
Jack Roderick asked if a new treaty would be needed, and Loeffler said “there probably will be a need for new federal legislation” and maybe a letter of agreement with the Canadian government.
Charlie Cole asked if Foothills has any enforceable rights in Alaska and Loeffler said “no one knows.”
He said the president’s choice to build the project was the Alaskan Northwest partnership and that right could be transferred. Tracing the family tree of the Northwest certificate, Loeffler said, it is held by two Canadian companies. The FERC staff report discussed whether or not the certificate was viable, Loeffler said. “If the certificate’s viable, then … the Canadians have it.”
Gorsuch asked if the certificate is exclusive so that no one else could build through the corridor, and Loeffler said what while “the FERC staff report suggests the answer is no,” an argument can be made the other way.
“That’s what I mean,” Loeffler said: “no one knows.”
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