On March 12, 2018, the United States Court of Appeals for the Second Circuit affirmed a Federal Energy Regulatory Commission (FERC) order finding that delays by the New York Department of Environmental Conservation (NYDEC) in reviewing Millennium Pipeline Company’s application for water quality certification constituted waiver of NYDEC’s authority under the Clean Water Act (CWA). As we detailed in an earlier blog post, FERC found that NYDEC’s delay exceeded the one-year statutory period established by CWA Section 401. The Millennium case is just one of several interstate natural gas pipeline projects that have faced delays associated with the CWA Section 401 permitting process. (See, e.g., Atlantic Bridge Project, Atlantic Sunrise Project, Constitution Pipeline, Northern Access Project, PennEast Pipeline, and Spire STL Pipeline.) The Court’s decision resolves the nearly three-year permitting process for the Millennium Valley Lateral Pipeline and clarifies for other projects (and state agencies reviewing those projects) that the one-year waiver period begins when the state agency receives the initial request for certification. Continue Reading Second Circuit Affirms Waiver Period for State Water Quality Certification Begins Upon Receipt of Request for Certification
Federal agencies that authorize or permit large infrastructure projects, like interstate natural gas pipelines, are often subject to the requirements of the National Environmental Policy Act (NEPA), and environmental organizations frequently rely on NEPA to challenge a project. The D.C. Circuit recently struck down a decision by the Federal Energy Regulatory Commission (FERC) to approve the construction and operation of three interstate natural gas pipelines because the Court found defects in FERC’s NEPA analysis. The court’s decision to vacate FERC’s authorization now threatens to shut down the pipelines, including the Sabal Trail pipeline currently supplying natural gas to newly constructed power plants in Florida.
On September 15, 2017, the Federal Energy Regulatory Commission (FERC or the Commission) issued an order in which it concluded that delays by the New York Department of Environmental Conservation (NYDEC or the Department) in processing Millennium Pipeline Company’s application for Clean Water Act (CWA) water quality certification constituted a waiver of the certification requirement. The order resolves a lengthy saga regarding water quality certification for Millennium’s Valley Lateral Project. It reaffirms previous FERC precedent establishing that the one-year waiver period for CWA water quality certification decisions by state agencies begins when the state agency receives a written application for certification, regardless of the state agency’s determination that the application is incomplete or requests for further information.
The ongoing leak of methane from Southern California Natural Gas Company’s Aliso Canyon/Porter Ranch underground storage field near Los Angeles has drawn national attention to underground natural gas storage, triggering regulatory and legislative efforts to regulate these facilities at federal and state levels. On the regulatory front, President Obama recently committed to direct PHMSA to promulgate new storage regulations. Just this week, PHMSA announced a new Advisory Bulletin on managing the integrity of underground natural gas storage facilities.
Further Regulation of Underground Natural Gas Storage is under consideration by several state and federal agencies. Gas storage helps moderate supply and demand. As a result, natural gas and related gas products have been stored underground for many years, either in depleted oil or gas field formations, aquifers or salt caverns. Above ground aspects of this storage are regulated by a variety of federal and state agencies, but to date there has not been significant regulation of underground storage facility siting, construction or operation. Several states have been considering new regulations over underground gas storage (e.g., Texas and Kansas), and a recent leak from SoCal’s Aliso Canyon gas storage facility near Los Angeles has drawn national attention to the issue generally.
Effective October 1, 2015, the Federal Energy Regulatory Commission (FERC) will allow interstate natural gas pipelines to seek to recover certain capital expenditures involving changes to pipeline system infrastructure that enhance system reliability, safety and regulatory compliance. In a Policy Statement issued on April 16, 2015, FERC provided guidance on how it will evaluate such cost recovery proposals. The intent is to encourage replacement of old and inefficient pipelines or pipeline components, such as compressors, to enhance the safe operation of pipeline systems.
Continue Reading FERC Implements New Cost Recovery Policy for Gas Facility Modifications
Additional proposed revisions to natural gas reporting forms signal that PHMSA continues to rely on this data to analyze operator performance metrics and inform future rulemakings. By notice issued on November 27, 2013, the Agency responded to comments on revisions to several natural gas reporting forms that it proposed in June (see prior posting) and to extend the comment period an additional thirty days. 78 FR 71033 (Nov. 27, 2013) . Specifically, the Agency responded to comments from the Interstate Natural Gas Association of America (INGAA), the Pipeline Safety Trust (PST), and a manufacturer of distribution pipeline parts. Among minor additional revisions to the natural gas incident, annual, and mechanical failure reporting forms, the Agency reinstated the section of the annual report form that collects the volume of product transported on transmission pipelines (PHMSA Form 7100.2-1, Part C). Second, the Agency further revised sections of the natural gas annual report form that collects information on MAOP determination methods and MAOP verification (PHMSA Form 7100.2-1, Parts R and Q). The Agency declined to remove the phrase “traceable, verifiable, and complete” from the instructions, as requested by INGAA, explaining the phrase is intended to provide guidance for operators to meet the statutory MAOP verification requirement at 49 USC 60139. The Agency also explained that information gathered in these sections will inform future rulemakings, presumably regarding MAOP determination under the grandfather clause and MAOP verification. The comment period on these revisions has been extended to December 27, 2013.
The Energy Information Administration (EIA) and other sources predict that the U.S. will exceed Russia in oil and natural gas production this year, for the first time in decades. See e.g., EIA, http://www.eia.gov/todayinenergy/detail.cfm?id=13251. Over the past 5 years, rapid development of oil and gas shale reserves in the U.S. has decreased oil and gas imports by 15% and 32%. In the past year, the U.S. has become the top producing nation for natural gas, with U.S. production almost equaling U.S. consumption (24.06 BCF/25.60 BCF). EIA, http://www.eia.gov/naturalgas/. At the same time, U.S. oil production is rising, although more slowly. While the U.S. remains the top oil consuming country in the world (18.6 TBD), U.S. oil production ranks third (11.1 TBD). EIA, http://www.eia.gov/petroleum/. Increasing trends toward U.S. energy independence underscore the importance of U.S. oil and gas transportation systems.
To comply with Pipeline Safety Act requirements to confirm the operating pressure limits of certain natural gas transmission pipelines, PHMSA held a public workshop on its proposed ‘Integrity Verification Process’ (IVP) on August 7, 2013. In response to feedback from stakeholders received after the workshop, the Agency announced on September 12, 2013 a revised IVP flowchart. In order to provide the public with adequate time to comment on the revisions, PHMSA extended the comment period for another month to October 7, 2013 (it was to expire on September 9, 2013). The revised approach appears to further streamline the IVP process while maintaining new concepts introduced in the prior flowchart such as legacy pipe, modern pipe, and moderate consequence area (MCA), as an addition to HCA. To date, twenty-seven industry organizations and operators have submitted comments on the proposal and the prior draft IVP flowchart. The docket can be accessed here.
To meet Congressional mandates with regard to confirming the operating pressure limits of certain natural gas transmission pipelines, PHMSA will conduct a workshop on the concept of Integrity Verification Process (IVP) on August 7, 2013. 78 Fed. Reg. 32010 (May 28, 2013). In addition, PHMSA released an initial draft approach for IVP in the form of a complex flow chart. According to the Agency, this concept shares similarities with the “fitness for service” process that Interstate Natural Gas Association of America (INGAA) has been pressing to verify the mechanical integrity of natural gas pipelines. See e.g., INGAA White Paper: Definition and Application of Fitness for Service to Gas Pipelines (May 31, 2012). Notably, PHMSA’s draft IVP approach introduces several new terms and concepts such as legacy pipe, modern pipe, legacy problematic construction techniques, and moderate consequence areas (MCAs), as an addition to HCA classification. More information regarding the August 7, 2013 workshop, including the agenda items will be posted here. Comments may be submitted before or after the workshop.