Document ID: FERC-2020-0747-0001
Agency: ferc
Document Type: Rule
Title: Commission Action to Address Effects of COVID-19 on Oil Pipelines
Posted Date: 2020-06-16T04:00Z

[Federal Register Volume 85, Number 116 (Tuesday, June 16, 2020)]
[Rules and Regulations]
[Pages 36321-36323]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-12945]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Chapter I

[Docket No. PL20-6-000]

Commission Action To Address Effects of COVID-19 on Oil Pipelines

AGENCY: Federal Energy Regulatory Commission.

ACTION: Policy statement.

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SUMMARY: In this policy statement, the Federal Energy Regulatory 
Commission provides guidance regarding the Commission's response to the 
effects of the national emergency caused by COVID-19 on oil pipelines.

DATES: June 16, 2020.

FOR FURTHER INFORMATION CONTACT: Glenna Riley (Legal Information), 
Office of the General Counsel, 888 First Street NE, Washington, DC 
20426, (202) 502-8620, Glenna.Riley@ferc.gov. Matthew Petersen 
(Technical Information), Office of Energy Markets Regulation, Federal 
Energy Regulatory Commission, 888 First Street NE, Washington, DC 
20426, (202) 502-6845, Matthew.Petersen@ferc.gov.

[[Page 36322]]

SUPPLEMENTARY INFORMATION: 
    1. On March 13, 2020, the President issued a proclamation declaring 
a National Emergency concerning COVID-19. Measures to mitigate or slow 
the transmission of COVID-19 have substantially reduced travel and 
commercial activity, and U.S. consumption of petroleum products has 
dropped sharply as a result. Consequently, oil pipelines are facing 
unanticipated circumstances, including diminished demand for service 
and radically altered market conditions. In light of these 
circumstances, we offer the following guidance to oil pipelines.
    2. We are committed to assisting oil pipelines in addressing the 
unprecedented impacts of COVID-19, particularly where such pipelines 
are encountering regulatory hurdles that may impede or delay attempts 
to respond to changing market dynamics during this difficult time. For 
example, an oil pipeline may be unable to comply with regulatory 
requirements or may require an extension due to steps it has taken to 
meet the emergency conditions, such as measures taken to protect the 
health and safety of its employees. We further recognize that due to 
the circumstances arising from COVID-19, an oil pipeline might seek to 
temporarily alter routes, reconfigure existing systems, or change flow 
direction to provide shippers access to storage. In addition, an oil 
pipeline that has not previously provided service subject to the 
Commission's jurisdiction might seek to temporarily provide service in 
interstate commerce, as opposed to intrastate commerce, to respond to 
current market demands, but may have difficulty meeting the 
Commission's regulatory requirements to begin providing interstate 
service for the first time. In these and other instances, oil pipelines 
may request temporary waivers of or extensions of time to comply with 
the following regulations where necessary and appropriate to address 
the unforeseen circumstances resulting from COVID-19:
     Cost-of-service filing requirements (18 CFR 342.2(a); part 
346);
     Reporting requirements (part 357);
     Record-keeping requirements (part 356);
     Accounting regulations (part 352); and
     Depreciation studies (18 CFR 347.1).
    We will review and act on such requests as expeditiously as 
possible based upon the circumstances and justification described in 
the pipeline's waiver or extension request.\1\
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    \1\ See also Extension of Non-Statutory Deadlines, Supplemental 
Notice Granting Extension of Time for Non-Statutory Deadlines, 
Waiving Regulations, and Shortening Answer Period, Docket No. AD20-
11-000 (Apr. 2, 2020) (``Entities may seek waiver of Commission 
orders, regulations, tariffs, rate schedules, and service 
agreements, as appropriate, to address needs resulting from steps 
they take in response to the emergency conditions caused by COVID-
19. Action on all such motions will be taken as expeditiously as 
possible.'').
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    3. Moreover, to facilitate changes to operations and services on an 
expedited basis, oil pipelines may request a waiver for tariffs to 
become effective on less than 30 days' notice pursuant to Sec.  341.14 
of the Commission's regulations.\2\ Such requests for waiver of prior 
notice made concurrently with tariff filings will be deemed 
conditionally granted subject to refund, and will also be deemed 
automatically granted at the conclusion of the 30-day notice period 
unless the Commission issues an order denying the request.\3\
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    \2\ 18 CFR 341.14.
    \3\ Id.
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    4. We also recognize that oil pipelines' existing tariff rates and 
rules may be inadequate to address the drastic and unforeseen impacts 
of COVID-19. Oil pipelines are allowed to file changes to their rates 
and rules and regulations tariffs at any time. Under the Commission's 
regulations, pipelines with indexed rates can change their rates at any 
time so long as they remain at or below the ceiling level.\4\ A 
pipeline may change a rate without regard to the ceiling level if the 
change is agreed to by each shipper using the service.\5\ If a 
pipeline's costs substantially diverge from its indexed rates, it can 
file a cost-of-service rate change.\6\ In addition, pipelines with 
market-based rate authority have the flexibility to respond to changes 
in market conditions by filing a tariff to change their rates at any 
time without regard to the indexed ceiling level.\7\ Any pipeline that 
does not currently have market-based rate authority and serves 
sufficiently competitive markets may file an application at any time 
under Part 348 of the Commission's regulation to establish that it 
lacks significant market power.\8\
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    \4\ 18 CFR 342.3(a).
    \5\ 18 CFR 342.4(c).
    \6\ 18 CFR 342.4(a).
    \7\ 18 CFR 342.4(b).
    \8\ 18 CFR pt. 348.
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    5. We understand that there could be instances where the above 
regulations for establishing and changing rates might not provide an 
appropriate means to address the current emergency circumstances, which 
may be drastic but only temporary.\9\ If oil pipelines submit other 
proposals for temporary rate relief to address the emergency 
circumstances caused by COVID-19, we will give such proposals their due 
consideration on a case-by-case basis. Although any such proposals must 
be fully supported and consistent with the Interstate Commerce Act,\10\ 
we recognize that these unprecedented circumstances might require 
unusual solutions. We will assess the appropriateness of any temporary 
rate relief proposals based on the facts and circumstances presented, 
including any issues raised in comments or protests from affected 
shippers.\11\
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    \9\ To the extent there are lasting changes that impact a 
pipeline's ability to recover its costs, such issues are 
appropriately addressed via the rate changing methodologies in Part 
342 of the Commission's regulations.
    \10\ 49 U.S.C. app. 1 et seq. (1988).
    \11\ This policy statement is merely guidance, and we emphasize 
that nothing in this policy statement is intended to establish a 
binding rule or determination, or to alter shippers' rights to file 
complaints or protests in individual cases. 18 CFR 343.2, 343.3.
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    6. We acknowledge that in certain situations, oil pipelines may 
need to temporarily curtail jurisdictional transportation service due 
to the circumstances caused by COVID-19. In such instances, affected 
oil pipelines may file notices of temporary embargo.\12\
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    \12\ Notices of embargo may be submitted through the eTariff 
portal using Type of Filing Code 840.
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    7. We recognize there may be oil pipelines facing disputes with 
shippers as a result of the unprecedented circumstances caused by 
COVID-19 and that they may want to explore the potential for a 
negotiated or mediated resolution. We encourage oil pipelines in that 
situation to consider using the Commission's alternative dispute 
resolution process.\13\ We appreciate oil pipelines' efforts to pursue 
agreements with shippers to resolve issues where possible.
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    \13\ The contact information for the alternative dispute 
resolution helpline is as follows: Toll-free: 1-844-238-1560, FAX: 
202-219-3289, Email: ferc.adr@ferc.gov.
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    8. We encourage oil pipelines to contact the Commission with any 
concerns or issues related to the impacts of COVID-19. Oil pipelines 
may notify the Commission of any regulatory or compliance issues they 
are encountering in attempting to respond to the changed circumstances. 
We note that oil pipelines may use the Commission's pre-filing review 
process to informally submit tariffs or related material to Commission 
staff for suggestions.\14\ We are sensitive to oil pipelines' needs for

[[Page 36323]]

feedback on an expedited basis given the emergency conditions.
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    \14\ 18 CFR 341.12.
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    9. We commend the industry's efforts to adapt to these 
unprecedented circumstances while continuing to uphold their common 
carrier duties under the Interstate Commerce Act.

Document Availability

    10. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
internet through the Commission's Home Page (http://www.ferc.gov). At 
this time, the Commission has suspended access to the Commission's 
Public Reference Room, due to the proclamation declaring a National 
Emergency concerning COVID-19, issued by the President on March 13, 
2020.
    11. From the Commission's Home Page on the internet, this 
information is available on eLibrary. The full text of this document is 
available on eLibrary in PDF and Microsoft Word format for viewing, 
printing, and/or downloading. To access this document in eLibrary, type 
the docket number excluding the last three digits of this document in 
the docket number field.
    12. User assistance is available for eLibrary and the Commission's 
website during normal business hours from the Commission's Online 
Support at (202) 502-6652 (toll free at 1-866-208-3676), via email at 
ferconlinesupport@ferc.gov, or from the Public Reference Room at (202) 
502-8371, TTY (202) 502-8659. Email the Public Reference Room at 
public.referenceroom@ferc.gov.

    By the Commission.

    Issued: May 8, 2020.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2020-12945 Filed 6-15-20; 8:45 am]
BILLING CODE 6717-01-P