Opinion ID: 362301
Heading Depth: 2
Heading Rank: 1

Heading: Authority Under the ANGTA

Text: 51 The FERC bases its authority to grant the conditional authorization on section 9 of the ANGTA, 48 and on section 3 of the Natural Gas Act. 49 Analysis must begin with the ANGTA, which reads in pertinent part: 52 To the extent that the taking of any action which is Necessary or related to the construction and initial operation of the approved transportation system requires a certificate, . . . or other authorization to be issued or granted by a Federal officer or agency, such Federal officer or agency shall (1) to the fullest extent permitted by the provisions of law administrated by such officer or agency, . . . issue or grant such certificates . . . and other authorizations at the earliest practicable date. 50 53 The critical statutory language is necessary or related to. To come within the statutory bounds, the FERC must show that importation of Alberta gas is necessary or related to the construction and initial operation of Alaska natural gas transportation facilities running from the United States-Canadian border east and west across the lower 48 states. 51 54 Midwestern and Michigan Wisconsin correctly point out that the Commission did not rely on the necessary or related language in its orders to justify its authority under section 9 of the ANGTA. Therefore, they argue, this Court must not accept the FERC's Post hoc rationalization, for an agency's order must be upheld, if at all, on the same basis articulated in the order by the agency itself. 52 55 Although agency action must be set forth with sufficient clarity so that courts do not have to guess at the underlying theories relied on, 53 this Court has recognized judicial indulgence toward administrative action to the extent of affirming an order when an agency's path, though convoluted, can be discerned. 54 The FERC's failure explicitly to employ the necessary or related phrase did not mask its intent to rely on section 9 of ANGTA as the authority for its decisions. The Commission stated clearly in its June 7 order that it complied with the congressional mandate to expedite under sections 9(a) and (b) of the ANGTA. 55 In the July 24 and August 4 orders, the Commission was equally as explicit about its reliance on the ANGTA, noting that its review of petitions for reconsideration was strictly discretionary because section 10 of the (ANGTA) makes no provision for rehearing. 56 Thus, while the Commission's failure to reveal its mental processes openly and directly gives us pause, we nevertheless find that its arguments are properly based on section 9 of the ANGTA. 56 Midwestern's and Michigan Wisconsin's principal argument is that importation of Canadian gas into the United States is not necessary or related to the ANGTS, because passage of the ANGTA and selection of the Alcan Project was to facilitate transportation of natural gas from Prudhoe Bay, and importation of Canadian gas has no relation to transportation of Alaskan gas. We disagree. 57 The absence of any specific reference to Canadian gas in the ANGTA is understandable because the Act was passed prior to the President's Decision approving the Alcan Project. Any reference to Canadian gas in the Act might have revealed prejudgment in favor of an overland route through Canada and against El Paso Alaska's proposal to ship liquified natural gas from Alaska to California. Nevertheless, Congress appears to have recognized that if a transportation system through Canada were chosen, use of those facilities for Canadian gas imports was a definite possibility. 57 58 Section 5(c)(4) of the ANGTA, for example, requires that the FERC consider the extent to which the system provides a means for the transportation to United States markets of Natural resources or other commodities from sources in addition to the Prudhoe Bay Reserve. 58 The Senate Report accompanying the ANGTS legislation clarifies congressional interest in the relationship between importation of Canadian gas and construction of an ANGTS. The Report indicates that the FERC must consider the scope of the ANGTS transport capabilities, recognizing that substantial additional supplies of natural gas may be available for delivery to the United States from areas on the north slope of Alaska other than the Prudhoe Bay reserve and from other areas of Alaska and Canada. 59 59 In addition to the legislative indices that proposed imports are necessary or related to the ANGTS, Northwest's application to the FERC contains the unchallenged assertion that said contract is, by its terms, expressly tied to the prebuilding of part of the southern portion of the Alaska natural gas transportation system. 60 Northwest also pointed out that substantially all of the transportation facilities to be constructed will be segments of the facilities contemplated in both the President's and NEB's decisions approving the overall Projects. 61 Moreover, the applications state that both the imports and the prebuilding of facilities will greatly reduce the costs of transportation of Alaska gas. 60 First . . . the installation of facilities in both the United States and Canada at an earlier date will result in lower costs because of less inflation and the facilities will begin being depreciated earlier with a consequent reduction in rate base and resulting cost of service when the Alaskan gas comes on stream. Second, the total construction program for the Alaska Highway Pipeline Project (Alcan Project) will be spread out over a greater period of time which will lessen the impact of the project on availability of labor, materials, and capital. 62 61 Finally, the President's Decision and accompanying material show that importation of Canadian gas is related to the ANGTS. While the Decision clearly is not a specific endorsement of Northwest's contract, and does not represent a firm executive commitment in favor of predeliveries of Canadian gas, the President does recognize, and the NEB agrees, 63 that the Alcan system will 62 provide the opportunity to obtain additional gas at an earlier date by early construction of portions of the Southern Canadian and lower 48 sections of Alcan, with delivery of gas from Alberta (where there is a temporary excess supply) in advance of the delivery of Alaska gas. 64 63 The Commission thus was justified in finding that imports like those proposed by Northwest are a material element in the overall desirability 65 of the Alaska natural gas transportation system, and while arguably not necessary to the construction and initial operation of the transportation system, such imports alternatively are related to it.