Opinion ID: 186802
Heading Depth: 2
Heading Rank: 3

Heading: FERC's Inconsistent Precedents and Changing Policy

Text: 30 FERC's new assertion that a facility downstream of a jurisdictional pipeline must also be jurisdictional finds support in two interrelated principles which FERC once embraced but recently rejected: (1) there is one point along every route at which gathering ceases and transportation begins, and (2) a transportation facility cannot feed into a gathering facility. 31 In a 1996 Policy Statement, FERC announced, [W]here gas is destined for interstate commerce, there is necessarily a point at which the gathering or collection of the gas ends, and interstate transportation begins. Gas Pipeline Facilities, 74 F.E.R.C. ¶ 61,222, at 61,757. In Sea Robin I, the Fifth Circuit treated this principle as a settled component of FERC policy: The determinative question is when did gathering cease and transportation commence. 127 F.3d at 371. And indeed, on remand FERC apparently endorsed that notion. Sea Robin II, 87 F.E.R.C. ¶ 61,384, at 62,427 ([T]here is necessarily a point at which the collection or gathering of gas ends, and interstate transmission begins.); see also Dauphin Island Gathering Sys., 93 F.E.R.C. ¶ 61,198, at 61,653 (2000) (same). Yet, in Sea Robin II, Sea Robin II Rehearing Order, and ExxonMobil, FERC issued and defended an order which resulted in a route changing from jurisdictional to non-jurisdictional and back to jurisdictional. FERC thus recently eschewed the first principle and persuaded this court to do so as well. 32 FERC's treatment of the second principle follows a similar course. In 1983, FERC stated, [B]ecause the movement of gas through the Coronado system can be classified as intrastate pipeline `transportation,' we cannot find the subsequent downstream movement of gas from that system to be exempt `gathering.' Galaxy Energies, Inc., 24 F.E.R.C. ¶ 61,121, at 61,304 (1983). More recently, FERC declared, [A] facility functionalized as gathering may not be located downstream of facilities functionalized as transmission. Trunkline Gas Co., 70 F.E.R.C. ¶ 61,163, at 61,503 (1995); see also Dauphin Island, 93 F.E.R.C. ¶ 61,198, at 61,652 ([I]t would be incongruous for gas flowing on an upstream transportation line to be delivered into a downstream gathering line.). But in 2002, FERC convinced this court to distinguish Trunkline as a case in which the classification of the upstream system was in dispute, and reject the proposition that the presence of an interconnection with an upstream jurisdictional facility compels a finding that the downstream facility is likewise jurisdictional. ExxonMobil, 297 F.3d at 1087. 33 In Jupiter Appeal, the Fifth Circuit assumed that the first principle constituted FERC's own tenet, and that the second principle necessarily flows from the first. 407 F.3d at 350-51. Indeed, the pull of the principles provides a logical explanation for FERC's 2005 orders. If there can only be one point along any given route at which the function of facilities changes, then the situation FERC created — where a transportation pipeline fed into a gathering pipeline which, in turn, fed into a transportation pipeline — was in fact anomalous and required reconsideration. Likewise, if a gathering facility cannot sit downstream of a transportation facility, FERC was required — as a matter of reason — to change either the classification of the Jupiter pipeline or the Transco lateral. Moreover, if the two principles demand corrective action where a transportation facility sits upstream of a gathering facility, FERC's apparent new statement of policy can be seen to proffer a third principle guiding resolution: [t]he presence of upstream transmission facilities determines the classification of downstream facilities, not the opposite. 2005 Transco Jurisdictional Order, 111 F.E.R.C. ¶ 61,090, at 61,411. 34 It would thus appear that FERC's incomplete information rationale rests on its tacit adoption of these two principles and application of a new policy derived from them. Only if FERC views the principles as inviolate, does FERC's incomplete information rationale begin to make sense. 35