This week between the holidays is a great time to take a step back from your routine and look at where you have been and where you might be going. This week's Insights does the same by focusing on a sample of the issues that have been at the forefront for our oil and gas pipeline and LNG customers. Some of these issues are a distant memory. Others are just now gearing up. Ad many more, not mentioned below, have yet to materialize.
This review of the issues that we analyzed during 2017 -- many of which we expect to remain of interest in 2018 -- shows that regulatory and legal issues are only increasing. As we experienced in 2017, it is likely that unforeseeable issues, such as the lack of a FERC quorum, will arise in the coming year. So stay tuned to LawIQ. In 2018, we'll continue to grow our regulatory analytics and intelligence platform aimed at providing you insights into the unforeseen, and an advantage over your competition.
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LawIQ - 2018
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LawIQ - 2018
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Our view of the impact is reflected in our last report: i.e., the rule will have repercussions across all fuel sources for power generation, but the FERC will likely seek a more fuel-neutral scenario than that proposed by DOE.
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As covered in prior customer notes, this issue is highly complex, with stakeholder comments ranging from advocating no change, to a full repeal of the current policy. Although there is no required timeframe for FERC to take action, the recent tax policy changes and importance of maintaining positive relations with the D.C. Circuit should spur initiation of action from FERC in the first two quarters of the year.
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LawIQ - 2018
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LawIQ - 2018
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As we reported to customers earlier this week, the FERC order will likely be revisited in response to requests for rehearing filed by Magellan, Plains All American and two others, with a D.C. Circuit appeal almost certain.
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The waiver issue is far from resolved, as FERC will need to decide whether a waiver also occurred in two other projects -- Constitution and National Fuel's Northern Access project -- in NYS with very different factual and legal circumstances. It seems unlikely that FERC will find that NYS waived its right to issue a Section 401 in these cases. Even if FERC were to find a waiver had occurred in either case, an appeal by NYS is a near certainty.
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LawIQ - 2018
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LawIQ - 2018
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At the November open meeting, then Chairman Chatterjee announced that the backlog caused by the lack of a quorum had been cleared. While the proponents of the PennEast and Mountaineer Xpress projects may disagree, the numbers indicate that the current backlog is about the same as existed entering into 2017.
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Projects in West Virginia, Virginia, North Carolina and New Jersey are currently being impacted, including Mountain Valley, Atlantic Coast Pipeline and PennEast projects. With newly elected governors in Virginia and New Jersey, it would not be surprising to see either of those states follow New York's example.
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LawIQ - 2018
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LawIQ - 2018
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As we have explained , absent a decision by TransCanada to abandon this project, we see the resolution of the Nebraska route stretching through most, if not all, of 2018.
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While it is currently unclear how other members of the Commission view the Policy Statement, the review announced by Chairman McIntyre could have far reaching consequences for the pipeline industry, perhaps involving changes to the "need" determination.
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LawIQ - 2018
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LawIQ - 2018
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The immediate impact on other projects was a delay in the issuance of their FERC certificates, as FERC appears to have felt the need to include a revised assessment in the orders it had issued for cases that were pending at the time of the D.C. Circuit decision. The impact on cases now proceeding through environmental review will depend upon how the D.C. Circuit views FERC's response in Sabal Trail, which may proceed to a full panel hearing in the first half of 2018. If it finds that response adequate, the impact on pending cases will be minimal.
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Assuming the pipeline and the Corps adhere to the court's requirement to submit bi-monthly reports on the conditions at Lake Oahe, and barring any new findings, there should be some level of finality for DAPL by this spring.
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LawIQ - 2018
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LawIQ - 2018
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FERC is presented with a tough decision involving complex facts for the largest U.S. refined products pipeline system. A hearing on this complaint would be shocking to other pipeline companies, but given the allegations, a hearing may be the only way to review the working papers necessary to make a decision. A decision on this issue may also breathe life back into a pending rulemaking led by Pioneer and other shippers to make the liquids pipeline reporting structure more transparent.
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As we have reported in our most recent analysis , FERC will be under pressure from shippers to act quickly on this issue because adjusting the tax allowance could result in substantial decreases in the tariff rate charged to customers. The issue, however, is complicated by the various ways this issue has been addressed in rate settlements over the years, and FERC will therefore be encouraged by pipelines to move cautiously. Meanwhile, shippers will push for more immediate action.
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