U.S. FERC Issues Two Orders Clarifying the Scope of its Natural Gas Act Jurisdiction
On September 22, 2022, the U.S. Federal Energy Regulatory Commission’s (FERC) denied two separate complaints against natural gas pipelines located entirely within one state that turned on whether FERC had jurisdiction over the facilities under the Natural Gas Act (NGA). (more…)
Fifth Circuit Says FERC Can’t Stop Rejection of Filed-Rate Contracts in Bankruptcy
On July 19, 2022, the U.S. Court of Appeals for the Fifth Circuit held that debtors in bankruptcy may reject regulated energy contracts, vacating two Federal Energy Regulatory Commission (FERC) orders to the contrary, in Gulfport Energy Corp. v. FERC. The question turned on how a party’s ability to reject executory contracts in bankruptcy interacts with FERC’s ability to determine whether a party can abrogate or modify contracts that constitute filed rates under a doctrine referred to as Mobile-Sierra. The court found that FERC cannot use its Natural Gas Act authority over contract abrogation and modification to countermand a debtor’s bankruptcy-law rights or the bankruptcy court’s powers.
FERC Jurisdiction Upheld in Puerto Rican Liquified Natural Gas Terminal Proceeding, New Fortress Energy Inc. v. FERC
On June 14, 2022, the U.S. Court of Appeals for the District of Columbia Circuit upheld the Federal Energy Regulatory Commission (FERC) finding of jurisdiction over New Fortress Energy LLC’s (New Fortress) liquified natural gas (LNG) import terminal facility in San Juan, Puerto Rico, in New Fortress Energy Inc. v. FERC. (more…)
U.S. FERC: The Next Battleground for Defining “Responsibly Sourced Natural Gas”
The U.S. Federal Energy Regulatory Commission (FERC) is expected to issue an order later this month that could influence the development of “responsibly sourced natural gas” (RSG), natural gas certified by a qualified third party as meeting certain performance and operational criteria. Some in the energy industry have touted RSG as a way to meet net-zero and lower carbon emissions goals. (more…)
FERC Rolls Back its Recently Enacted Policy Statements on the Certification of New Natural Gas Infrastructure
The Federal Energy Regulatory Commission (FERC) announced on March 24, 2022, that it will delay enacting any changes to its existing policies on the authorization or certification of interstate natural gas pipeline infrastructure under Sections 3 and 7 of the Natural Gas Act. Two policy statements FERC issued on February 18, 2022, in Docket No. PL18-1 and Docket No. PL21-3 (collectively, the 2022 Certificate Policy Statements) have now been deemed “drafts” that are subject to further comment. Initial comments will be due on April 25, 2022, with reply comments due on May 25, 2022. One of the two policy statements, which had been deemed “interim” but given immediate legal effect on February 18 prior to being relabeled a “draft” on March 24, had an initial comment date of April 4, 2022, which has now been extended to the aforementioned dates. Sidley provided a detailed summary of the changes implemented in the 2022 Certificate Policy Statements in a prior client alert and Energy Brief. (more…)
Climate Change Takes Center Stage in FERC’s Updated Policy on the Certification of New Natural Gas Infrastructure
On February 18, 2022, the Federal Energy Regulatory Commission (“FERC”) announced for the first time that it will consider a proposed natural gas infrastructure project’s impact on climate change as part of its public interest determination under sections 3 and 7 of the Natural Gas Act (“NGA”). A proposed project’s environmental effects, including reasonably foreseeable greenhouse gas emissions that may be attributable to the project and the project’s impact on environmental justice communities, now will become part of FERC’s balancing test for whether a project is: (1) required by the public convenience and necessity (“PCN”) under NGA section 7; (2) or in the public interest under NGA section 3. FERC’s prior PCN policy prioritized economic factors to define public need. Environmental effects, while considered under the NGA, were addressed primarily under the National Environmental Policy Act (“NEPA”). (more…)