The Federal Energy Regulatory Commission needs to adjust its approach to rehearing requests that challenge approval orders for natural gas infrastructure projects after an appeals court judge described an "administrative limbo" for landowners and other opponents, Commissioner Richard Glick said.
Glick said in an email that he believed that it was "incumbent on FERC to act in rehearing requests sooner — perhaps within the 30 days required" under the Natural Gas Act.
The legal and timing issues around rehearing requests can have implications for the schedules of gas infrastructure projects and for the challenges to those projects filed by landowners, environmental groups and others. Under current FERC practice, the commission can issue a tolling order that indefinitely extends the 30-day period it has to consider whether to grant a rehearing of one of its decisions. Tolling orders can allow construction of pipeline projects to proceed before legal challenges to FERC's project approvals can be heard in federal appeals courts, because the courts do not consider the FERC approval final until the commission has concluded its work on rehearing requests.
Glick offered two other possibilities for improving the process of rehearing requests and tolling orders. "I think we need to take more seriously requests for a stay of our certificate orders pending the commission's review of rehearing requests."
Glick also said Congress should consider amending the Natural Gas Act to limit the right of eminent domain until the appellate process is complete. The power of eminent domain, which comes with a Natural Gas Act certificate order approving gas infrastructure projects, allows developers to take possession of portions of private property if no agreement can be reached with the landowners.
FERC Commissioner Bernard McNamee said the commission should be careful around the power of eminent domain. "[T]he power to seize a person's property for public use is an extraordinary power, and we must always be mindful of the commission's role in the process," he said by email.
FERC Chairman Neil Chatterjee declined to comment, as did Commissioner Cheryl LaFleur.
Glick's comments followed a court opinion in which Judge Patricia Millett, a member of the U.S. Appeals Court for the District of Columbia Circuit, agreed with pipeline opponents that there is a problem with the FERC process around rehearing requests. The judge's concurring opinion accompanied an Aug. 2 decision that upheld FERC's orders approving Williams Cos. Inc. subsidiary Transcontinental Gas Pipe Line Co. LLC's 196.5-mile, 1.7-Bcf/d Atlantic Sunrise gas pipeline project and denied objections from environmental groups.
Millett slammed the commission's practice of putting off decisions on rehearing orders for months, finding that it puts private property owners in "administrative limbo." The judge wrote that a scheme that walls off homeowners from timely judicial review of FERC's public use determination for pipelines while allowing eminent domain and "functionally irreversible" construction to go forward "runs roughshod over basic principles of fair process."
The judge observed that until FERC decides on rehearing, the commission's certificate orders are considered nonfinal for purposes of judicial review, jurisdictionally locking homeowners out of court. But the certificate order is "final enough" for pipeline companies to prevail in separate eminent domain actions that let them acquire easements from the property owners, she wrote.
Millett offered several possible remedies: require FERC to act in a timely manner on rehearing, require FERC to withhold construction orders until it decides on the merits of rehearing, or recommend that FERC take no action on a rehearing request if the commission finds that it is too much work to decide in time, which would allow rehearing requests to be denied automatically as a matter of law.
Maya Weber is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.