Federal Jurisdiction Over Residue Pipelines: An Overview of FERC Precedent


In February 2019, staff of the Federal Energy Regulatory Commission (FERC, or the Commission) determined that Coronado Midstream LLC (Coronado) requires a certificate of public convenience and necessity, issued by the Commission pursuant to section 7(c) of the Natural Gas Act (NGA), to operate existing residue pipelines connected to the tailgate outlets of its three natural gas processing plants in Texas.

This paper examines past Commission orders upon which Pamela J. Boudreau, Acting Director of the Division of Pipeline Certificates in FERC’s Office of Energy Projects, relied in support of her jurisdictional determinations concerning Coronado’s residue lines. This precedent stretches back to 1983, when FERC first articulated its “primary function” test. In 1994, FERC modified the test in response to the changing nature of natural gas exploration and development. Since then, the Commission has refined the test as it applies to facilities downstream of processing plants. Today, FERC and its staff consider residue pipelines longer than five miles to be jurisdictional transmission lines. This bright line five-mile test for the jurisdictional status of residue pipelines emerged in cases that applied the modified “primary function” test announced in 1994. The mechanical application of the five-mile test has been criticized as arbitrary and capricious, and an unexplained shift away from a more flexible approach to the analysis of jurisdiction.

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