Summary
The D.C. Circuit reviews a petition for review challenging a Federal Energy Regulatory Commission (FERC) order authorizing the abandonment of a natural gas pipeline operated by Stingray Pipeline Company LLC. FERC conditioned the abandonment on either restoring a damaged pipeline segment to service or reaching an agreement with the affected firm shipper. The court denies the petition, holding that FERC's condition was supported by substantial evidence and consistent with the Natural Gas Act's public convenience and necessity standard, as Stingray failed to meet its burden to show unconditional abandonment was in the public interest.
Topics
Practice areas
Questions Presented
- Whether FERC's condition requiring Stingray either to restore Segment 3394 before abandonment or obtain ERT's agreement to the segment's remaining out of service was arbitrary and capricious or unsupported by substantial evidence.
- Whether FERC exceeded its statutory authority by imposing the condition on Stingray's abandonment approval.
- Whether FERC's condition improperly regulated a nonjurisdictional purchaser or was inconsistent with FERC precedent.
Holdings
- FERC reasonably conditioned abandonment on restoration of Segment 3394 or ERT's agreement that the segment remain out of service because Stingray failed to establish that unconditional abandonment was consistent with the public convenience and necessity.
- FERC acted within its statutory authority when it conditioned approval of Stingray's abandonment proposal on restoration of Segment 3394 or ERT's consent to its remaining out of service.
Key quotations
“The answer is no.” (p. 8)
“The proper inquiry is whether Stingray has established that unconditional abandonment is consistent with the public convenience or necessity. It has not.” (p. 12)
“The Commission’s conditional abandonment order did not exceed its authority.” (p. 19)
Factual background
Stingray operated a 287-mile interstate natural-gas pipeline system subject to FERC jurisdiction and experienced declining throughput and revenues in the West Cameron Block 509 system. Hurricane Delta damaged Segment 3394 in October 2020, interrupting service to upstream producers, including firm shipper ERT; the segment remained out of service for approximately four years. Stingray sought abandonment by sale to nonjurisdictional entity Triton, represented that it intended to restore Segment 3394, but later failed to provide an in-service date or evidence establishing that unconditional abandonment would not harm ERT or the public.
Procedural history
Stingray applied to FERC for permission to abandon by sale the West Cameron Block 509 pipeline system to a nonjurisdictional entity. After Hurricane Delta damaged Segment 3394 and the segment remained out of service, FERC approved abandonment subject to a condition that Stingray restore the segment before abandonment or obtain the affected shipper's agreement to its remaining out of service. FERC denied rehearing, and Stingray petitioned the D.C. Circuit for review.