An energy company filed a request with a federal regulator, claiming another company’s pipeline carrying natural gas to the Gulf Coast has been intentionally misclassified by its owner.
Energy Transfer (ET), the Dallas-based energy infrastructure company, filed a petition with the Federal Energy Regulatory Commission (FERC) Monday requesting oversight of the Louisiana Energy Gateway (LEG) natural gas pipeline being built by the Williams Companies.
In its filing, Energy Transfer claims it’s clear Williams’ LEG falls under FERC review, and – they say – Williams knows it. According to ET, LEG is a 176-mile long, high-pressure, 42-inch diameter interstate pipeline that “has almost nothing to do with the physical act of drawing gas from the earth” and that Williams’ own project director has described the project as one would an interstate transmission pipeline.
“When something looks like a duck, walks like a duck, quacks like a duck, and is described by its developer as a duck, it is, most likely, a duck. It is surprising when its developer later claims that it is not a duck, but is actually something wholly different,” Energy Transfer said in its filing. “This scenario is playing out in Louisiana and Texas right now with Williams’ Louisiana Energy Gateway, LLC (“LEG”) project. LEG looks like a transmission pipeline, will apparently operate like a transmission pipeline, and its developer talks about it like it’s a transmission pipeline—but despite all that, Williams insists it’s a gathering line.”
The 1.8B cubic foot per day interstate pipeline would deliver gas from the Haynesville shale field to Williams’ massive Transco pipeline and from there to the Gulf and East Coasts. The Haynesville Basin is a shale gas-producing region in northwest Louisiana and eastern Texas and is estimated to contain up to 500 trillion cubic feet of natural gas.
At issue is whether the project is subject to FERC oversight and whether Williams has been accurate in its description of the pipeline’s purpose which it has used to avoid FERC’s regulation.
Since 1938, FERC has had the authority to regulate and approve the siting and construction of transmission pipelines. That includes determining whether the project is in the public interest as well as reviewing the environmental impact of the proposed project and its effects on environmental justice communities.
According to Williams, the LEG project is a “gathering pipeline,” which is typically a smaller-diameter pipeline that delivers gas to larger interstate “transmission pipelines.”
ET disagrees, and on Monday it asked FERC to step in. They note that Williams’ plan for the LEG project has it crossing Energy Transfer’s pipelines, including FERC-jurisdictional pipelines, more than 40 times in Louisiana. According to the filing, Williams has refused to provide customary information needed to assess the environmental, safety, and operational issues with such crossings.
Industry experts tell InsideSources that there is a long-standing seven factor test for determining whether a pipeline is a “gathering” or “transmission” project. Since FERC balances all of the factors, and since no single factor is determinative, it has long been common practice for pipeline developers to request a jurisdictional determination if there is any question about the project.
“Energy Transfer has today asked FERC to step in and order Williams to explain whether its LEG pipeline is a gathering line or an interstate transmission pipeline,” Energy Transfer said in a statement. “Energy Transfer has also asked that FERC, in light of its determination of LEG’s jurisdictional status, clarify its rules so the industry can understand where the line is now between gathering and interstate transmission pipelines and so that future projects can be planned accordingly.”
The Tulsa, Okla.-based Williams Companies handles about one-third of the natural gas used in the United States and has already announced that the LEG has been delayed to 2025 because of disputes over the project.
