Outer Continental Shelf Pipeline Permitting and Regulating

EMD-79-23: Published: Jan 12, 1979. Publicly Released: Jan 12, 1979.

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A review was made of Outer Continental Shelf (OCS) pipeline permitting and regulatory functions within the Federal Government. Effective implementing regulations need to be developed by the Federal Energy Regulatory Commission (FERC) to ensure that the intent of Congress concerning nondiscriminatory access to all OCS pipelines is carried out.

FERC has not aggressively carried out its responsibilities for enforcing nondiscriminatory access to OCS pipelines. FERC has made no formal attempt to inventory the OCS pipelines which might have been subject to its enforcement responsibility and only has reacted to company complaints or other filings in exercising its enforcement authority. According to the Bureau of Land Management (BLM) and the U.S. Geological Survey (USGS), the two agencies have issued 72 and 42 permits, respectively, to a total of 61 companies for pipelines in the Gulf of Mexico which carry production to shore. FERC officials were unable to identify which of these pipelines were subject to FERC enforcement. These officials also indicated that their information system is independent from that maintained by BLM and USGS. FERC records show only 34 companies with pipelines transporting production to show. Thus, it appears that FERC was unaware of 27 other companies with pipelines which very likely should have been subject to its enforcement authority.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: FERC should develop definitive regulations which exempt from the competitive principles contained in the 1978 OCS Lands Act Amendments only those pipelines or class of pipelines clearly established as gathering or feeder lines, i.e., those lines that feed into a facility where oil and gas are first collected or a facility where oil and gas are first separated, dehydrated, or otherwise processed. The regulations should include stipulations that gathering or feeder lines are restricted to the confines of a single lease or group of contiguous leases under unitized operation or under one operator. In developing such regulations, FERC should consult with BLM and USGS (through the Department of the Interior) because of their past experiences in OCS operations to ensure that guidelines to be followed by all parties in the future are consistent. FERC should also establish procedures for obtaining information from the Department of the Interior on OCS pipeline permitting operations which would ensure that FERC is aware of all pipelines, existing and proposed, that fall under its enforcement authority.

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