The Williams Companies v. F.E.R.C.

Decision Date10 October 2003
Docket NumberNo. 02-5082.,No. 02-5086.,No. 02-5081.,No. 02-5056.,No. 02-5077.,No. 02-5085.,No. 02-5078.,02-5056.,02-5077.,02-5078.,02-5081.,02-5082.,02-5085.,02-5086.
Citation345 F.3d 910
PartiesThe Williams Companies and Dynegy Midstream Services, Limited Partnership, Appellees, v. Federal Energy Regulatory Commission, Appellant. Devon Energy Corporation, et al., Appellees. Chevron U.S.A. Inc., et al., Intervenors.
CourtU.S. Court of Appeals — District of Columbia Circuit

Appeals from the United States District Court for the District of Columbia (No 01cv01580) (No. 01cv01624) (No. 01cv01976).

Dennis Lane, Solicitor, Federal Energy Regulatory Commission, argued the cause for appellant. With him on the briefs were Cynthia A. Marlette, General Counsel, and Lona T. Perry, Attorney.

John W. Wilmer, Jr., James M. Costan, and T. Alana Deere were on the briefs for appellees Producer Coalition and Independent Petroleum Association of America.

Henry S. May, Jr. argued the cause for appellees The Williams Companies, et al. With him on the brief were Charles D. Tetrault, Daniel A. Petalas, Howard L. Nelson, Jay V. Allen, James T. McManus, Joseph S. Koury, and Mari M. Ramsey. Jeffrey G. DiSciullo and G. Mark Cook entered appearances.

Katherine B. Edwards, Thomas J. Eastment, Melissa E. Maxwell, Douglas W. Rasch, Charles J. McClees, Jr., and Frederick T. Kolb were on the briefs for appellees Chevron U.S.A. Inc., et al.

Before: GINSBURG, Chief Judge, ROBERTS, Circuit Judge, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge STEPHEN F. WILLIAMS.

STEPHEN F. WILLIAMS, Senior Circuit Judge:

On April 10, 2000 the Federal Energy Regulatory Commission, exercising authority it claimed under the Outer Continental Shelf Lands Act ("OCSLA"), 43 U.S.C. §§ 1331-1356, issued regulations affecting companies providing natural gas transportation service—including "gathering" service—in the Outer Continental Shelf. The regulations required the companies to periodically file information with FERC concerning their pricing and service structures, thereby implementing FERC's view that the resulting transparency would enhance competitive and open access to gas transportation. Order No. 639, FERC Stats. & Regs. (CCH) ¶ 31,097, at 31,514 (April 10, 2000). On petitions for rehearing and clarification, the Commission essentially adhered to its initial decision. Order No. 639-A, FERC Stats. & Regs. (CCH) ¶ 31,103 (July 26, 2000). Several of the subject companies sought judicial relief from the orders, suing in federal district court because FERC's action was under OCSLA rather than the Natural Gas Act. Compare 43 U.S.C. § 1349 (providing jurisdiction in district court for most challenges to orders under OCSLA), with 15 U.S.C. § 717r (providing for circuit court review of FERC decisions under the Natural Gas Act). Gas producers who ship or expect to ship on the covered pipelines intervened.

On January 11, 2002 the district court granted the plaintiffs' motion for summary judgment, denied FERC's motion for dismissal, and denied the intervenors' motion for summary judgment. Chevron U.S.A., Inc. v. FERC, 193 F.Supp.2d 54, 58-59 (D.D.C.2002). It ruled among other things that OCSLA did not give the Commission the authority it claimed to establish a general open access regime on the Outer Continental Shelf. Of course the Natural Gas Act gives the Commission broad authority over pipelines transporting gas in interstate commerce, but § 1(b) of that act, 15 U.S.C. § 717(b), expressly withholds jurisdiction over gathering, see, e.g., Sea Robin Pipeline Co. v. FERC, 127 F.3d 365, 368 (5th Cir.1997), which the Commission's new regulations explicitly covered.

FERC appealed, arguing that the court had interpreted FERC's OCSLA authority too narrowly. We affirm.

* * *

The case turns entirely on the meaning of certain provisions of OCSLA, 43 U.S.C. §§ 1331-1356. Congress initially adopted the statute in 1953 and amended it in 1978. Among other changes, the 1978 amendments amplified the pre-existing open access provisions and accounted for administrative changes arising from the passage in 1977 of the Department of Energy Organization Act, 42 U.S.C. § 7171ff. In the latter category was the transfer of OCSLA responsibilities formerly exercised by the Interstate Commerce Commission to the Federal Energy Regulatory Commission, a new agency replacing the Federal Power Commission and located in the Department of Energy. The OCSLA sections relevant to this appeal are §§ 5(e) & (f), 43 U.S.C. §§ 1334(e) & (f), which we reprint below in full, with the critical text highlighted:

(e) Pipeline rights-of-way; forfeiture of grant

Rights-of-way through the submerged lands of the outer Continental Shelf, whether or not such lands are included in a lease maintained or issued pursuant to this subchapter, may be granted by the Secretary for pipeline purposes for the transportation of oil, natural gas, sulphur, or other minerals, []1 under such regulations and upon such conditions as may be prescribed by the Secretary, or where appropriate the Secretary of Transportation, including (as provided by section 1347(b) of this title) assuring maximum environmental protection by utilization of the best available and safest technologies, including the safest practices for pipeline burial[,]2 and upon the express condition that oil or gas pipelines shall transport or purchase without discrimination, oil or natural gas produced from submerged lands or outer Continental Shelf lands in the vicinity of the pipelines in such proportionate amounts as the Federal Energy Regulatory Commission, in consultation with the Secretary of Energy, may, after a full hearing with due notice thereof to the interested parties, determine to be reasonable, taking into account, among other things, conservation and the prevention of waste. Failure to comply with the provisions of this section or the regulations and conditions prescribed under this section shall be grounds for forfeiture of the grant in an appropriate judicial proceeding instituted by the United States in any United States district court having jurisdiction under the provisions of this subchapter.

(f) Competitive principles governing pipeline operation

(1) Except as provided in paragraph (2), every permit, license, easement, right-of-way, or other grant of authority for the transportation by pipeline on or across the outer Continental Shelf of oil or gas shall require that the pipeline be operated in accordance with the following competitive principles:

(A) The pipeline must provide open and nondiscriminatory access to both owner and nonowner shippers.

(B) Upon the specific request of one or more owner or nonowner shippers able to provide a guaranteed level of throughput, and on the condition that the shipper or shippers requesting such expansion shall be responsible for bearing their proportionate share of the costs and risks related thereto, [FERC] may, upon finding, after a full hearing with due notice thereof to the interested parties, that such expansion is within technological limits and economic feasibility, order a subsequent expansion of throughput capacity of any pipeline for which the permit, license, easement, right-of-way, or other grant of authority is approved or issued after September 18, 1978. This subpara[g]raph shall not apply to any such grant of authority approved or issued for the Gulf of Mexico or the Santa Barbara Channel.

(2) [FERC] may, by order or regulation, exempt from any or all of the requirements of paragraph (1) of this subsection any pipeline or class of pipelines which feeds into a facility where oil and gas are first collected or a facility where oil and gas are first separated, dehydrated, or otherwise processed.

(3) The Secretary of Energy and [FERC] shall consult with and give due consideration to the views of the Attorney General on specific conditions to be included in any permit, license, easement, right-of-way, or grant of authority in order to ensure that pipelines are operated in accordance with the competitive principles set forth in paragraph (1) of this subsection. In preparing any such views, the Attorney General shall consult with the Federal Trade Commission.

(4) Nothing in this subsection shall be deemed to limit, abridge, or modify any authority of the United States under any other provision of law with respect to pipelines on or across the outer Continental Shelf.

OCSLA §§ 5(e) & (f), 43 U.S.C. §§ 1334(e) & (f).

* * *

The statutory language

The crux of § 1334(e) is to require the Secretary (of the Interior) to impose open access conditions in his or her issuance of rights-of-way through submerged lands of the Outer Continental Shelf. To help achieve the open access goal, § 1334(e) grants FERC a single power: to determine, along with the Secretary of Energy, the proportions of oil, gas, or other minerals that each member of any relevant group of pipelines may be required to transport or purchase pursuant to those conditions. The resulting orders appear to be what in ordinary oil and gas industry parlance are called "ratable take" orders. See Howard Williams & Charles J. Meyers, Manual of Oil and Gas Terms 613-14 (1981). In a rhetorical device that it also uses with respect to § 1334(f), FERC likes to paraphrase subsection (e) in a way that completely omits the means selected by Congress to achieve non-discrimination on the Outer Continental Shelf. It argues before us, for example, that both (e) and (f) "require that gas service providers offer nondiscriminatory access on the OCS." Appellant's Initial Br. at 19. Not so. In fact the provision simply requires the Secretary of the Interior to condition grants of rights-of-way on the holder's agreeing to non-discriminatory transportation duties. Without some explicit provision to the contrary (as exists for quantification of the ratable take duty), Congress presumably intended that enforcement would be at the hands...

To continue reading

Request your trial
4 cases
  • Natural Resources Defense Council v. E.P.A.
    • United States
    • U.S. Court of Appeals — District of Columbia Circuit
    • June 8, 2007
    ...Res. Def. Council, Inc. v. Browner, 57 F.3d 1122, 1127 (D.C.Cir.1995)). But "`the bar is high,'" id. (quoting Williams Cos. v. FERC, 345 F.3d 910, 914 (D.C.Cir.2003)), and "only rarely have we relied on legislative history to constrict the otherwise broad application of a statute indicated ......
  • State v. Salazar
    • United States
    • U.S. District Court — District of Columbia
    • March 15, 2016
    ...Continental Shelf. Chevron, U.S.A., Inc. v. F . E . R . C ., 193 F.Supp.2d 54, 57 (D.D.C.2002) (footnote omitted), aff'd sub nom. Williams Cos. v. F . E . R . C ., 345 F.3d 910 (D.C.Cir.2003) ; see also United States v. California, 381 U.S. 139, 85 S.Ct. 1401, 14 L.Ed.2d 296 (1965) (“In a l......
  • Mexichem Fluor, Inc. v. Envtl. Prot. Agency, 15–1328
    • United States
    • U.S. Court of Appeals — District of Columbia Circuit
    • August 8, 2017
    ...can be used to clarify congressional intent even when a statute is superficially unambiguous, the bar is high," Williams Companies v. FERC , 345 F.3d 910, 914 (D.C. Cir. 2003).Here, the legislative history cited by the majority cannot meet the required high bar to show clear Congressional i......
  • Williams Gas Processing — Gulf Coast v. F.E.R.C., 03-1179.
    • United States
    • U.S. Court of Appeals — District of Columbia Circuit
    • July 13, 2004
    ...47 F.3d 1186, 1195 (D.C.Cir.1995); see also id. at 1195 n. 19. So here. WFS, relying on our recent decision in The Williams Companies v. FERC, 345 F.3d 910 (D.C.Cir.2003), contends that FERC's orders exceed its authority under OCSLA. We In The Williams Companies, we held that FERC regulatio......
2 books & journal articles
  • CHAPTER 5 MIDSTREAM OIL & GAS FROM THE UPSTREAM PERSPECTIVE GATHERING YOUR OWN PRODUCTION - CONSIDERATIONS FOR PRODUCER GATHERERS
    • United States
    • FNREL - Special Institute Midstream Oil and Gas from the Upstream Perspective (FNREL)
    • Invalid date
    ...be allowed under the ICA because the ICA imposes a common carrier obligation on oil pipelines. [119] The Williams Companies v. F.E.R.C., 345 F.3d 910 (C.A. D.C. 2003) (holding unlawful FERC Order 639 issuing regulations affecting companies providing natural gas transportation service, inclu......
  • CHAPTER 11 OFFSHORE PIPELINE ISSUES
    • United States
    • FNREL - Special Institute Midstream Oil and Gas from the Upstream Perspective (FNREL)
    • Invalid date
    ...2000) (citing Revision to Oil Pipeline Regulations Pursuant to the Energy Policy Act of 1992, 58 Fed. Reg. 58,753 (Nov. 4, 1993)). [163] 345 F.3d 910 (D.C. Cir. 2003). [164] Id. [165] Id. at 913. [166] Id. at 914. [167] Id. [168] Id. at 916. [169] See Williams Gas Proc.- Gulf Coast Co. v. F......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT