New Fortress Energy Inc. v. FERC, No. 21-1122 (D.C. Cir. 2022)Annotate this Case
The Natural Gas Act (“NGA”) vests the Federal Energy Regulatory Commission (“Commission “) with broad authority to regulate the transportation and sale of natural gas. The case at issue concerns the Commission’s application of its pipeline requirement to a liquified natural gas (“LNG “) handling facility in San Juan, Puerto Rico. The facility, constructed and operated by New Fortress Energy LLC (“NFE”) receives LNG from a floating storage unit moored at San Juan Harbor which, in turn, receives LNG from shuttle vessels that deliver LNG imports from ocean-going, bulk-carrier tankers.
While constructing the facility, New Fortress received “informal advice” from Commission staff suggesting the Commission would not assert jurisdiction. Shortly after the facility began operating, the Commission issued an order to show cause why the facility is not subject to Commission jurisdiction as an LNG terminal operating in foreign commerce. In response, NFE argued among other things that the 75-foot pipe is not a “pipeline,” but the Commission disagreed, finding the facility “connected to a pipeline” because the pipe “sends out gas” to San Juan Power Plant.
The DC Circuit denied NFE’s petition seeking review of the Federal Energy Regulatory Commission’s application of its pipeline requirement. The court explained that the physical characteristics of piping are merely a function of the volume of LNG to be imported or exported and the relative distance between the LNG terminal and the ultimate end-user. The Commission also pointed out that it “has never considered” a pipeline’s physical characteristics when determining whether a facility is an LNG import or export terminal.