On November 1, 2016, FERC rejected arguments raised by numerous intervenors (“Environmental Intervenors”) that FERC had too narrowly defined its jurisdiction over Trans-Pecos Pipeline, LLC’s (“Trans-Pecos”) Presidio Border Crossing Project (the “Project”) and interconnecting intrastate pipeline (the “Trans-Pecos Pipeline”), which resulted in an abbreviated environmental review that failed to comply with the National Environmental Policy Act of 1969 (“NEPA”). In doing so, FERC found that the Trans-Pecos Pipeline will be an intrastate pipeline receiving natural gas produced solely in Texas, and thus environmental review of the construction and operation of the pipeline is not subject to FERC’s Natural Gas Act (“NGA”) Section 7 jurisdiction.

On May 5, 2016, FERC granted Trans-Pecos a Presidential Permit and authorization under NGA Section 3 to site, construct, and operate the Project to export natural gas to Mexico (the “May 2016 Order”). According to FERC, the Project will consist of 1,093 feet of pipeline extending from Texas to the Mexican border in the middle of the Rio Grande River, where it will interconnect with a new stub pipeline of a Mexican affiliate. On the United States side of the border, Trans-Pecos also plans to construct the Trans-Pecos Pipeline, a 148-mile-long pipeline connecting the Project to natural gas supplies in Pecos County, Texas. As the May 2016 Order noted, the Commission issued an environmental assessment for the Project, which concluded that approval of the Project would not constitute a major federal action.

In response, Environmental Intervenors requested rehearing of the May 2016 Order, arguing that FERC should have found that the Trans-Pecos Pipeline was subject to the Commission’s jurisdiction under NGA Section 7. Specifically, Environmental Intervenors argued that because the Trans-Pecos Pipeline terminates near the Waha Hub – a hub in west Texas with interconnecting interstate pipelines – it will transport natural gas that has been commingled with other gas transported by interstate pipelines located near the hub. As a result, Environmental Intervenors contended that FERC truncated its environmental review of the Project by not including the Trans-Pecos Pipeline. In addition, Environmental Intervenors argued that FERC should consider the Trans-Pecos Pipeline jurisdictional because, according to Environmental Intervenors, the pipeline is likely to provide interstate service at or near the in-service date. As an alternative to finding the Trans-Pecos Pipeline jurisdictional under the NGA, Environmental Intervenors argued that FERC should “federalize” the pipeline for the purposes of NEPA and analyze it together with the Project. Finally, Environmental Intervenors argued that FERC failed to consider Comanche Trail Pipeline, LLC’s San Elizario Crossing Project – a border crossing facility approximately 250 miles from the Project – as a connected action in FERC’s environmental review of the Project.

In its order, FERC denied Environmental Intervenors’ request for rehearing. In doing so, FERC first found that the Trans-Pecos Pipeline will initially be a non-jurisdictional intrastate pipeline because it will only transport gas produced in Texas and received from other Texas intrastate pipelines to the border. Further, FERC held that even if the Trans-Pecos Pipeline eventually provided interstate service, it would be pursuant to Natural Gas Policy Act Section 311, and thus not subject to FERC’s environmental review under NGA Section 7. In addition, FERC held that its control and responsibility over the Project were not enough to “federalize” the Trans-Pecos Pipeline for the purpose of NEPA review. Finally, FERC concluded that the Project and the San Elizario Crossing Project are not connected actions because they have substantial independent utility.

A copy of the order is available here.