Two energy companies involved in building natural gas infrastructure in the Louisiana-Texas region are locked in a dispute over whether the Williams Companies Inc. is “playing by the rules” in planning its extensive pipeline network.
Williams’ Louisiana Energy Gateway LLC, or LEG, is currently being planned in Texas and the Haynesville basin in northern Louisiana – a major shale gas-producing region. Williams’ natural gas pipeline system would cross Dallas-based Energy Transfer’s existing pipeline in scores of locations. The situation has prompted state litigation over whether Energy Transfer has engaged in anti-competitive actions by raising safety and regulatory concerns about whether these pipeline crossings should be allowed.
In April, Energy Transfer filed a petition with the Federal Energy Regulatory Commission (FERC) that urges the agency to determine whether the National Gas Act and FERC’s jurisdictional tests require Williams to get FERC’s approval before proceeding with LEG.
In an email to the Louisiana Record, a Williams spokesperson called the Energy Transfer proposal a mistake and time waster.
“Energy Transfer’s request is another misguided and wasteful attempt to delay LEG’s construction and to stifle competition in Louisiana,” the Williams spokesperson said. “Having prevailed in certain right-of-way litigation in Louisiana state courts and with federal permit authorizations in hand, Williams will commence pre-construction activities along its right-of-way in the coming weeks, and then proceed with construction.”
Tulsa-based Williams has also filed a Motion to Intervene and Protest with FERC, calling on the agency to dismiss Energy Transfer’s petition because LEG is a “gathering system” as opposed to a “transmission pipeline” carrying gas to major markets. That places Williams’ project outside of FERC’s jurisdiction, Williams argues.
But Energy Transfer disagrees, putting the company in the unusual position of supporting the federal government’s “difficult” regulatory and oversight rules, as is mentioned in the company’s April 8 petition to FERC.
“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,” the petition states. “It is surprising when its developer later claims that it is not a duck, but is actually something wholly different.”
Energy Transfer alleges that the Williams project contains many of the same features as transmission pipelines, as opposed to gathering pipelines, which typically consist of multiple lines in one area that “gather” or send the fuel to a central point.
“(Transmission pipelines) are long and have fairly wide diameters, operate at high pressures to transport processed gas to downstream markets, and they are regulated by the commission,” the petition says. “LEG shares every one of these qualities, except for the last – it is not being regulated by the commission.”
Energy Transfer also asks FERC to make clear whether the Williams project’s placement of a carbon dioxide-removal plant at the foot of the pipeline essentially makes it exempt from FERC oversight.
“We have never taken the position that others cannot cross our pipelines ever, as pipeline crossings occur across the country, including some of ours,” Energy Transfer said in a statement released earlier this year. “What makes this situation unique is the parties at issue proposed between 140 and 160 crossings across multiple lines, but would not, in most cases, provide the information necessary for us to confirm that the safety of our pipelines would not be compromised by their crossings, or that our property rights would not be infringed upon.”
In a recent opinion article, retired Col. Rob Maness, a former energy company executive, called the Williams request to cross pipelines at so many locations unprecedented, saying it could lead to Louisiana property rights being eroded by companies seeking to circumvent proper regulatory oversight.
The Louisiana Oil and Gas Association has expressed concerns about Energy Transfer’s position, saying that holding up pipeline-crossing approvals would be a disservice to Louisiana’s economic growth and resource development.