A northern Louisiana energy project that will bring natural gas from the Haynesville Shale region to Gulf Coast markets will not be subject to oversight from federal regulators, a panel decided last month.
The decision by the Federal Energy Regulatory Commission (FERC) on Sept. 27 was a victory for the Williams Companies, whose subsidiary is managing the natural gas pipeline project. A competing energy company, Dallas-based Energy Transfer, had urged FERC to issue an order subjecting the Williams project to the commission’s jurisdiction.
The Williams project’s pipelines will cross rights-of-ways used by Energy Transfer’s existing pipelines. Energy Transfer argued that Williams’ pipeline project was actually a natural gas transmission system – which would be subject to FERC’s jurisdiction – rather than a system of “gather pipelines.” Williams argued it was the latter, since its system is designed to move natural gas from production sites to facilities where it would be further refined.
“The pleadings filed by Energy Transfer and Williams are sufficient for us to conclude that the pipeline facilities at issue would not be subject to the commission’s jurisdiction,” FERC said in its Sept. 27 decision. “We also conclude that the commission’s test regarding gathering facilities requires no further clarification.”
In a statement emailed to the Louisiana Record, a Williams spokesperson expressed satisfaction that its project, called the Louisiana Energy Gateway System (LEG), would be exempt from the federal commission’s jurisdiction.
“With this ruling, Williams continues to prevail against Energy Transfer’s efforts to hinder the development of our project,” the statement said. “Williams is investing significant resources in Louisiana to support growing demand for low-cost, reliable, and clean natural gas and LNG (liquefied natural gas), and we look forward to putting our LEG project into service by the second half of 2025.”
In its decision, FERC concluded that the Williams project was not subject to its oversight under the federal Natural Gas Act. In a technical discussion on how it determines whether a pipeline is classified as “gathering” or “transmission,” the commission found that the diameters of the Williams pipeline are larger than typical gathering pipelines. But the larger pipelines were needed due to the Haynesville Shale’s high-pressure and high-volume characteristics, FERC said..
In addition, the “spine-like configurations” of the pipeline system were consistent with gathering pipelines, commissioners found.
The Van Ness Feldman LLP law firm, which has offices in Baton Rouge and New Orleans, said FERC’s decision gives energy companies greater certainty about federal regulatory reasoning when it comes to developing shale-gas production projects.
“As such, the order may reassure developers of other large, high-pressure systems that gather gas from shale formations that their facilities are non-jurisdictional,” the law firm reported.
Over the summer, the 36th Judicial District Court in Beauregard Parish supported Williams’ position on rights-of-way issues involving Energy Transfer’s existing pipelines. The court said the LEG pipeline crossings in the county would not be an excessive burden for Energy Transfer.
Once completed, the LEG project will generate 1.8 billion cubic feet of natural gas gathering capacity per day from shale formations in both Texas and northern Louisiana, according to Williams. The Haynesville Shale development has led to the creation of nearly 60,000 jobs in Louisiana over the past quarter century, according to economic development reports.