Underground Infrastructure - March 2023 - 13

liquids pipeline transportation company
in particular circumstances. If
adopted, it would create a rebuttable
presumption that affiliate contracts are
unduly discriminatory and not just and
reasonable
in
certain
circumstances
and require a pipeline to produce additional
evidentiary support for affiliate
contract rates and terms.
This follows a trend of increased
scrutiny by FERC on affiliated contracts
across all industries it regulates. The
FERC proposal was a narrower version
of a proposed policy statement issued
in 2020 that drew heavy criticism from
major oil transporters, such as TC Energy
and Enterprise Partners Products.
In fact, the question of affiliate relationships
has intruded on FERC's gas
pipeline decisions, most recently the
Spire STL pipeline in St. Louis, which
FERC approved it in 2018. The Federal
Court of Appeals and the Supreme
Court both eventually entered the fray
as a result of environmental lawsuits.
But in December 2022, FERC finally
reissued Spire STL a permanent certificate
to operate the 65-mile natural gas
system, which was already in operation,
stating the project sufficiently satisfies
economic needs in the St. Louis region.
Perhaps more importantly, FERC
addressed interstate gas pipeline affiliate
relationships more broadly in its
March 2022 policy statement. Revising
the 1999-vintage pipeline
certificate
approval policy, FERC said in 2022,
" Further, the Commission concluded
that the common practice of utilizing
precedent agreements with affiliates of
the applicant(s) will 'generally be insufficient
to demonstrate need.' "
The Commission stated that it will
determine how much additional evidence
is required, on top of affiliate
precedent agreements, on a case-bycase
basis. However, FERC withdrew
that policy statement in April 2022
after it garnered heavy criticism, in
part because of its perceived negative
impact on U.S. natural gas production
and supply at the start of the Russian
invasion of Ukraine.
On the question of whether FERC's
revised affiliate policy for oil pipelines
improves on its 2020 effort, attorneys
in Washington who filed comments
for TC Energy (Marketlink and Keystone
pipelines) and Enterprise Products
(50,000 miles of pipelines NGLs,
crude oil, refined products, and petrochemicals)
did not respond to requests
for comments. UI
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