Natural Gas Liquids—Regulation: FERC/Not FERC? Determining Jurisdictional Status of NGL Pipeline Service

Abstract

AbstractAs the production of natural gas liquids (NGLs) has increased during the last five years—rising almost 40 percent from 2006 to 2012—existing pipeline transportation infrastructure has proven inadequate to handle these increased volumes of NGLs. The industry has responded to the need for NGL infrastructure investment in a variety of ways: by expanding existing NGL pipelines, repurposing pipelines that currently are idled or being used to transport other commodities, reversing existing lines, and constructing new greenfield pipelines. As the investment required for these NGL pipeline projects is significant and the demand for NGL transportation service is high, understanding the jurisdictional status of NGL pipeline transportation service and the regulatory implications of that status is imperative to pipeline owners and NGL producers alike. This article provides an overview of the jurisdictional question and examines the factors that are used to determine whether a NGL pipeline's transportation service will be subject to federal jurisdiction.