Oil Pipeline Regulation
Sidley has been actively engaged in representing oil pipelines in regulatory and related matters for over 30 years, principally in proceedings before the Federal Energy Regulatory Commission (FERC), state public service commissions and federal and state courts. Our clients have included most of the larger crude oil and petroleum products pipelines, including those which transport liquefied gases such as propane, in the lower 48 United States, and one or more owners of the Trans Alaska Pipeline System. We have also represented the oil pipeline trade association, the Association of Oil Pipe Lines. Our representation includes oil pipelines under various forms of ownership – including pipelines affiliated with the major oil companies, joint stock companies owned by multiple majors, undivided joint interest systems and independent pipelines.
The issues we have addressed in the course of these engagements have included rate reasonableness, non-rate tariff issues (e.g., prorationing and other terms and conditions of service), allegations of unlawful discrimination, the jurisdictional status of certain assets and services (including liquid pipelines not regulated by the FERC) and competitive access. Such issues have typically arisen under the Interstate Commerce Act (as administered by the FERC), but have also arisen under the Outer Continental Shelf Lands Act and the antitrust laws.
Sidley’s practice with respect to the Trans Alaska Pipeline System (TAPS) dates back to 1977, when TAPS was initially placed in service. Our practice has primarily involved the representation of one of the major owners of TAPS in rate proceedings before the FERC and Alaska regulatory agencies (currently, the Regulatory Commission of Alaska (RCA)), and in related appeals in the federal and Alaska state courts. We have also represented a major producer of Alaska North Slope crude oil in FERC, RCA and related appellate proceedings regarding the valuation of ANS crude oil for the TAPS Quality Bank.
In recent years, our efforts on behalf of lower-48 pipelines have focused on the regulatory implications of changes in the form and structure of companies owning oil pipelines, on obtaining advance regulatory assurances for new pipeline projects or expansions, transactions with affiliates, the design of equitable and efficient policies for prorationing scarce pipeline capacity and on market-based rates. We have been actively involved in the majority of market-based rate applications which have been filed with the FERC. In addition, we have been responsible for a number of years for advocating, both before the FERC and the Court of Appeals, an appropriate rate cap index for oil pipelines – the principal mechanism under FERC regulations for establishing lower-48 oil pipeline rates.
