United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 8, 1998 Decided June 9, 1998
No. 97-1182
Williams Gas Processing-Gulf Coast Company, L.P.,
Petitioner
v.
Federal Energy Regulatory Commission,
Respondent
ANR Pipeline Company, et al.,
Intervenors
On Petition for Review of Orders of the
Federal Energy Regulatory Commission
James T. McManus argued the cause for petitioner. With
him on the briefs were Joseph S. Koury and Mari M.
Ramsey.
Patricia L. Weiss, Attorney, Federal Energy Regulatory
Commission, argued the cause for respondent. With her on
the brief were Jay L. Witkin, Solicitor, and John H. Conway,
Deputy Solicitor.
Stephen L. Teichler argued the cause for intervenor Exxon
Corporation. With him on the brief was Douglas W. Rasch.
Before: Wald, Williams and Tatel, Circuit Judges.
Opinion for the Court filed by Circuit Judge Williams.
Williams, Circuit Judge: Shell Gas Pipeline Company
proposed to build some natural gas facilities in the Gulf of
Mexico off the Louisiana Coast, to be known as the Garden
Banks Gathering System. In 1995 it filed a petition with the
Federal Energy Regulatory Commission requesting that they
be classified as "gathering" facilities, and therefore, under
s 1(b) of the Natural Gas Act, 15 U.S.C. s 717(b), free of
FERC's regulatory jurisdiction. The Commission granted
the request for some of the facilities, but decided that a 50-
mile long, 30-inch wide line, the Enchilada Pipeline, would be
a gas "transportation" facility rather than a gathering facility,
and so would be subject to its jurisdiction. Shell Gas Pipe-
line Co., 74 FERC p 61,277 (1996) ("Order"). Shell respond-
ed to the Order in two ways. First, it filed under s 7(c) of
the Act for a certificate authorizing construction and opera-
tion of the Enchilada line, which it received and accepted
under protest. Accordingly it started construction. Mean-
while it sought rehearing of the adverse classification deci-
sion, but the Commission denied rehearing. Shell Gas Pipe-
line Co., 78 FERC p 61,286 (1997) ("Order on Rehearing").
See id. at 62,245 (describing Shell's request for certification,
grant of the request, and Shell's acceptance under protest).
Shell has sought no judicial relief from FERC's classification
decision.
Williams Gas Processing, however, which had participated
in the initial classification proceeding and the rehearing peti-
tion, says that it is a "person aggrieved" by the Orders within
the meaning of s 19(b) of the Act, 15 U.S.C. s 717r(b), and
seeks review. It has pending before the Commission a
petition seeking re-classification as non-jurisdictional certain
facilities owned by its affiliate, Transcontinental Gas Pipe
Line Corp. ("Transco"), which it proposes to acquire from
Transco in a "spindown" transaction. The facilities are evi-
dently similar to the Enchilada and are located in its vicinity.
Although Williams regards the precedential effect of the
Enchilada classification as injurious, it does not push that as
its main injury, as it recognizes our long line of decisions
rejecting claims of standing based merely on supposed ad-
verse precedential effect. If the Commission applies the
Shell decision as a precedent in a way adverse to Williams's
application, Williams will be free to try to convince a court of
the error in the principle applied. See, e.g., Sea-Land Ser-
vice, Inc. v. Department of Transportation, 137 F.3d 640,
647-49 (D.C. Cir. 1998).
But Williams names an independent source of injury. It
points to Commission decisions suggesting that the classifica-
tion of facilities in the Outer Continental Shelf ("OCS") as
transportation or gathering may be affected by the character
of the lines in the vicinity, so that classification of a line as
transportation is more likely if the neighboring lines are so
classified. The Order here, it says, is yet another in a series
of decisions that have too readily classified OCS facilities as
jurisdictional; because Shell's Enchilada line is near the
Transco facilities, the Order increases the likelihood that the
Commission will reject its efforts to reclassify the latter as
gathering. It thus asserts a novel path-dependency theory,
under which the contested decision is said to injure the
protester by changing the context in which its own conduct
will be judged, independent of any precedential effect. Al-
though we are ready to assume the theoretical soundness of
Williams's claim, we find that Williams has failed to establish
in this case the kind of effects that are minimally necessary
for it to be aggrieved under the theory.
Williams's path-dependency theory turns on two proposi-
tions: first, that proximity to interstate transportation facili-
ties plays a large role in the Commission's classification
principles, and second, that the addition of the Enchilada line
to the facilities already so classified materially alters the odds
of Transco's own facilities being classified as jurisdictional.
There are weaknesses in both propositions.
We start with the second. The briefs do not point to
material in the record establishing the exact geographic
relation between the Enchilada and the Transco facilities, so
we asked at oral argument whether, given the pre-existing
lines classified as transportation rather than gathering, the
Enchilada's classification critically changed the chances of
Williams's reclassification petition. Williams's counsel ac-
knowledged that it did not. Moreover, counsel for the Com-
mission indicated (and Williams's counsel did not deny) that if
the propriety of a prior classification became pertinent in the
Transco case, the Commission would entertain the claim that
it had misclassified the relevant facilities. Accordingly, even
if Commission precedent assigned a very large role to the
status of adjacent facilities, it is not apparent that Williams
has shown the sort of serious impact on its case that would
constitute the sort of injury--"actual or imminent, not conjec-
tural or hypothetical," Lujan v. Defenders of Wildlife, 504
U.S. 555, 560 (1992) (internal quotations omitted)--that
amounts to aggrievement.
Moreover, the Commission does not appear to give sur-
rounding classifications the pre-eminence that Williams sug-
gests. In determining the jurisdictional status of pipelines, it
applies a "primary function" test, looking to the role the
pipeline plays in the natural gas network, i.e., whether it
serves primarily to gather gas from the wellhead, or to
transport gas already gathered. It has said that the relevant
factors include: (1) the length and diameter of the line, (2)
the extension of the line beyond the central point in the field,
(3) the line's geographic configuration, (4) the location of
compressors and processing plants, (5) the location of wells
along all or part of the facility, and (6) the operating pressure
of the lines. Order, 74 FERC at 61,895-96 & n.23 (citing
Farmland Indus., Inc., 23 FERC p 61,063, at 61,143 (1983)).
For offshore facilities the Commission has taken the view
that it must adjust its application of these criteria. Indicia
such as processor locations and pipeline lengths may be
misleading, since the processing tends to take place onshore
after long trips from the wellhead--increasingly long trips, as
technological advances make possible more distant and deep-
er exploitation. Thus, FERC has modified the primary func-
tion test in two significant ways. First, it decided in Amera-
da Hess, 52 FERC p 61,268, at 61,986 (1991), that the OCS
conditions justify treating as gathering facilities pipelines of
greater length and diameter than would be the case onshore:
[A] relatively long pipeline on the OCS may be consis-
tent with a primary function of 'gathering or production'
whereas an onshore pipeline of similar length would not.
Therefore, in applying the modified 'primary function'
test to OCS pipeline facilities the Commission will apply,
in effect, a sliding scale which will allow the use of
gathering pipelines of increasing lengths and diameters
in correlation to the distance from shore and the water
depth of the offshore production area.
Id. at 61,988. Second, FERC announced a policy, which it
applied in the Shell proceedings, that it would now apply a
presumption that facilities designed to collect gas at 200
meters or greater depth are gathering facilities, "up to the
point or points of potential interconnection with the interstate
pipeline grid. From there on, the Commission will apply its
'primary function' test to determine whether the facilities will
be considered to be jurisdictional...." Order, 74 FERC at
61,896 (citing Docket No. RM 96-5-000, Statement of Policy,
74 FERC p 61,222 (1996)).
To be sure, some of FERC's language in its initial applica-
tion of the modified test to the Enchilada pipeline tended to
support Williams's claim that proximity is destiny. In partic-
ular, it noted that the line "is proximate to jurisdictional
lines," and so "may be considered as the equivalent of a
capacity addition to the existing interstate pipeline infrastruc-
ture in the vicinity." Order, 74 FERC at 61,897.
In petitions for re-hearing, Williams and others challenged
this determination, on the grounds that the Enchilada line's
mere proximity to other jurisdictional pipelines, themselves
allegedly misclassified, had been the dispositive factor in
FERC's determination, irrespective of the line's individual
functional characteristics.
In denying the petitions for rehearing, FERC conceded
that proximity to jurisdictional lines was a factor in its
decision. But it rejected the petitioners' characterization of
the role of that factor. It explained, first, that proximity to
points of actual or potential interconnection with the inter-
state transportation grid was the occasion for the lapse of the
Commission's presumption that a deep-water line is a gather-
ing facility, and thus the trigger for the application of the test
in its post-Amerada Hess flexible form:
[R]ather than marking a change in function, the point(s)
of potential connection of a facility merely denotes the
termination of the presumption that part of a deep water
system is gathering.
Order on Rehearing, 78 FERC at 62,247. Second, FERC
enumerated a number of other factors, beyond proximity to
other jurisdictional pipelines, that played a role in its applica-
tion of the primary function test to the Enchilada: the
relatively large diameter of the Enchilada line (indicative of a
transmission function), its role as the central point for gas
collection (and so "representative of other long-haul transpor-
tation systems"), its function as a "capacity addition" to the
transportation grid, its location in shallow waters, and the
absence of any function of collecting gas from downstream
wells, id. at 62,250-54.
We of course express no opinion on the merits of the Order
or the Order on Rehearing. We cite them solely as confirma-
tion that in fact the Commission's disposition of the Shell
application will play only a modest role in its treatment of
Transco's petition, and that, accordingly, Williams is not
aggrieved.
We recognize that this decision leaves open a theoretical
possibility that Williams's position can suffer death by
inches--the Commission's errors could accrete so gradually
that no one prior step would be significant enough to afford it
standing. But where the accretions are small, it follows as a
matter of logic that, in order to build into a massive obstacle
for the late applicant, there must be many of them. This
increases the likelihood that some similarly positioned appli-
cant will find it worthwhile to challenge a Commission deci-
sion adverse to it. While a suit controlled by another is not
the same as a party's own suit, we know from class action law
that in some cases it is enough. We think it sufficient to
close the theoretical gap that results here from the applica-
tion of traditional standing law.
The petition for review is
Dismissed.