FERC Has Final Say On Pipeline Routing Over Active Coal Mining

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FERC Has Final Say On Pipeline Routing Over Active Coal Mining

On January 7, 2011, a federal court denied a petition filed by underground longwall coal mine operator Murray Energy Corporation (?Murray?) seeking review of Federal Energy Regulatory Commission (?FERC?) orders approving the construction of an interstate natural gas pipeline (?REX-East?) and the plan for post-construction monitoring and mitigation associated with expected subsidence from Murray?s longwall coal mining activities.

In 2007, Rockies Express Pipeline LLC (?REX?) filed an application with FERC seeking its permission to construct the REX-East pipeline. FERC approval is required for the construction of interstate natural gas pipelines, and FERC has jurisdiction over interstate natural gas pipeline routing. Murray objected to REX?s proposed route because eight miles of the route crossed over Murray?s active longwall mining operations or reserves that were the subject of planned mining. Longwall coal mining causes surface subsidence, which, in turn, can place stress on natural gas pipelines on the surface, possibly leading to their rupture and a resulting explosion.

When FERC approved the construction of the REX-East pipeline, FERC?s order contained a condition requiring REX to collaborate with Murray prior to construction of the pipeline over the Murray mining operations and file with FERC a construction and operations plan. The plan was to address expected subsidence issues from mining to maintain ?pipeline integrity and operation while not impeding the mining operation.? REX, after consultation with Murray, filed a plan with FERC containing several proposals to address and mitigate the effects of subsidence on the pipeline. FERC approved the plan in two orders, including one in response to Murray?s objections to the plan.

On appeal to the federal court, Murray challenged FERC?s orders on several grounds, including the alleged failure of REX?s plan to adequately ensure the safety of the pipeline. Among other things, Murray attacked REX?s experts and their recommendations. In denying Murray?s appeal, the court found that the expert recommendations and evidence supported FERC?s determination that REX?s plan, including the use of slanted-trench wall design, thicker-walled pipe, gentler pipe bends, and granular backfill, would adequately ensure the safety of the REX-East pipeline. The FERC-approved plan also provided for post-construction subsidence monitoring and mitigation measures, which included input and guidelines from the Department of Transportation Pipeline and Hazardous Materials Safety Administration (?PHMSA?).

The battle involving pipeline routing over active coal mining or coal reserves is one that can play out in several forums, but FERC has the ultimate say over the routing of interstate natural gas pipelines and the appropriate conditions applicable to their construction, such as the filing of a construction and operation plan in this case. Pipeline and coal mining operators should be aware of FERC precedent with respect to this type of routing conflict and take steps to preserve their respective rights and positions before FERC.

Should you have questions about this or any matter involving energy law, please contact the Energy Group at Steptoe & Johnson PLLC.

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