[Federal Register Volume 68, Number 102 (Wednesday, May 28, 2003)]
[Rules and Regulations]
[Pages 31596-31605]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-13202]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 153, 157, and 375

[Docket Nos. RM03-4-000 and AD02-14-000; Order No. 633]


Emergency Reconstruction of Interstate Natural Gas Facilities 
Under the Natural Gas Act

Issued May 19, 2003.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
amending its regulations to enable natural gas interstate pipeline 
companies to replace mainline facilities using a route other than the 
existing right-of-way, and to commence construction without prior 
notice and without project cost constraints, when immediate action is 
required to restore service in an emergency due to a sudden 
unanticipated loss of natural gas or capacity for protection of life or 
health or for maintenance of physical property. In addition, the 
Commission is revising reporting requirements so that a natural gas 
company, in responding to an emergency, would submit a report 
describing intended actions to the Commission in advance of commencing 
construction, rather than reporting actions taken after the fact, as is 
currently the case. The Commission revises its regulations to state 
that the requirement to provide landowners with 30-day prior notice is 
met if all affected landowners grant easements. The Commission is also 
amending its regulations to specify that the revisions related to 
emergency reconstruction will apply to facilities subject to Section 3 
of the Natural Gas Act (NGA). Finally, the Commission is amending its 
regulations to delegate authority to waive certain landowner notice 
requirements and to make certain judgments in the field regarding the 
construction and operation of gas facilities. An important objective of 
the final rule is the reconciliation of the Commission's regulatory 
responsibilities under its enabling statutes and federal environmental 
and safety laws with the need to protect persons and property.

EFFECTIVE DATE: The rule will become effective July 14, 2003.

FOR FURTHER INFORMATION CONTACT: 
Robert Christin, Office of the General Counsel, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426, 
(202) 502-6022.
Gordon Wagner, Office of the General Counsel, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-
8947.
Berne Mosley, Office of Energy Projects, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-
8625.

SUPPLEMENTARY INFORMATION: Before Commissioners: Pat Wood, III, 
Chairman; William L. Massey, and Nora Mead Brownell.

Introduction

    1. The Federal Energy Regulatory Commission (Commission) is 
amending part 157, subpart F, of its regulations to enable natural gas 
interstate pipeline companies to replace mainline facilities using a 
route other than the existing right-of-way, and to commence 
construction without 45-day prior

[[Page 31597]]

notice and without project cost constraints, when immediate action is 
required to restore service in an emergency due to a sudden 
unanticipated loss of natural gas or capacity for protection of life or 
health or for maintenance of physical property. In addition, the 
Commission is revising reporting requirements so that a natural gas 
company acting under part 157 in responding to an emergency would 
submit a report describing intended actions to the Commission in 
advance of commencing construction, rather than reporting actions taken 
under part 157 after the fact, as is currently the case. The Commission 
revises part 157 to state that the requirement to provide landowners 
with 30-day prior notice is met if all affected landowners grant 
easements. The Commission is also amending part 153 to specify that the 
regulatory revisions related to emergency reconstruction will apply to 
facilities subject to Section 3 of the Natural Gas Act (NGA). Finally, 
the Commission is amending part 375 of its regulations to delegate 
authority to waive certain landowner notice requirements and to make 
certain judgments in the field regarding the construction and operation 
of gas facilities. An important objective of the proposed rule is the 
reconciliation of the Commission's regulatory responsibilities under 
its enabling statutes and federal environmental and safety laws with 
the need to protect persons and property.

Background

    2. On January 17, 2003, the Commission issued a notice of proposed 
rulemaking (NOPR),\1\ seeking comments on how it might facilitate the 
restoration of gas service in an emergency due to a sudden 
unanticipated loss of gas or capacity threatening loss of life, 
impairment of health, or damage to property. The NOPR was prompted, in 
part, by Commission and energy industry attention to operational safety 
concerns, in particular, the potential impacts of deliberate damage to 
energy facilities. On April 22, 2002, staff from the Commission and 
from the Department of Transportation Office of Pipeline Safety (OPS) 
jointly convened a technical conference to consider whether and how to 
clarify, expedite, and streamline permitting and approvals for 
interstate pipeline reconstruction following a sudden unanticipated 
service disruption.\2\ Efforts to ensure the security of the nation's 
energy infrastructure have generally focused on maintaining the 
physical integrity of facilities and preparing to respond to accidents, 
such as excavation that breaches a buried pipe, natural disasters, such 
as earthquakes and landslides, and foreseeable equipment failure. The 
conference broadened this focus to consider how best to respond to 
damage due to a deliberate effort to disrupt the flow of natural gas.
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    \1\ Emergency Reconstruction of Interstate Natural Gas 
Facilities Under the Natural Gas Act, 68 FR 4120 (Jan. 28, 2003), 
FERC Stats. & Regs. ] 32,567 (Jan. 17, 2993).
    \2\ On the following day, staff from the Commission and from the 
Department of Energy (DOE) jointly convened a technical conference 
to consider whether to or how to clarify, expedite, and streamline 
the reallocation of gas supplies in the event of a sudden 
unanticipated service disruption. That proceeding, in Docket No. 
AD02-15-000, is not addressed here.
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    3. At the conference, Commission and OPS staff provided an overview 
of current regulatory processes and presented examples of recent 
natural gas emergencies. Conference participants--representing federal, 
state, and local agencies, energy industry sectors, trade groups, and 
interested individuals--suggested various means to speed the 
reconstruction of interstate gas facilities, including: revising 
existing legislative mandates, revising Commission regulations, and 
enhancing coordination among federal, state, and local entities. A 
transcript of the conference and the comments subsequently submitted 
are contained in the record in Docket No. AD02-14-000.\3\
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    \3\ The conference comments are available on FERC's Web site at 
http://ferc.gov using the Federal Energy Regulatory Records and 
Information System (FERRIS) to access filings in Docket No. AD02-14-
000. The Interstate Natural Gas Association of America (INGAA) 
submitted scenarios describing how interstate pipelines might 
respond to various types of facility-related emergencies. Because of 
security concerns associated with disclosing this information, these 
scenarios are not included in the public record in Docket No. AD02-
14-000; however, while the particulars of the scenarios are not 
described in detail in the public record, the results are discussed 
in general.
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    4. In general, it appears the Commission's existing authorities and 
policies are sufficient, and sufficiently flexible, to enable pipelines 
to respond to emergencies in a timely manner. However, in view of the 
April 2002 conference, and comments in response to the January 2003 
NOPR, the Commission has identified circumstances under which its 
present practices could constrain a pipeline from implementing a timely 
response. Accordingly, as discussed below, the Commission is amending 
its regulations to better enable pipelines to recover from an emergency 
interruption in service.

Comments in Response to the January 2003 NOPR

    5. Timely comments in response to the NOPR were filed by the 
American Gas Association (AGA); Duke Energy Gas Transmission (Duke); 
INGAA; KM Pipelines; \4\ KO Transmission Company (KO Transmission); 
MidAmerican Energy Company (MidAmerican); NiSource Pipelines 
(NiSource); \5\ Northern Natural Gas Company (Northern Natural); the 
Process Gas Consumers Group (Process Gas Consumers); the Public Service 
Commission of the State of New York (New York PSC); and Williston Basin 
Interstate Pipeline Company (Williston Basin). Untimely comments were 
submitted by the United States Department of the Interior, Fish and 
Wildlife Service (FWS) and the Public Utilities Commission of Ohio 
(Ohio PUC), which we accept, as to do so will not delay, disrupt, or 
otherwise prejudice this proceeding.
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    \4\ KM Pipelines consists of Kinder Morgan Interstate Gas 
Transmission, LLC; Natural Gas Pipeline Company of America; 
Trailblazer Pipeline Company; and TransColorado Gas Transmission 
Company.
    \5\ NiSource consists of Columbia Gas Transmission Corporation; 
Columbia Gulf Transmission Company; Granite State Gas Transmission, 
Inc.; and Crossroads Pipeline Company.
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Revisions to the Commission's Regulations

    6. In the NOPR, we requested comments on the adequacy of the 
Commission's existing authority to expedite the restoration of service 
following an emergency gas disruption, and whether the expansion of 
authority proposed would be sufficient to meet pipelines' emergency 
reconstruction requirements. In the NOPR, we described a situation 
where a pipeline could experience damage to its facilities, and then be 
unable to gain access to the site of the damage (for example, access 
may be obstructed in the case of a landslide, or restricted in the case 
of an investigation). In such circumstances, we seek to ensure that 
pipelines have authority adequate to be able to restore service 
rapidly. In particular, we question whether a traditional NGA Section 
7(c) certificate application will prove practical, since even with 
accelerated processing of the application, the optimal time line to 
take action will inevitably be extended. An NGA Section 7(c)(1)(B) 
temporary certificate may be issued with dispatch, but may be 
inadequate if repairs require more than minor enlargements or 
extensions of existing facilities. Under Sec.  2.55 of our regulations, 
a pipeline can

[[Page 31598]]

replace or repair facilities, but only within the footprint of the 
existing facilities, and where costs are expected to exceed $7.5 
million,\6\ only after 45 days advance notice to the Commission. In 
view of these constraints, we have elected to expand the scope of 
construction currently allowed under part 157, subpart F, of our 
regulations.
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    \6\ This amount is adjusted annually. See 18 CFR 157.208(d) 
(2002), Table 1, column 1.
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    7. Almost all interstate gas pipelines now hold part 157 blanket 
certificates that permit the automatic construction, operation, 
abandonment, replacement, and rearrangement of certain ``eligible 
facilities.'' To facilitate pipelines'' capability to act expeditiously 
to respond to an emergency,\7\ we propose to expand the scope of 
``eligible facilities'' to include mainline facilities that require a 
new right-of-way, and system modifications such as adding compression, 
that could compensate for impaired gas flows. Further, for emergency 
reconstruction, we propose to lift the current $21 million project cost 
limit and forego the prescribed 45-day public notice requirement.\8\ In 
addition to the 45-day public notice, a gas company acting under 
blanket authority is required to make a good faith effort to notify all 
affected landowners 30 days prior to commencing construction or at the 
time it initiates easement negotiations. We retain this landowner 
notification requirement, but as stated in the January 2003 NOPR, once 
a company has contacted landowners, we will consider a company request 
to waive the remainder of the 30-day landowner notice period.\9\

Defining an Emergency
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    \7\ We add Sec. 157.202(b)(13) to define an emergency as ``a 
sudden unanticipated loss of gas supply or capacity that requires an 
immediate restoration of interrupted service for protection of life 
or health or for maintenance of physical property.''
    \8\ Id. The cost cap is adjusted annually. Currently, the 45-day 
prior notice only applies to projects costing more than $7.5 
million.
    \9\ We note that Sec. 157.203(d)(3) of our regulations provides 
for exceptions to the landowner notification requirements.
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    8. The expanded reconstruction authority applies to activities 
required to restore service for protection of life or health or for 
maintenance of physical property in an emergency due to a sudden 
unanticipated loss of gas or capacity. INGAA and Duke are concerned 
that under this criteria, ``eligible facilities'' as defined under 
Sec.  157.202 of the Commission's regulations would not include repairs 
or replacement to respond to damage that did impair a company's ability 
to meet contractual commitments, but that did not present a direct 
threat to life, health, or property.
    9. NiSource objects to describing an emergency as a ``sudden 
unanticipated'' loss of gas or capacity, characterizing ``sudden'' as 
an unnecessary qualification. NiSource would curtail the definition of 
an emergency to an ``unanticipated'' loss of gas or capacity.
    10. The Process Gas Consumers Group, representing industrial end 
users, believes that the economic harm a factory may incur due to an 
interruption in gas deliveries should be construed as property damage 
qualifying for reconstruction authorization under the emergency blanket 
regulations. To this end, the Process Gas Consumers Group endorses 
expanding Sec.  157.205(a) and Sec.  157.208 of our regulations to 
include reconstruction ``activity required to restore service in an 
emergency due to a sudden unanticipated loss of natural gas supply or 
capacity in order, for example, to prevent loss of life, impairment of 
health, economic harm to end users, or damage to property.''

Commission Response

    11. Restricting the expanded part 157 authority to emergencies that 
require an immediate response for protection of life or health or for 
maintenance of physical property is deliberate. Circumstances that 
frustrate a pipeline's capability to meet certain customer needs--but 
that do not otherwise pose a direct threat to life, health, or 
property--are most appropriately addressed, as has been the case until 
now, under the terms of a pipeline's existing tariff and our non-
emergency rules and regulations. Rather than expanding the definition 
of emergency to include economic damages, as the Process Gas Consumers 
Group proposes, we suggest such damages, particularly business losses 
due to disrupted gas deliveries to end users, may be managed by being 
insured against, or by employing dual fuel capabilities, or by 
addressing parties' responsibilities in the terms of service. We seek 
to keep emergencies focused on threats to life, health, or property, 
and including economic damage in the definition of emergency risks is 
an inappropriate expansion of the new regulatory provisions, given that 
a reasonable argument might be made that any gas curtailment 
constitutes a threat to economic welfare. In view of this, we will not 
enlarge the definition of emergency to include economic damage.
    12. To emphasize that an emergency be precipitated by events which 
a company could not be expected to predict or prepare for, we retain 
both ``sudden'' and ``unanticipated.'' We note this definition of 
emergency is consistent with that of Sec.  284.262(2) of our 
regulations, which also defines an emergency as a ``sudden 
unanticipated loss of natural gas supply or capacity.''

Eligible Facilities

    13. INGAA, Duke, and Williston Basin observe that the NOPR focuses 
on reconstruction that necessitates a pipeline's deviating from its 
existing right of way, and ask that in the final rule the Commission 
explicitly apply the expanded emergency blanket authority, i.e., waiver 
of prior notice and lifting the project cost cap, to construction 
within the existing right of way. INGAA and Duke propose that the Sec.  
157.202(b)(2)(i) definition of ``eligible facilities'' read as follows:

    Emergency replacements are any restoration of pre-existing 
mainline capacity, including the reconstruction of mainline 
facilities either inside or outside the existing right of way and 
the modification of facilities to rearrange gas flows or increase 
compression for the primary purpose of restoring pre-existing 
service and/or capacity to protect life, prevent impairment of 
health, or damage to property due to the sudden unanticipated damage 
to mainline facilities.

    14. The New York PSC observes that in addition to rebuilding to 
replace damaged facilities, it may be possible, and potentially more 
efficient, to restore essential service by making modifications to 
undamaged portions of a pipeline's system. To allow for such 
modifications, the New York PSC would expand ``eligible facilities'' to 
include construction intended to redirect gas flows on a pipeline's 
system.
    15. To ensure that the expanded authority is employed prudently, 
FWS recommends that Sec.  157.202(B)(2)(i) apply ``only when the 
construction within the existing footprint may be prohibited due to 
natural disasters, or acts of national security.''
    16. KM Pipelines state that from an operational standpoint, 
compressors and storage facilities are integral parts of mainline 
systems, and so argues that compressors and storage facilities should 
be explicitly included within the meaning of mainline facilities. Duke 
asks that the Commission clarify that the emergency blanket provisions 
will cover conventional storage facilities.
    17. INGAA requests the Commission specify that when replacing 
damaged facilities, a pipeline need not duplicate the damaged 
facilities, but may make use of components of ``substantially similar 
capacity.'' INGAA points out that emergency repairs can be made most 
rapidly by using supplies readily available in inventory. INGAA 
therefore

[[Page 31599]]

requests regulatory leeway to use substantially similar accessible 
supplies when duplicate replacement supplies are not readily available. 
INGAA observes that Sec.  2.55(b)(ii) of the Commission's regulations 
already specifically accepts the substitution of approximately 
equivalent components.

Commission Response

    18. Our aim is to enable a company to recover from an emergency as 
soon as possible, and we assume recovery will be quickest (and most 
cost effective) when a company can repair or replace damaged facilities 
within the original footprint, since such efforts can be expected to 
minimize the need for easements and environmental approvals. Thus, we 
expect that reconstruction within the right-of-way will, when possible, 
be preferred. However, although an existing right-of-way may remain 
accessible, we can envision circumstances where new construction along 
a new right-of-way could be the more rapid means to restore service. We 
therefore want to offer pipelines options when rebuilding, and for this 
reason, we will not adopt the FWS proposal that we permit pipelines to 
use the new blanket authorization to reconstruct on a new right-of-way 
only when the existing right-of-way is unavailable. We clarify that 
although the NOPR emphasized the applicability of expanded emergency 
blanket authority to reconstruct outside of an existing right-of-way, 
we also intend for emergency blanket authorization to apply to 
reconstruction within the existing right-of-way. Consequently, we find 
no need to alter the revised regulatory language as suggested by INGAA, 
Duke, and Williston Basin.
    19. As proposed, we will add ``the modification of facilities to 
rearrange gas flows or increase compression'' to Sec.  
157.202(b)(2)(i), as we find this phrase better expresses our intent to 
make it possible for a damaged pipeline to rely on the new emergency 
blanket provisions to modify its system as needed to restore service. 
We are concerned that absent this additional description of potential 
authorized actions, the emergency blanket provisions could be construed 
as restricting a pipeline to either the repair or replication of 
damaged facilities, with the sole exception of rerouting a mainline. 
Such an interpretation could constrain a pipeline's emergency recovery 
efforts, thereby prolonging service shortfalls, and thereby limit the 
utility of the new blanket regulations and undermine our aim to speed 
recovery efforts. Thus, if a pipeline finds it is able to restore 
interrupted service faster by adding new facilities--such as 
compression at an undamaged site or equipment to enhance storage 
withdrawals--than by replacing or repairing damaged facilities, we want 
pipelines to have emergency blanket authority to add such facilities. 
Further, if a pipeline can safely adjust operating parameters or can 
rearrange facilities on its system in order to compensate for a service 
interruption, the emergency blanket regulations should permit such 
modifications. Accordingly, we will add ``the modification of 
facilities to rearrange gas flows or increase compression'' to those 
actions permitted under emergency blanket authority. This revision may 
be interpreted as encompassing the redirection of gas flows, as 
requested by the New York PSC.
    20. We note that in an emergency, pipelines are to focus on the 
immediate restoration of services essential for protection of life or 
health or for maintenance of physical property; thus, ``the 
modification of facilities'' applies only those modifications devoted 
to this priority. In reviewing pipelines' advance notice of emergency 
reconstruction, we will consider whether the described activities are 
consistent with this priority.
    21. INGAA and Duke propose to employ emergency authorization to 
restore pre-existing service. We stress that unless a company's 
inability to fulfill its service contracts presents a direct threat to 
life, health, or property, no emergency exists, and where no emergency 
exists, it would be inappropriate to invoke emergency authority. We 
reiterate our observation in the NOPR that this ``enlargement in the 
scope of permissible actions under part 157, subpart F, is restricted 
to actions necessary to restore service after an interruption due to an 
emergency event,'' and does not apply to ``circumstances [that] would 
not qualify as an emergency.'' \10\ However, provided an incident 
causing an interruption in service qualifies as an emergency, we 
clarify that a company may rely on the expanded blanket emergency 
provisions to replace or rearrange facilities in order to reinstate 
service up to the level it previously provided.
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    \10\ FERC Stats. & Regs. ] 32,567, at 34,683.
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    22. We believe it is reasonable to permit a pipeline to employ the 
most readily available materials in an emergency. The public interest 
in restoring service should not wait on the delivery of an order for 
new materials that match the damaged facilities. Accordingly, we 
clarify that in an emergency a pipeline may use components of 
substantially similar capacity. The current regulations implicitly 
permit such substitutions. As INGAA comments, the `substantially 
similar capacity' allowance is the Sec.  2.55(b)(ii) standard.'' \11\ 
Section 157.202(b)(2)(i) of our regulations expands upon this, allowing 
``replacements that do not qualify under Sec.  2.55(b) of this chapter 
because they will result in an incidental increase in the capacity of 
main line facilities.'' Provided replacement facilities that differ 
from the original facilities result in no more than an incidental 
increase in capacity, we expect such replacements will be acceptable 
under the expanded emergency blanket certificate authorization. We note 
that the Sec.  157.207 report of intended action under emergency 
blanket authority should serve, inter alia, to inform the Commission of 
circumstances that merit the use of replacement facilities that are not 
a one-to-one match for a system's existing facilities.
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    \11\ Specifically, Sec. 2.55(b)(ii) states that ``replacement 
facilities will have a substantially equivalent designed delivery 
capacity.''
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Notice Requirements

    23. INGAA, Duke, and NiSource support the proposal to omit the 
Sec.  157.203(a) 45-day public notice period for emergency 
reconstruction, and urge the Commission to similarly exempt pipelines 
from the Sec.  157.203(d) 30-day landowner notice requirement. Noting 
the Commission's stated willingness to consider requests to waive the 
30-day landowner notice, the parties nevertheless view this approach as 
uncertain and time consuming, and favor omitting the Sec.  157.203(d) 
landowner notice. INGAA and Duke contend this notice is unnecessary, as 
it is duplicative of a pipeline's obligation to either obtain voluntary 
easements from landowners or obtain easements through condemnation 
proceedings.
    24. Northern Natural believes that in an emergency that threatens 
life, health, or property, the public interest in prompt remedial 
action should outweigh the landowners' interest in notification.\12\ 
Therefore, Northern Natural recommends that the Commission modify Sec.  
157.203(d)(3) to exclude landowner notice in an emergency; with 
emergency construction limited to the minimal disturbance needed to 
restore service and to landowners directly impacted. Alternatively, 
Northern Natural suggests that landowner notification and

[[Page 31600]]

construction be allowed to take place concurrently.
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    \12\ Northern Natural speculates that in an emergency, property 
owners may be unavailable and communications unreliable.
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    25. Duke, Northern Natural, and KM Pipelines are concerned that 
efforts to negotiate in good faith with landowners to obtain easements 
prior to exercising eminent domain authority could delay 
reconstruction. Recognizing that the mechanics and pace of this 
judicial process are outside of the Commission's domain, Duke asks the 
Commission to ``acknowledge * * * the need for and benefit of an 
expedited eminent domain process'' in an emergency, so as to encourage 
courts to facilitate expedited entry onto lands and Congress to modify 
statutory limitations. Northern Natural similarly urges the Commission 
to coordinate regulatory and statutory changes with other agencies to 
expand powers of eminent domain and blanket waivers, and ``employ its 
maximum allowable authority to expedite the process in an emergency.'' 
KM Pipelines encourage the Commission to seek legislative revisions so 
that in an emergency, environmental statutes and related regulations 
may be waived to allow for immediate reconstruction. KM Pipelines 
propose that such revisions provide for the Commission to declare an 
emergency exists, after which pipelines will be able to obtain an 
expedited court condemnation order to gain access to land, with a 
separate determination on compensation to follow at a later date.

Commission Response

    26. It is necessary to find the proper balance between facilitating 
the immediate restoration of service in an emergency, via a new right-
of-way if necessary, and safeguarding the due process rights of 
affected landowners, but we believe eliminating landowner notice shifts 
the balance too far. The landowner notice requirements protect the 
public interest by ensuring that property rights are respected and that 
any necessary new easements adhere to applicable state procedures.\13\ 
Thus, we will retain the Sec.  157.203(d) requirement that a pipeline 
make a good faith effort to provide all affected landowners with 30-day 
notice. We note that regardless of the Commission's regulations, 
landowners must be contacted for the purpose of obtaining an easement, 
and this contact may serve as notice for the purpose of complying with 
Sec.  157.203(d) of our regulations.
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    \13\ Note that landowner notice is not required under the 
exemptions specified in Sec.  157.203(d)(3) of the Commission's 
regulations.
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    27. We suggest that the greater the magnitude and urgency of an 
emergency, the more persuasive pipelines may be in negotiating 
voluntary easements. Involuntary easements compelled through the 
exercise of the right of eminent domain are subject to state law, and 
we suggest that the nature of the emergency may influence the 
willingness of state authorities to intervene to expedite their 
procedures. In view of this, we are not willing to forego prior notice 
to landowners, as requested, in its entirety.
    28. We nevertheless believe that modifications may be made to the 
landowner notice requirements to speed the process while retaining 
relevant landowner protections. Under Sec.  157.203(d) of our current 
regulations, a landowner, once notified in accordance with Sec.  
157.6(d)(2) and Sec.  157.203(d)(2) of our regulations, may waive the 
30-day aspect of the prior notice requirement. We will expand this and 
revise Sec.  157.203(d) to state that ``For activity required to 
restore service in an emergency, the 30-day prior notice period is 
satisfied in the event a company obtains all necessary easements.'' We 
believe that once a company has reached voluntary agreements with all 
landowners affected by a new right-of-way, there is no remaining 
landowner interest to be protected by awaiting the expiration of the 
remainder of the 30-day prior notice period. In addition, we will 
provide the Director of the Office of Energy Projects (OEP) with the 
authority to waive landowner notice requirements, as necessary or 
appropriate, by adding a new Sec.  375.308(w)(5), to state that the OEP 
Director, or the Director's designee, has the delegated authority to 
take appropriate action on ``Requests for waiver of the landowner 
notification requirements in Sec.  157.203(d) of this chapter.''
    29. We agree with those comments that stress the need for pipelines 
to be able to obtain new right-of-way to build around damaged portions 
of pipe. That said, as commenters observe, the mechanics and pace of 
the process of obtaining a new easement by right of eminent domain are 
beyond the scope of this Commission's jurisdiction.\14\ Consequently, 
we are unable to commit to effecting changes in other agencies' 
regulations or our own statutory authority. We nevertheless can and do 
commit to working with local, state, and federal authorities to 
coordinate and expedite emergency reconstruction efforts.
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    \14\ We specifically requested views on the need for further or 
broader action by the Commission or Congress to inform our 
consideration of changes we might make to ensure the continued 
integrity of the energy infrastructure.
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Advance Report of Emergency Reconstruction Activities

    30. In the NOPR, we noted that under the existing Sec.  157.207 
reporting requirements, companies submit a retrospective annual report 
describing the projects completed under blanket authority during the 
prior year. Because the expanded emergency blanket authority provisions 
omit the requirement that companies give 45-day prior notice for public 
comment on projects costing more than $7.5 million, we modified this 
section to require that companies intending to rely on emergency 
blanket authority submit an advance report to the Commission describing 
their preparations and plans before commencing reconstruction.
    31. NiSource does not object to notifying the Commission prior to 
proceeding with emergency reconstruction activities, as long as the 
Commission acknowledges and accepts that the initial description of the 
problem and remedial plan may be inexact and subject to change in light 
of the incomplete information and urgency inherent in an emergency.
    32. Northern Natural observes that Sec.  260.9(b) allows companies 
to deliver notices of gas service disruptions to the Commission ``by 
any electronic means'' and asks that if the Commission retains an 
emergency advance report requirement, it should permit pipelines to 
deliver this report by electronic means. Further, Northern Natural 
seeks clarification that the advance report filing applies only to 
emergency activities under the proposed expanded blanket authority, and 
will not be interpreted to apply to activities that come under current 
no-notice blanket authority. Northern Natural worries that an emergency 
may disrupt communications between pipelines and governmental agencies.

Commission Response

    33. We accept that in attempting to restore service in response to 
an emergency, a pipeline's preparation and planning will not be as 
thorough and predictable as would be the case in describing a proposed 
non-emergency construction project. Accordingly, we do not expect to 
hold a pipeline to the precise parameters set forth in the advance 
report describing its intended emergency reconstruction.
    Further, while we will expect a pipeline to submit as complete and 
accurate a report as is practical, as stated in the NOPR, we recognize 
that it will not be possible ``to supply all the information routinely 
set forth in a

[[Page 31601]]

standard annual blanket report.''\15\ It is in part in anticipation of 
inevitable infirmities in an advance report that we expect a company 
undertaking emergency reconstruction to consult with the Commission 
during reconstruction, and to that end, where necessary, the Commission 
will have a staff member present on site.
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    \15\ FERC Stats. & Regs. ] 32,567, at 34,686.
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    34. In response to Northern Natural, we observe that the existing 
Sec.  260.9 requirement to report serious service interruptions 
occurring on a pipeline system is not affected by the new regulations 
set forth herein. We acknowledge the utility of allowing an advance 
report, described in the new Sec.  157.207 general reporting 
requirements, to be filed by electronic means. Accordingly, we will 
provide an electronic filing option for these advance reports via the 
eFiling link on the Commission Web site at www.ferc.gov. Companies 
filing advance reports in accordance with the emergency blanket 
certificate provisions should select the filing type ``Notice/Report of 
Intent to Use Emergency Procedures'' from the eFiling System Filing 
Type Selection menu for Gas. If the report cannot be electronically 
filed due to file size or content restrictions (e.g., large maps) in 
the Commission's eFiling system, then the report may be submitted on CD 
ROM. We will post procedures for filing these advance reports on our 
Web site and update those procedures as the eFiling system expands to 
accommodate more complex filings.
    35. We clarify that the requirement for advance notice only 
applies, as described in Sec.  157.207, ``[i]n the case of an emergency 
due to a sudden unanticipated loss of natural gas supply or capacity.'' 
When a pipeline is acting under existing non-emergency blanket 
authority, the existing annual report requirement applies, as do the 
existing project cost limit and 45-day prior notice requirements. 
Pursuant to the existing blanket regulations, non-emergency projects 
under the current $7.5 million cost cap qualify for automatic no-notice 
authorization.

Compliance With Environmental Obligations

    36. INGAA urges that the Commission work with other relevant 
governmental entities in order to coordinate the environmental review 
process to expedite permits and approvals needed to effect pipeline 
repairs. INGAA observes that for emergency actions subject to an EIS--
but not for emergency actions subject to an EA--the Commission may 
consult with CEQ with the aim of developing alternative NEPA compliance 
arrangements.\16\ To address this regulatory asymmetry, INGAA proposes 
that the Commission expressly waive its requirement that an EA be 
prepared in the case of an emergency.
---------------------------------------------------------------------------

    \16\ See 40 CFR 1506.11 (2002).
---------------------------------------------------------------------------

    37. NiSource suggests that ``[t]he presence of a Commission Staff 
inspector (with stop work authority)'' on site may prove ``inconsistent 
with the emergency response action environment that will dominate the 
construction project.''\17\ However, if the Commission chooses to send 
a representative to oversee emergency reconstruction, NiSource requests 
that the representative have broad authority to grant on-site 
variances, including variances of the Commission's environmental 
construction guidelines.
---------------------------------------------------------------------------

    \17\ NiSource's Comments, at 6 (February 27, 2003).
---------------------------------------------------------------------------

    38. The Ohio PUC advocates deploying Commission staff to the 
affected site to coordinate with other federal, state, and local 
agencies to review routing and environmental mitigation. FWS recommends 
Commission staff be present and actively involved where reconstruction 
cuts a new right-of-way.
    39. FWS asks that we clarify the applicability of the environmental 
compliance conditions of Sec.  157.206(b) to actions proceeding under 
the expanded emergency blanket provisions. In addition, FWS proposes 
that the Commission introduce an emergency action plan into its 
certification of interstate pipeline facilities that would include the 
consideration of alternative right-of-way routes, surveyed in advance 
to determine areas of environmental sensitivity, and list contact 
numbers for the appropriate agencies' field offices.

Commission Response

    40. Under Sec.  380.4(a)(21) of our regulations, certain activities 
authorized under the part 157, subpart F, blanket certificate 
regulations are categorically excluded from environmental review. 
However, construction projects subject to prior notice under Sec.  
157.208(b) normally require an EA.\18\ In addition, in all cases, 
projects constructed under blanket certificate authorization are 
subject to the environmental conditions of Sec.  157.206(b). That 
section requires that the certificate holder adopt specific siting and 
maintenance provisions, that the project activities are consistent with 
all applicable environmental statutes, regulations, and compliance 
plans, and that the project ``shall not have a significant adverse 
impact on a sensitive environmental area.''
---------------------------------------------------------------------------

    \18\ See 18 CFR 380.5(b)(2) (2002).
---------------------------------------------------------------------------

    41. Construction performed under the emergency rule adopted herein 
is subject to the environmental requirements of Sec.  157.206(b). Among 
other things, these provisions require all authorized activities to be 
consistent with applicable environmental laws, impose limits on 
compressor noise, require companies to adopt the environmental 
mitigation conditions set out in Sec.  380.15 of the Commission's 
regulations, and prohibit any activity that would have an adverse 
effect on a sensitive environmental area. To the extent that a company 
cannot comply with the Sec.  157.206(b) requirements, the company 
cannot rely on blanket certificate authority to complete the project, 
and would have to seek separate authorization. In addition, as provided 
in the new Sec.  385.308(x)(7) discussed below, the regulations 
established herein specifically delegate to the OEP Director the 
authority to ensure the protection of environmental resources during 
the course of construction. This includes authority to employ staff 
with stop work authority to monitor construction activities. Under all 
of these circumstances, we find that a project undertaken in accordance 
with these expanded emergency blanket regulations, including the 
specified environmental limitations, will not constitute a major 
federal action significantly affecting the quality of the human 
environment and will not require a separate EA prior to construction.
    42. We do not share NiSource's concern that having Commission Staff 
on site might impede emergency reconstruction efforts. To the contrary, 
we expect the presence of Commission Staff with authority to ensure 
compliance with environmental mitigation measures, including the 
authority to grant on-site variances to enable a company to adopt 
alternative means to meet environmental requirements, will speed 
reconstruction efforts. Accordingly, we will amend our Sec.  375.308 
regulations to specify that a staff member designated by the OEP 
Director, present on the emergency construction site as necessary or 
appropriate, shall have delegated authority sufficient to ensure 
environmental protection. Specifically, we will add a new Sec.  
375.308(x)(7), to state that the OEP Director, or the Director's 
designee, has the delegated authority to ``Take whatever steps are 
necessary to ensure the protection of all environmental resources 
during the construction or operation of natural gas

[[Page 31602]]

facilities, including authority to design and implement additional or 
alternative measures and stop work authority.''
    43. Recognizing that recovery from a gas emergency will call for 
actions and authorizations by entities other than this Commission, 
comments plead for a plan for inter-governmental interaction. The 
nature of an emergency as a sudden unanticipated event makes advance 
identification of the relevant authorities that will need to be 
involved in responding to an emergency, and the role each will play, 
impractical. Nevertheless, we can name those regional entities that are 
most likely to be involved in recovery efforts, and as a first step to 
facilitate communication and coordination, we will make contact 
information for these entities available via our Web site.\19\
---------------------------------------------------------------------------

    \19\ FWS, in response to the NOPR, invites the Commission to 
contact its ``appropriate regional office to expedite and facilitate 
a coordinated emergency response,'' which we expect to do. With 
respect to intergovernmental coordination in an emergency, as 
discussed in the NOPR, we expect the Department of Energy's Office 
of Energy Assurance to play a role in overseeing energy industry 
equipment stockpiles and mutual aid pooling and exchange programs; 
identifying critical facilities, equipment, and personnel; 
establishing communications protocol; and developing security and 
contingency plans. In addition, we anticipate the Department of 
Homeland Security will coordinate response resources in the event of 
a terrorist attack or other disaster. Further, pursuant to Sec.  
16(a)(1) of the Pipeline Safety Improvement Act of 2002, an 
interagency committee, headed by CEQ, with the Commission among its 
members, is charged ``to develop and ensure implementation of a 
coordinated environmental review and permitting process in order to 
enable pipeline operators to commence and complete all activities 
necessary to carry our pipeline repairs'' expeditiously. To the 
extent changes to the Commission's rules may be necessary to address 
safety concerns, we expect the interagency committee called for by 
this Act will provide a vehicle for identifying the relevant issues. 
We believe that this Commission can best support intra- and inter-
governmental and industry coordination by contributing to and 
participating in these efforts.
---------------------------------------------------------------------------

    44. FWS requests clarification with respect to Sec.  157.206 of our 
regulations. As stated in the NOPR, the applicable conditions set forth 
in Sec.  157.206(b) describe environmental requirements that must be 
satisfied as a prerequisite to construction under both the existing 
blanket authority and the expanded emergency blanket authority. FWS 
suggests that the Commission's certification authorization could 
incorporate an emergency action plan that would include surveying 
alternative routings. To a certain extent, we already do so in our NEPA 
consideration of alternatives to a proposed project. We agree with the 
principle that it is prudent to be prepared; however, since there is no 
way to predict if, when, or where damage might occur along the vast 
array of interstate gas facilities, we find it impractical to attempt 
to undertake an environmental inventory of possible alternative routing 
in advance of an actual incident. However, we agree with FWS that 
reconstruction efforts can be expedited by having relevant entities' 
contact information readily available, and to this end, we will 
compile, post, and update such information on our Web site.

Self-Implementation v. Prior Authorization

    45. As proposed, under the expanded emergency blanket authority, a 
pipeline can invoke the expanded blanket authority, inform the 
Commission of its intended emergency reconstruction activities, and 
unless the Commission objects, go forward. In the NOPR we asked whether 
affirmative Commission authorization or a short review period (e.g., 
three days) should be required before a pipeline would be permitted to 
act under emergency blanket authority.
    46. INGAA, Duke, Northern Natural, KM Pipelines, Williston Basin, 
and KO Transmission state that to be able to respond as rapidly a 
possible in an emergency, blanket authorization for construction 
outside of an existing right-of-way should be self-implementing. These 
parties see no need for the Commission to first verify that an 
emergency exists, and then approve a pipeline's proposed emergency 
response, before permitting a pipeline to act.
    47. INGAA believes that there is no cause for the Commission to 
assess a pipeline's reconstruction proposal for a period of time before 
breaking ground, because the Commission may rely on a representative on 
site to oversee repairs. Williston Basin agrees, and adds that the on-
site Commission representative, in conjunction with the advance report 
describing emergency activities, should provide the Commission with 
adequate information and oversight.
    48. Instead of granting pipelines self-implementing authority to 
undertake emergency repairs outside an existing right-of-way, FWS and 
the Ohio PUC propose the Commission should first declare that an 
emergency requiring immediate action exists, with the Commission's 
declaration serving as the trigger and authorization for emergency 
reconstruction activities. FWS recommends that the Commission have five 
calendar days from receiving notice of an emergency interruption in 
service to decide if circumstances merit rebuilding along a new right-
of-way.
    49. KO Transmission recommends allowing pipelines to commence 
reconstruction prior to contacting the Commission.\20\ If an emergency 
incident occurs when Commission offices are closed, KM Pipelines 
propose permitting a pipeline to go forward with construction, with a 
report describing its remedial action to be submitted when Commission 
offices reopen. Alternatively, KN Pipelines suggest the Commission 
provide for some means of filing a report on emergency reconstruction 
when its offices are closed.
---------------------------------------------------------------------------

    \20\ Specifically, KO Transmission suggests adding the 
qualification ``or currently underway,'' at the end of the proposed 
Sec.  157.207(i) requirement that pipelines submit reports 
``describing emergency activities to be undertaken;'' i.e., 
effectively eliminating reporting in advance of commencing 
reconstruction.
---------------------------------------------------------------------------

    50. Instead of submitting a prospective plan of reconstruction to 
the Commission, the Process Gas Consumers Group suggests the Commission 
designate a contact person with the authority to immediately approve or 
disapprove emergency reconstruction activities. In the event of 
disapproval, the company could then submit its plan to the Commission, 
with the Commission taking up to three days to review the plan and the 
rationale for initial disapproval by the designated staff member.
    51. NiSource does not object, in principle, to obtaining Commission 
confirmation that an emergency exists, as long as doing so does not 
delay the pipeline's response. To this end, NiSource suggests the 
Commission create a ``rapid response'' staff, capable of confirming 
that an emergency exists, assisting in formulating a plan to 
reconstitute service, and providing waivers as warranted--all within a 
24-to 36-hour time frame. NiSource contends that involving the 
Commission in this manner could preclude after-the-fact challenges to 
the pipeline's emergency actions.
    52. MidAmerican and the New York PSC endorse the proposal for prior 
notice to the Commission. The New York PSC believes it is prudent for 
the Commission to verify that the circumstances in fact constitute an 
actual emergency, and to assess the scope and impact of the proposed 
response. MidAmerican is concerned that if no-notice self-
implementation is permitted, pipelines might take the opportunity to 
upgrade, rather than merely replace or repair, their damaged 
facilities. MidAmerican adds that in view of the public interest in a 
rapid restoration of interrupted service, in no circumstances should 
the Commission's review of a pipeline's advance report filing take more 
than three days.

[[Page 31603]]

Commission Response

    53. In view of the comments, we will limit the revisions to our 
blanket certificate regulations to those proposed in the NOPR, and not 
require either Commission affirmation that emergency conditions exist 
or a time-out interval during which we review a pipeline's proposed 
emergency response. In effect, we will allow pipelines self-
implementing authority to act to immediately reconstitute service for 
the protection of life or health or for maintenance of physical 
property in an emergency due to a sudden unanticipated loss of natural 
gas or capacity. We retain the requirement that a pipeline submit an 
advance report of intended emergency reconstruction activities. In 
part, advance notice in an emergency serves the same purpose as the 
public notice requirement does for construction under a blanket 
certificate in a non-emergency in that it enables the Commission to 
confirm that the planned activities are consistent with environmental, 
safety, and land acquisition requirements. In addition, the Commission 
can consider whether the planned activities are narrowly tailored to 
restoring service as soon as possible and ensure that reconstruction 
will not include any system modifications that are not essential to 
alleviate threats to life, health, or property. Once an advance report 
is submitted, a company may proceed with its emergency reconstruction 
activities. Our consideration of the company's notice of planned 
reconstruction, and identification of any necessary modifications, will 
proceed concurrently with reconstruction activities.
    54. In an emergency, in the interests of safety and environmental 
protection, a company acts immediately to limit damage and stabilize 
its system, and the new advance report provision is unrelated to 
actions taken in the context of this initial emergency response. The 
new advance report provision only comes into play after a company has 
isolated damaged facilities, assessed the status of its system, and 
formed a plan for recovery. Because currently effective provisions 
already authorize companies to act in an emergency and are effectively 
self-implementing, asking a company to describe how it intends to 
restore interrupted service in no way inhibits companies' existing 
capability (and obligation) to respond promptly to threats to the 
integrity of their facilities.\21\ We have yet to encounter a situation 
whereby a company is prevented from immediately undertaking essential 
action in response to an emergency because Commission offices are 
closed. Hence, we do not anticipate a need to provide a means to 
present an advance report of planned reconstruction during non-business 
hours. However, if we find a delay in communicating with the Commission 
has inhibited urgently needed action, whether it be action pursuant to 
this expanded emergency blanket authority or in another time-critical 
context, we will seek a means to remedy any such delay and can do so in 
a way that supplements this rule.
---------------------------------------------------------------------------

    \21\ Given gas companies' existing authority to act to stabilize 
their system's facilities after a disruption in service, we expect 
the expanded blanket emergency authority will only be called upon in 
extreme and unambiguous emergency circumstances. Consequently, we do 
not expect companies to invoke blanket emergency authority unless it 
is the only regulatory option to restore service for the protection 
of life or health or for maintenance of physical property.
---------------------------------------------------------------------------

Range of Reconstruction Activities

    55. INGAA and Duke propose the Commission modify part 153 to 
specifically apply the emergency reconstruction provisions to import, 
export, and LNG terminal facilities. INGAA explains that because these 
facilities are subject exclusively to NGA Section 3, and not NGA 
Section 7, such facilities would be unaffected by the proposed 
expansion of the part 157 blanket certificate regulations.
    56. MidAmerican would have the Commission expand the scope of the 
proposed rule to include not only authority for a pipeline to rebuild 
its own damaged facilities, but also for a damaged pipeline to make use 
of undamaged (or less damaged) facilities of another pipeline in the 
same region, or where more efficient in terms of time and cost, 
undertake new construction on another pipeline system's facilities to 
provide additional capacity to meet its own customer needs.

Commission Response

    57. We strive to respond with dispatch when any portion of the 
energy infrastructure is damaged, including facilities subject 
exclusively to NGA Section 3. We have adopted and applied certain NGA 
Section 7 conditions governing construction, operation, and rates to 
ensure that NGA Section 3 facilities are in the public interest, and we 
will do so in this case to enable timely repairs in the event of damage 
to such facilities.\22\ To this end, we add Sec.  153.13, to state that 
``The provisions of subpart F of part 157 of this chapter that permit 
reconstruction for the purpose of immediately restoring interrupted 
service for the protection of life or health or for maintenance of 
physical property in an emergency due to a sudden unanticipated loss of 
gas supply or capacity are applicable to facilities subject to Section 
3 of the Natural Gas Act.''
---------------------------------------------------------------------------

    \22\ This ensures that in an emergency, LNG facilities that are 
subject exclusively to NGA Section 3, or subject exclusively to NGA 
Section 7, or subject to both sections, can employ the expanded 
emergency blanket provisions.
---------------------------------------------------------------------------

    58. We are not persuaded that there is a need for the Commission to 
coordinate multiple pipelines' cooperative response to an emergency, as 
MidAmerican proposes. We expect that the existing part 284, subpart I, 
regulations governing emergency gas sale, transportation, and exchange 
transactions, are adequate to enable one pipeline to rely on another to 
assist to respond to an emergency gas shortfall.\23\
---------------------------------------------------------------------------

    \23\ A gas disruption so severe and so sustained that remedial 
actions under the Commission's regulations prove unavailing, or 
conditions that cripple the Commission's or the industry's 
communication capabilities, would likely constitute a natural gas 
supply emergency, and trigger application of the Defense Production 
Act, 50 U.S.C. App. 2061, et seq., which provides for federal 
coordination and direction.
---------------------------------------------------------------------------

Declaration of an Emergency

    59. In the NOPR, we asked if expanded emergency blanket authority 
should be restricted, and apply only in response to emergencies due to 
natural disasters or deliberate damage. INGAA, AGA, Duke, Northern 
Natural, Process Gas Consumers Group, Shell Gas Transmission, NiSource, 
Williston Basin, the New York PSC, and KO Transmission maintain that 
regardless of the cause of a sudden unanticipated loss of gas or 
capacity, the effect is the same, namely, an urgent need to restore 
service. Accordingly, they ask that the Commission clarify that the 
proposed revisions will apply regardless of whether an emergency is the 
result of a natural disaster, equipment failure, human error, accident, 
or deliberate damage.
    60. MidAmerican would restrict the applicability of the expanded 
blanket authority to ``an emergency situation or act of deliberate 
damage.'' For reconstruction requiring a new right-of-way, FWS would 
restrict expanded blanket authority specifically to natural disasters 
and acts of deliberate damage.

Commission Response

    61. Comments convince us that it is appropriate to focus not on 
cause, but on effect. Consequently, we will not restrict the expanded 
blanket authority to emergencies attributable to deliberate damage. 
Besides, in the aftermath of an incident that interrupts service, it 
could prove counterproductive to have to first

[[Page 31604]]

establish, for example, whether it was a meteor or a missile that 
breached a gas line. Thus, regardless of the reason, in an emergency 
due to a sudden unanticipated loss of gas or capacity, when immediate 
action is required for the protection of life or health or for 
maintenance of physical property, the new emergency blanket regulations 
will apply.

Information Collection Statement

    62. The Office of Management and Budget (OMB) regulations require 
that OMB approve certain information collection requirements imposed by 
agency rule.\24\ This rule will not impact information collection. 
Accordingly, there is no cause to submit this rule to OMB for review 
under section 3507(d) of the Paperwork Reduction Act of 1995, 44 U.S.C. 
3507(d).
---------------------------------------------------------------------------

    \24\ 5 CFR part 1320 (2002).
---------------------------------------------------------------------------

Environmental Analysis

    63. The Commission is required to prepare an EA or EIS for any 
action that may have a significant adverse effect on the human 
environment.\25\ The Commission has categorically excluded certain 
actions from these requirements as not having a significant effect on 
the human environment.\26\ The actions herein fall within categorical 
exclusions in the Commission's regulations for rules that are 
clarifying, corrective, or procedural, for information gathering, 
analysis, and dissemination, and for sales, exchange, and 
transportation of natural gas that requires no construction of 
facilities.\27\ Therefore, an environmental assessment is unnecessary 
and has not been prepared in this rulemaking.
---------------------------------------------------------------------------

    \25\ Order No. 486, Regulations Implementing the National 
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & 
Regs. Regulations Preambles 1986-1990 ] 30,783 (1987).
    \26\ 18 CFR 380.4 (2002).
    \27\ See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), 
380.4(a)(27)(2002).
---------------------------------------------------------------------------

Regulatory Flexibility Act [Analysis or Certification]

    64. The Regulatory Flexibility Act of 1980 (RFA) \28\ requires 
agencies to prepare certain statements, descriptions, and analyses of 
proposed rules that will have significant economic impact on a 
substantial number of small entities. Agencies are not required to make 
such an analysis if a rule would not have such an effect. The 
Commission does not believe that this rule would have such an effect on 
small business entities, since the amendments to our regulations apply 
only to interstate pipelines, most of which are not small businesses. 
Accordingly, pursuant to section 605(b) of the RFA, the Commission 
certifies that this rule will not have a significant adverse impact on 
a substantial number of small entities.
---------------------------------------------------------------------------

    \28\ 5 U.S.C. 601-612.
---------------------------------------------------------------------------

Document Availability

    65. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through FERC's Home Page (http://www.ferc.gov) and in FERC's 
Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. 
Eastern time) at 888 First Street, NE., Room 2A, Washington, DC 20426.
    66. From FERC's Home Page on the Internet, this information is 
available in the Federal Energy Regulatory Records Information System 
(FERRIS). The full text of this document is available on FERRIS in PDF 
and WordPerfect format for viewing, printing, and/or downloading. To 
access this document in FERRIS, type the docket number excluding the 
last three digits of this document in the docket number field.
    67. User assistance is available for FERRIS and the FERC Web site 
during normal business hours by contacting FERC Online Support by e-
mail at [email protected] or by telephone at 866-208-3676 
(toll free) or TTY at 202-502-8659.

Effective Date and Congressional Notification

    68. These regulations are effective July 14, 2003.
    69. The Commission has determined, with the concurrence of the 
Administrator of the Office of Information and Regulatory Affairs of 
OMB, that this rule is not a ``major rule'' as defined in section 351 
of the Small Business Regulatory Enforcement Fairness Act of 1996.

List of Subjects

18 CFR Part 153

    Exports, Imports, Natural gas, Reporting and recordkeeping 
requirements.

18 CFR Part 157

    Administrative practice and procedure, Natural gas, Reporting and 
recordkeeping requirements.

18 CFR Part 375

    Authority delegations (Government agencies), Seals and insignia, 
Sunshine Act.

    By the Commission.
Magalie R. Salas,
Secretary.

0
In consideration of the foregoing, the Commission amends parts 153, 
157, and 375 of Chapter I, Title 18, Code of Federal Regulations, as 
follows.

PART 153--APPLICATIONS FOR AUTHORIZATION TO CONSTRUCT, OPERATE OR 
MODIFY FACILITIES USED FOR THE EXPORT OR IMPORT OF NATURAL GAS

0
1. The authority citation for part 153 continues to read as follows:

    Authority: 15 U.S.C. 717b, 717o; E.O. 10485, 3 CFR, 1949-1953 
Comp., p. 970, as amended by E.O. 12038, 3 CFR, 1978 Comp., p. 136, 
DOE Delegation Order No. 0204-112, 49 FR 6684 (February 22, 1984).


0
2. Section 153.13 is added, to read as follows:


Sec.  153.13  Emergency reconstruction.

    The provisions of subpart F of part 157 of this chapter that permit 
reconstruction for the purpose of immediately restoring interrupted 
service for the protection of life or health or for maintenance of 
physical property in an emergency due to a sudden unanticipated loss of 
gas supply or capacity are applicable to facilities subject to section 
3 of the Natural Gas Act.

PART 157--APPLICATIONS FOR CERTIFICATES OF PUBLIC CONVENIENCE AND 
NECESSITY AND FOR ORDERS PERMITTING AND APPROVING ABANDONMENT UNDER 
SECTION 7 OF THE NATURAL GAS ACT

0
1. The authority citation for part 157 continues to read as follows:

    Authority: 15 U.S.C. 717-717W, 3301-3432; 42 U.S.C. 7101-7352.


0
2. In Sec.  157.202, the last sentence in paragraph (b)(2)(i) and 
paragraph (b)(2)(ii)(C) are revised, and a new paragraph (b)(13) is 
added, to read as follows:


Sec.  157.202  Definitions.

* * * * *
    (b) Subpart F definitions. * * *
    (2)(i) * * * Replacements for the primary purpose of creating 
additional main line capacity are not eligible facilities; however, 
replacements and the modification of facilities to rearrange gas flows 
or increase compression for the primary purpose of restoring service in 
an emergency due to sudden unforseen damage to main line facilities are 
eligible facilities.
    (ii) Exclusions: * * *

[[Page 31605]]

    (C) A facility, including compression and looping, that alters the 
capacity of a main line, except replacement facilities and facility 
modifications covered under paragraph (b)(2)(i) of this section; * * *
* * * * *
    (13) Emergency means a sudden unanticipated loss of gas supply or 
capacity that requires an immediate restoration of interrupted service 
for protection of life or health or for maintenance of physical 
property.

0
3. In Sec.  157.203, paragraph (d)(1), insert the following sentence 
after the last full sentence ending ``the notice has been provided.'':


Sec.  157.203  Blanket certification.

* * * * *
    (d) Landowner notification.
    (1) * * * For activity required to restore service in an emergency, 
the 30-day prior notice period is satisfied in the event a company 
obtains all necessary easements. * * *
* * * * *

0
4. In Sec.  157.205, paragraph (a) introductory text is revised to read 
as follows:


Sec.  157.205  Notice procedure.

    (a) Applicability. No activity described in Sec. Sec.  157.208(b), 
157.211(a)(2), 157.214 or 157.216(b), except for activity required to 
restore service in an emergency, is authorized by a blanket certificate 
granted under this subpart, unless, prior to undertaking such activity:
* * * * *

0
5. In Sec.  157.207, the introductory text is revised to read as 
follows:


Sec.  157.207  General reporting requirements.

    On or before May 1, or each year, or in the case of emergency 
reconstruction activity, prior to any activity, the certificate holder 
must file, in the manner prescribed in Sec. Sec.  157.6(a) and 385.2011 
of this chapter, an annual report signed under oath by a senior 
official of the company, that lists for the previous calendar year:
* * * * *

0
6. In Sec.  157.208, paragraph (a) is revised to read as follows:


Sec.  157.208  Construction, acquisition, operation, replacement, and 
miscellaneous rearrangement of facilities.

    (a) Automatic authorization. If the project cost does not exceed 
the cost limitations set forth in column 1 of Table I, under paragraph 
(d) of this section, or if the project is required to restore service 
in an emergency, the certificate holder is authorized to make 
miscellaneous rearrangements of any facility, or acquire, construct, 
replace, or operate any eligible facility. The certificate holder shall 
not segment projects in order to meet the cost limitations set forth in 
column 1 of Table I.
* * * * *

PART 375--THE COMMISSION

0
7. The authority citation for part 375 continues to read as follows:

    Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717w, 3301-3432; 16 
U.S.C. 791-825r, 2601-2645; 42 U.S.C. 7101-7352.


0
8. Section 375.308 is amended as follows:
0
a. In paragraph (w)(3), the word ``and'' is removed;
0
b. In paragraph (w)(4), remove the period at the end of the sentence 
and add ``; and'' in its place;
0
c. Paragraph (w)(5) is added,
0
d. In paragraph (x)(5), the word ``and'' is removed;
0
e. In paragraph (x)(6), remove the period at the end of the sentence 
and add ``; and'' in its place; and
0
f. Paragraph (x)(7) is added to read as follows:


Sec.  375.308  Delegations to the Director of the Office of Energy 
Projects.

* * * * *
    (w) * * *
    (5) Requests for waiver of the landowner notification requirements 
in Sec.  157.203(d) of this chapter.
* * * * *
    (x) * * *
    (7) Take whatever steps are necessary to ensure the protection of 
all environmental resources during the construction or operation of 
natural gas facilities, including authority to design and implement 
additional or alternative measures and stop work authority.
* * * * *

[FR Doc. 03-13202 Filed 5-27-03; 8:45 am]
BILLING CODE 6717-01-P