[Federal Register Volume 77, Number 102 (Friday, May 25, 2012)]
[Notices]
[Pages 31302-31306]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-12737]


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OFFICE OF THE FEDERAL COORDINATOR FOR ALASKA NATURAL GAS TRANSPORTATION 
PROJECTS


Review of Federal Permit Conditions

AGENCY: Office of the Federal Coordinator for Alaska Natural Gas 
Transportation Projects.

ACTION: Notice of Adoption of Final Policy.

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SUMMARY: The Office of the Federal Coordinator for Alaska Natural Gas

[[Page 31303]]

Transportation Projects is adopting a final policy in order to 
implement its statutory responsibilities under the Alaska Natural Gas 
Pipeline Act (15 U.S.C. 720) with respect to federal permit conditions 
imposed on the gas pipeline project. This policy statement will 
establish the agency's procedures for determining whether certain 
conditions included in a certificate, right-of-way, permit, lease or 
other authorization for an Alaska natural gas transportation project by 
federal agencies are prohibited under the Alaska Natural Gas Pipeline 
Act.

DATES: Effective Date: This policy will be effective immediately upon 
publication.

FOR FURTHER INFORMATION CONTACT: Debra Dickson, Director of 
Administration, Office of the Federal Coordinator, Alaska Natural Gas 
Transportation Projects, [email protected], 202-756-4972.

SUPPLEMENTARY INFORMATION:

I. Background

    Congress enacted the Alaska Natural Gas Pipeline Act in 2004 (15 
U.S.C. 720) to encourage construction of a pipeline to deliver natural 
gas from Alaska's North Slope to the Lower 48 states. The Alaska 
Natural Gas Pipeline Act establishes a new process for approval and 
construction of the pipeline, either a project that completes the 
Alaska Natural Gas Transportation System that President Carter approved 
in 1977 pursuant to the Alaska Natural Gas Transportation Act of 1976 
(15 U.S.C. 719), or a different pipeline project under the Natural Gas 
Act. The Alaska Natural Gas Pipeline Act of 2004 created the Office of 
the Federal Coordinator for Alaska Natural Gas Transportation Projects 
and charged the Federal Coordinator, the agency head, with four primary 
responsibilities: (1) Coordinate the expeditious discharge of all 
activities by all federal agencies with respect to an Alaska natural 
gas pipeline; (2) Ensure that all federal agencies comply with the 
Alaska Natural Gas Pipeline Act; (3) Prohibit federal agencies from 
imposing permit conditions that would prevent or impair in any 
significant respect the expeditious construction and operation of the 
project unless the conditions are required by law; further, the act 
directs the Federal Coordinator to determine whether a term or 
condition would prevent or impair in any significant respect the 
expeditious construction and operation of the project; and (4) 
Participate with the state of Alaska in a joint construction 
surveillance and monitoring agreement.
    In addition, Congress transferred to the Federal Coordinator all of 
the responsibilities and authorities of the Federal Inspector under the 
Alaska Natural Gas Transportation Act of 1976. These responsibilities 
will be applicable if the Alaska Natural Gas Transportation System gas 
line is completed or if the 1980s' prebuilt sections of that project 
are expanded or modified within the United States to handle Alaska gas.
    This policy addresses the third of the four statutory requirements 
listed above by explaining how the Federal Coordinator will determine 
whether conditions that federal agencies intend to impose on permits, 
rights-of-way or other authorizations for an Alaska natural gas 
transportation project will prevent or impair in any significant 
respect the expeditious construction and operation of the project.
    Several sections of the Alaska Natural Gas Pipeline Act require the 
Federal Coordinator to consider permit conditions imposed by federal 
agencies with respect to the pipeline. Section 106(d)(2), Public Law 
108-324, 118 Stat. 1255 prohibits agencies from including certain 
conditions in permits and other approvals, it states:

    (2) PROHIBITION OF CERTAIN TERMS AND CONDITIONS--No Federal 
agency may include in any certificate, right-of-way, permit, lease, 
or other authorization issued to an Alaska natural gas 
transportation project any term or condition that may be permitted, 
but is not required, by any applicable law if the Federal 
Coordinator determines that the term or condition would prevent or 
impair in any significant respect the expeditious construction and 
operation, or an expansion, of the Alaska natural gas transportation 
project.

    Thus, the Alaska Natural Gas Pipeline Act of 2004 prohibits 
conditions that may be included but are not required by any applicable 
law if the Federal Coordinator determines that the condition would 
prevent or impair in any significant respect the expeditious 
construction and operation, or an expansion, of the Alaska natural gas 
transportation project. The Federal Coordinator's function with regard 
to some conditions is limited. The Alaska Natural Gas Pipeline Act, 
Division C, Section 106(d)(4), Public Law 108-324 denies the Federal 
Coordinator any authority to override the Federal Energy Regulatory 
Commission's implementation of open seasons for the project or the 
Commission's orders for expansion of the project under Section 105 of 
the Alaska Natural Gas Pipeline Act, or to add or impose any terms or 
conditions to the Federal Energy Regulatory Commission certificate or 
any agency's permit or other authorization for the project. Division C, 
Section 106(d)(4), Public Law 108-324 states:

    (4) LIMITATION--The Federal Coordinator shall not have authority 
to--
    (A) override--
    (i) the implementation or enforcement of regulations issued by 
the Commission under section 103; or
    (ii) an order by the Commission to expand the project under 
section 105; or
    (B) impose any terms, conditions, or requirements in addition to 
those imposed by the Commission or any agency with respect to 
construction and operation, or an expansion of, the project.

    The Alaska Natural Gas Pipeline Act also prohibits federal agencies 
from amending any previously issued permit or authorization to add 
conditions determined by the Federal Coordinator to prevent or impair 
in any significant respect the expeditious construction and operation 
of the pipeline.

    (3) PROHIBITION OF CERTAIN ACTIONS--Unless required by law, no 
Federal agency shall add to, amend, or abrogate any certificate, 
right-of-way, permit, lease, or other authorization issued to an 
Alaska natural gas transportation project if the Federal Coordinator 
determines that the action would prevent or impair in any 
significant respect the expeditious construction and operation, or 
an expansion, of the Alaska natural gas transportation project. 
ANGPA Sec.  106(d)(3).

    The prohibition of permit conditions that would prevent or impair 
expeditious construction and operation does not apply to conditions 
adopted by state agencies, even those issued pursuant to programs 
encouraged or funded by the federal government. However, if a state-
issued permit includes a condition which is incorporated into a federal 
permit by a federal agency, the Federal Coordinator may review the 
condition that the federal agency adopted. Any determination the 
Federal Coordinator makes would not affect the state condition, just 
the applicability of the federal permit condition.

II. Discussion of the Final Policy

    The Office of the Federal Coordinator is implementing these 
provisions of the Alaska Natural Gas Pipeline Act of 2004 by policy, 
establishing the process by which the Federal Coordinator will exercise 
its responsibility to determine whether permit conditions would prevent 
or impair expeditious construction of the project. This policy will 
apply to the agency's review of conditions initially included in an 
authorization for an Alaska natural gas transportation project, as well 
as any renewal or reissuance of authorizations.

[[Page 31304]]

    One commenter suggested that the policy include a statement of the 
legal authority on which it is based. We have expanded the introduction 
to the policy to include this information.

A. Intention To Work With Other Agencies

    It is the Federal Coordinator's intention to work closely with 
other federal agencies before, during and after the National 
Environmental Policy Act process and during the permit application 
review process of each agency in order to identify the likely need for 
permit conditions early and to determine as soon as possible whether a 
particular permit condition would be consistent with the Alaska Natural 
Gas Pipeline Act's statutory prohibition. The Office of the Federal 
Coordinator for Alaska Natural Gas Transportation Projects expects that 
through coordination with other federal agencies and the permit 
applicant, it should be able to resolve concerns about most terms and 
conditions early and either avoid a formal review process or conclude 
it expeditiously.

B. Definitions

    (1) Condition: The agency proposes to define term or condition of 
the Alaska Natural Gas Pipeline Act, Section 106(d) (2), Pub. L. 108-
324, 118 Stat. 1255--referred to in this policy as condition--to mean 
any obligation not proposed by the applicant but proposed to be added 
to the permit or authorization by a federal agency. That includes all 
terms, stipulations or conditions required by the agency and any other 
requirement imposed by a federal agency. It excludes any obligation 
included by the applicant in its application, even if the obligation is 
suggested by an agency.
    One commenter suggested that Federal Coordinator should not exclude 
from its review terms or conditions suggested by or agreed to by the 
project applicant, stating that the project applicant may not have the 
same interest as the United States in expeditious completion of the gas 
pipeline. The Office of the Federal Coordinator believes it is highly 
unlikely that an applicant will not want expeditious construction of 
the project. Besides, if the applicant and an agency mutually agree on 
a particular term or condition, and that term or condition is part of 
the application, it could not be considered as imposed by an agency on 
a project authorization. The Office of the Federal Coordinator's review 
only relates to permit conditions imposed by federal agencies.
    (2) Authorization: The Federal Coordinator is defining the term 
authorization to mean any certificate, right-of-way, permit, lease, 
approval or other authorization required in order to construct or 
operate an Alaska natural gas transportation project, but excludes 
permissions for useful, but not required authorizations. Accordingly, 
federal loan guarantees, licenses for communications equipment not 
necessary for the project and other such permissions would not be 
subject to Federal Coordinator review.
    One commenter believed the proposed policy was too narrow because 
it used the term ``permit'' to include any permit, right-of-way or 
other authorization. It was the Office of the Federal Coordinator's 
intention to include any kind of authorization in its review, not only 
permits. To clarify this, we are changing the policy to define the term 
``authorization'' and defining that term to encompass any permit, 
right-of-way, lease or other authorization required for an Alaska 
natural gas transportation project.
    One commenter suggested that authorizations which would assist but 
are not essential for an Alaska natural gas transportation project 
should nonetheless be subject to review. The Federal Coordinator 
disagrees. Congress granted the Federal Coordinator limited authority 
to review permit conditions that might prevent or delay expeditious 
construction and operation of the project. If an authorization is not 
required for the project, any condition imposed on that authorization 
is unlikely to prevent or delay expeditious construction or operation 
of the project.
    (3) Alaska Natural Gas Transportation Project: The agency does not 
intend to propose a definition of Alaska natural gas transportation 
project, as that term is defined in the Alaska Natural Gas Pipeline 
Act, Section 102 of Pub. L. 108-324, 118 Stat. 1255. It is important to 
note that the definition includes the entire system, not simply the 
pipeline. Therefore, this permit review policy will cover conditions 
addressing support facilities, compressor stations, the gas treatment 
plant and other parts of the project.
    (4) Prevent or Impair in Any Significant Respect the Expeditious 
Construction and Operation of the Project: As discussed in the 
proposal, the agency did not define ``prevent or impair in any 
significant respect the expeditious construction and operation of the 
project'' because the agency believes this should be interpreted based 
on the circumstances of the project at the time of an agency's action, 
the agency's intention and justification in crafting the proposed 
condition, and the condition's effect on the project. Prevent or impair 
in any significant respect cannot be well defined in the absence of 
specific circumstances. As an example, a condition that causes a 
significant delay in the first in-service date contractually agreed to 
between the pipeline owner and/or operator and a shipper could, if 
extreme, be deemed to impair expeditious construction and operation of 
the project. However, such a determination could only be made if the 
contractual in-service date were reasonable in light of the complexity 
of the project and other circumstances.

C. Process for Review of Permit Conditions

    The Federal Coordinator does not intend to review every condition 
on every permit. Rather, the agency will generally review permit 
conditions at the request of the applicant or permittee. In addition, 
the Office of the Federal Coordinator reserves the right to select 
conditions for review on its own initiative. When the permitting 
agency's practice or regulations allow that agency or the Office of the 
Federal Coordinator to share a draft permit condition with an 
applicant, the Office of the Federal Coordinator will work with the 
applicant and the agency as early as possible to identify problematic 
permit conditions. An applicant may request review of a permit 
condition by the Office of the Federal Coordinator prior to issuance if 
the applicant believes it may prevent or impair in any significant 
respect the expeditious construction and operation of the project. If 
the practice of the permitting agency does not allow draft permit 
conditions to be shared with an applicant, the permittee will have to 
wait to request review of a permit condition until after the permit is 
issued.
    One commenter suggested that the policy include a procedure for 
federal agencies other than the Federal Coordinator to request a review 
of proposed conditions before issuing a project authorization. The 
Federal Coordinator has not adopted this suggestion. The Office of the 
Federal Coordinator will work with other agencies during the permitting 
process. If an agency chooses to share possible permit conditions with 
the Office of the Federal Coordinator in advance of issuing its permit, 
the office will provide guidance on how to avoid problems. It is not 
the Federal Coordinator's intention to provide a formal review before 
issuance. However, if an early formal determination is sought, the 
Federal Coordinator will make every effort to provide effective 
guidance to an agency.

[[Page 31305]]

    Requests from the applicant or the permittee for review of permit 
conditions should specify what specific condition will prevent or 
impair expeditious construction and operation of the project and should 
explain why the condition will have a detrimental impact on the 
project.

D. Information Required for Review

    The Office of the Federal Coordinator will need background 
information from the agency in order to conduct its review, including:
    (1) The language of the specific condition.
    (2) A citation to the legal requirement for the condition.
    (3) Any analysis the agency has prepared of the cost of 
implementing the condition.
    (4) Any other information that explains the agency's reasons to 
include the condition, especially the circumstances that require its 
inclusion. This should include any discussion of the benefits of the 
conditions, or a cost-benefit analysis if one has been prepared.
    (5) If the permit has not been issued, a statement addressing 
whether it is permissible under the agency's practice to share the 
draft condition with the applicant.
    The Office of the Federal Coordinator expects this information 
should be readily available from the agency and will not impose a 
burden on the agency, as the agency should have already documented the 
need for the condition as part of the administrative record. 
Accordingly, the Office of the Federal Coordinator anticipates that the 
agency will be able to provide this information within ten (10) 
calendar days of Office of the Federal Coordinator's notification of a 
review and request for additional information.
    One commenter suggested that the Federal Coordinator reserve the 
right to deny an application for review due to a lack of adequate 
information, if it is frivolous, or for any other cause. If the request 
for review is incomplete, does not demonstrate merit or otherwise does 
not provide a basis for relief, the Federal Coordinator does not need 
supplemental reasons for denying relief.
    Based on Office of the Federal Coordinator's review of the proposed 
condition, the Federal Coordinator will determine whether the condition 
would prevent or impair in any significant respect the expeditious 
construction and operation of the project. In most cases, the Office of 
the Federal Coordinator's review should be completed in less than 
thirty (30) days after a project applicant requests a review. The 
Federal Coordinator will provide notice of its decision and reasoning 
to the applicant and the agency. If the Federal Coordinator determines 
that the condition or proposed condition would prevent or impair in any 
significant respect the expeditious construction and operation of the 
project, the Office of the Federal Coordinator will facilitate a 
meeting between the permittee or applicant and the issuing agency and, 
if appropriate, other experts, in order to help resolve the issue.
    A commenter suggested including a statement to the effect that the 
permit condition review policy was intended to reduce litigation and 
that it did not create any legal rights. The Office of the Federal 
Coordinator disagrees with such an addition to this policy. If the 
Federal Coordinator determines that a permit condition will prevent or 
impair expeditious construction of the project, that determination 
creates the right for the applicant to seek a judicial ruling that the 
condition is unenforceable if it is not required by law. Accordingly, 
the Federal Coordinator will not adopt this suggestion.

III. Final Policy for Review of Federal Permit Conditions for an Alaska 
Natural Gas Transportation Project

    The purpose of this policy is to explain how the Office of the 
Federal Coordinator will exercise its responsibilities with respect to 
review of permit conditions under Section 106(d) of the Alaska Natural 
Gas Pipeline Act (15 U.S.C. 720(d)(d)). Section 106(a) of the Alaska 
Natural Gas Pipeline Act (15 U.S.C. 720(d)(a)) established the Office 
of the Federal Coordinator as an independent office in the executive 
branch. The Federal Coordinator also exercises authorities under the 
Alaska Natural Gas Transportation Act (15 U.S.C. 719), and this policy 
is adopted in order to implement those responsibilities as well. This 
policy applies to the issuance of initial permits, as well as the 
renewal or reissuance of permits for an Alaska natural gas 
transportation project.
    It is the Federal Coordinator's intention to work closely with 
other federal agencies before, during and after the National 
Environmental Policy Act process for an Alaska natural gas pipeline 
project and also during the permit application review process of each 
agency in order to identify early the likely need for permit conditions 
and to determine as soon as possible whether a particular permit 
condition would be precluded by the Alaska Natural Gas Pipeline Act's 
statutory prohibition. The Federal Coordinator expects that through 
coordination with other federal agencies and the permit applicant, it 
should be able to resolve concerns about most terms and conditions 
early on and either avoid a formal review process or conclude it 
expeditiously.

1. Definitions

    (a) Term or condition in Section 106(d)(2) of the Alaska Natural 
Gas Pipeline Act--referred to in this policy as condition--means any 
obligation not proposed by the applicant but proposed to be added to 
the permit or authorization by a federal agency. This includes all 
terms, stipulations, conditions or additions to the application and any 
other requirement imposed by an agency. It excludes any obligation 
included by the applicant in its application, even if the obligation is 
suggested by an agency.
    (b) Authorization means certificate, right-of-way, permit, lease or 
any other authorization required in order to construct or operate an 
Alaska natural gas transportation project.

2. Review of Proposed Terms or Conditions

(a) Review of Permit Conditions by Request of Applicant
    (1) An applicant for any authorization or a permittee for any 
authorization for an Alaska natural gas transportation project may 
request the Federal Coordinator to review any condition included in or 
proposed for inclusion in the authorization.
    (2) Such requests must be made to the Federal Coordinator no later 
than 30 days after issuance.
    (3) The request shall include a specific identification of each 
condition which the applicant or permittee believes is inconsistent 
with the Alaska Natural Gas Pipeline Act and an explanation of the 
basis of that belief, including information that supports the 
contention that the permit condition would prevent or impair in any 
significant respect the expeditious construction and operation of the 
project.
    (4) The Federal Coordinator may review a permit condition even if 
the permittee has not requested review.
(b) Materials Necessary for Review
    If the Federal Coordinator receives a request for review of any 
condition, the Federal Coordinator will notify the issuing agency of 
the request. The Federal Coordinator will need the following 
information from the agency:
    (1) The language of the specific condition.

[[Page 31306]]

    (2) A citation to the legal requirement for the condition.
    (3) Any analysis the agency has prepared of the cost of 
implementing the condition.
    (4) Any other information that explains the agency's reasons to 
include the condition, especially the circumstances that require its 
inclusion. This should include any discussion of the benefits of the 
conditions, or a cost-benefit analysis if one has been prepared.
    (5) If the permit has not yet been issued, a statement addressing 
whether agency practice or regulations would allow the Office of the 
Federal Coordinator to discuss the proposed condition with the 
applicant.
(c) Permit Condition Review
    In determining whether a proposed permit condition would prevent or 
impair expeditious construction and operation of the project, the 
Federal Coordinator will consider:
    (1) Any delays in project construction and operation caused by the 
condition.
    (2) All other available information, including, if available, the 
project's cost of meeting the condition.
    (3) The statutory and regulatory basis for the condition, as 
provided by the issuing agency.
    (4) The views of the applicant.
(d) The Federal Coordinator Will Endeavor To Complete Its Review Within 
30 Days After a Request From an Applicant or Permittee
(e) The Federal Coordinator's Decision
    (1) The Federal Coordinator will determine whether the proposed 
condition would prevent or impair in any significant respect the 
expeditious construction and operation of an Alaska natural gas 
transportation project or expansion of that project. The Federal 
Coordinator's decision will be sent to the agency and the applicant or 
permittee.
    (2) If the Federal Coordinator determines that the condition or 
proposed condition would prevent or impair in any significant respect 
the expeditious construction and operation of the project, the Federal 
Coordinator will facilitate a meeting between the permittee or 
applicant and the issuing agency and, if appropriate, other experts, in 
order to help resolve the issue.

    Dated: May 18, 2012.
Larry Persily,
Federal Coordinator.
[FR Doc. 2012-12737 Filed 5-24-12; 8:45 am]
BILLING CODE 6820-TP-P