Alliance operates an approximately 2300-mile network of oil and natural gas pipelines in the United States and Canada. In 2011, Alliance began plans to construct a 79-mile-long underground pipeline from a natural gas processing plant near Tioga, North Dakota, to an interconnection with Alliance’s main pipeline near Sherwood, North Dakota. There was at that time (and there continues to be) an oil boom in North Dakota, and occasionally oil prospectors would find reservoirs containing both petroleum and natural gas. The oil companies, having no pipeline capacity to ship the gas to major markets, would burn the gas at the source—a practice called “flaring.” Alliance sought to take advantage of this market inefficiency by shipping the otherwise wasted gas east to Chicago.
Anyone who wishes to construct a natural gas pipeline in the United States must first obtain a certificate of public convenience and necessity from FERC, the federal agency responsible for supervising and coordinating the production of energy in the United States. See 15 U.S.C. § 717f(c)-(e). Such a certificate also gives the recipient the authority to condemn land along the route of its pipeline under the power of eminent domain. See 15 U.S.C. § 717f(h). Alliance applied to FERC for a certificate of public convenience and necessity on January 25, 2012. FERC published notice of Alliance’s application in the Federal Register on February 7, 2012.
Judge(s): Roger Wollman
Jurisdiction: U.S. Court of Appeals, Eighth Circuit
Related Categories: Property
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