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Case number 24-1199, Sierra Club and Public Citizen Petitioners versus Federal Energy Regulatory Commission.

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Ms.

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McCreary for the petitioners, Mr. Fish for the respondent, Mr. Marwell for the respondent interviewees.

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Good morning.

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Good morning.

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May it please the court, Rebecca McCreary on behalf of Petitioners Sierra Club and Public Citizen,

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This case is a challenge to FERC's approval of the saguaro connector pipeline under section three of the Natural Gas Act.

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FERC has jurisdiction under section three of the Natural Gas Act for facilities exporting natural gas from the United States to a foreign country, as well as jurisdiction over interstate pipelines under section seven of the Natural Gas Act.

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I'd like to discuss three points today.

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First,

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FERC violated section three of the Natural Gas Act because the entirety of the 157-mile pipeline is a facility to be used for export.

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Second, if these are two distinct facilities, the commission improperly concluded that the connector pipeline was not a section seven pipeline.

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And third, FERC violated NEPA because it improperly limited its alternatives analysis and its indirect effects analyses.

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Before I dive in, I'd like to provide a little bit of context.

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This project is a 157 mile, 48 inch pipeline designed solely for transporting all of the gas that it will carry.

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It will start at the Waha Hub with no interconnections in Texas before it reaches the international border, where it will connect to a proposed pipeline in Mexico and ultimately transport gas to a proposed liquefied natural gas on the west coast there.

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This is one single pipeline within the United States, yet the commission is only claiming jurisdiction over the 1,000 feet at the border.

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We think this is a legal error.

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I'd like to first start with FERC Section 3 jurisdiction.

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The question here is whether or not the Natural Gas Act prohibits FERC from exercising its jurisdiction beyond roughly that 1,000 feet at the border.

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Nothing in the Natural Gas Act, FERC's own implementing regulations of the Natural Gas Act, or the Department of Energy's delegation to FERC authorizes the approach that's taken here.

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This all stems from

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The need for a Section 3 license to export.

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Yes, Your Honor.

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You don't think export has some connotation of what happens at the border?

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Or FERC couldn't view it that way?

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I believe that in the language used in the Natural Gas Act and in FERC's regulation and in DOE's delegation, they're dividing the word facility that comes with the term export.

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So section three of the Natural Gas Act, pretty limited language, it just says no person shall export any natural gas from the US.

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But FERC's regulations require section three authorization for those applying to site, construct, or operate quote facilities which are to be used for export.

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But the delegation order from the Department of Energy gives FERC authority over three different things.

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The ability to approve or disapprove of the construction and operation of particular facilities

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the site at which those facilities will be located.

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And when new facilities for export are to be constructed, the place of exit for export.

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So those are two specific things, the place of exit and- East site and the place of export.

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To me that has some connotation of the point at or near the border and there's obviously

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gray area, about is it a thousand feet?

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Is it the high water mark of the Rio Grande or the low water mark?

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But we're talking about at or near the border, not what happens a hundred miles upstream.

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They couldn't view it that way?

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Well, Your Honor, FERC has long interpreted this Department of Energy delegation as the

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giving FERC jurisdiction over the siting and the operation of the facilities necessary to accomplish an export.

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And just that 1,000 feet is not the only part of the facility that's necessary for export.

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The gas cannot get from the Waja Hub to the border without the entirety of the pipeline.

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This pipeline's 157 miles long, but FERC is viewing it just as this 1,000 foot project.

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Despite nothing in the record,

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Showing any rationale for that limitation aside from we've done it in the past and This is why I mean speaking of that though.

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I think first started doing this in in 1989 Almost without exception.

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They've got the zigzag case across the Canadian border, but putting that aside For 30 years until Big Bend comes along And even in Big Bend, it wasn't raised until it was too late

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Why did it take 30 years to discover this very significant legal error?

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Your honor, I believe that the determination here is a fact specific one.

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There are certain projects where if you look at I think Valley Crossing in South Texas, where there are other uses for the gas that's being transported there.

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That was another instance where there was a pipeline crossing the international border in South Texas.

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It had other uses.

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It wasn't transporting all of the gas contained for export.

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There were other interconnects along the way, and that could be the case for other projects that have applied the same standard.

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Do you agree?

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I think intervener said, uh, your position in this case would upset years of precedent and billions of dollars of investment.

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Your honor, I believe that

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it would give a clear criteria for what counts as the export, the facilities necessary for export.

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And for certain projects, if there is no other use aside from exporting everything within it, I believe that is all an export facility.

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But for projects where they are branching off with interconnects to supply gas to say a small West Texas town or other uses for it along the route, that would be another fact specific decision there.

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And

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Here, all the gases for export.

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And I'm not good at geography, but if you have this same pipeline, but it's double its length or whatever it takes.

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So it actually starts in Oklahoma and it goes Oklahoma across the border and to Texas, but just directly to this export facility.

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So all it does is take gas from Oklahoma to this export facility.

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And I take it your position is the entire pipeline from Oklahoma to this export facility should be treated as the section three facility.

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Is that correct?

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Your honor.

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Yes.

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In that instance, if there's no other, if they're going to build a pipeline that long for those uses, because section three is for the export of gas, but that's under the assumption that there are another, no other interconnects or

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That was my hypothetical, that's all it is.

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And so your position would be the same, no matter how long this pipeline is, if it's from Canada, crosses the border there, comes all the way down the United States to this facility here, you're gonna call the, assuming this is not, that's all it's doing is straight in and out, you want that whole thing to be subject to section three.

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Your honor, I believe that would be similar.

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Approval.

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I'm sorry, approval, section three, that's the section three review or jurisdiction by FERC, correct?

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Your honor, I believe that that could be a combination of section seven.

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No, why?

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You said it's an export facility.

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All it's doing, it's an export facility.

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I don't understand why it's any different.

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Take out Canada, so say it starts in Minnesota.

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I don't know where there's gas, but Minnesota, whatever, comes all the way down.

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And all it does, one pipeline all the way down to Mexico.

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You said for Oklahoma, across Texas, it's just all export facility.

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Yes, Your Honor.

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I'm just making it longer.

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Does it change at some point?

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I do not believe so, Your Honor.

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Okay, so then you can't say, you can't throw Section 7 in here right now.

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Yes.

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That just seems like a really bad idea because you know how Section 3 reviews are.

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There's a presumption

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that they get approved.

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Absent showing of adverse public interest.

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I mean, it is a strong presumption.

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It is much less, much more pro the pipeline or the export facility, much less demanding scrutiny and paperwork and showings than you have under section seven, correct?

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My two hypotheticals are definitely interstate, but those things would not be subject to Section 7 regulation at all because they would all, under your theory, they would all be treated as the export facility.

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That's your position?

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No, Your Honor, I believe that... You just told me that was your position under my two hypotheticals.

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I believe I misspoke and got a little turned around.

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I believe that

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In a hypothetical like that, at a certain point, a line would be drawn on what is necessary for export.

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But here... Wait, how would you do it under my hypothetical thing?

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I've got my gas here, I make so much more money if I export it to Mexico.

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It's all going straight there.

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I don't understand what your line is.

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I know your line, you want it to be more than the... I'm sorry, it was 1,000 or 1,400 feet here.

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But what is your test?

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What is the test that we, FERC, whoever, are supposed to apply to decide when it stops being the export facility and starts being an interstate pipeline or something else?

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What is your test?

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Your Honor, I believe the test would be something similar to what was applied in the Alaska gas line.

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I know that was an LNG case.

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But the term facility there was defined as gas that was transported for export

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and was not subject to Section 7 jurisdiction.

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It would be a similar test.

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Well, then you should have given a different answer to me about Oklahoma and Minnesota.

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I believe I misspoke, Your Honor.

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I apologize.

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So now essentially what you want is a rule that says if it's coming from an intrastate pipeline.

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And we have issues about that.

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But assume it qualifies as an intrastate pipeline.

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And all they're doing is taking Texas gas from wherever in Texas straight down to the border.

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Then it's the whole pipeline.

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Yes, your honor.

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But if it crosses the state line, but it's doing the exact same thing, it's just an inch into Oklahoma, it's no longer an export facility.

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Yes, your honor.

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And the rationale for that, I mean, I know you say that's what you want, but I'm still understanding what in the statutory text or precedent or anything would allow this type requires FERC to draw the line that you want rather than the one they drew.

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Your honor, I believe that would be very similar to the pipelines that attach to say, liquefied natural gas terminals and supply gas to those as well, where some part of the project is section seven and some part is section three.

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But the facilities that are just for the export, so that have no other purposes that are not going, those would be section three.

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But you just said that's not the test you want.

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I mean, that was your first answer that if they're just for export,

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but you're saying if it crosses a state line but it's still just for export, that's not the test.

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This is why I'm really confused because I should think that Sierra Club would, I don't mean to speak to your client, would prefer section seven regulation to section three.

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Yes, Your Honor, I believe that.

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And so how far out you wanna draw the, I mean, and we don't just go, well, I like that more than that.

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There needs to be some, for us at least, some sort of legal basis for saying that FERC had to,

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define the export facility longer than it did in this case?

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And your answer is, well, let's look at LNG.

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And we say if it's just for export there through the LNG terminal, that's good enough.

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But then you don't like that answer here.

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So I still don't know what your test is.

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Your Honor, I may be talking back some of what I previously said.

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I got a little turned around.

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But I believe that the test would be the facilities necessary.

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And then when it crosses state lines, it is interstate.

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So your test is just interstate things.

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If it's interstate, the whole darn thing is.

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And if it's interstate, how much is?

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Pardon?

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If it's interstate, how much is the export facility?

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And how much is subject to the section seven facility?

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The facilities that are now like the language you can have to include some of this pipeline in Texas so that you're crossing state lines.

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How far.

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What's the test.

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Usually there's additional infrastructure in those locations where you could draw a line such as compressor stations or meter stations or something like that.

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In this instance there's I understand they're all exclusively for export.

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I don't understand why that makes a difference.

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If you just want a rule that says if it's just an interstate pipeline, then the whole darn thing has to be part of the export facility.

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But if it's an interstate one that happens to be, let's imagine the interstate one here is right starts, it's in Texas, but it's right at the border.

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But if you add another foot, so it's in Oklahoma, then we have a whole different test for the export facility.

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I think that's what you're telling me.

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Yes, Your Honor.

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And I don't understand the legal basis for that.

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Here is the fact that,

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Nothing in the natural gas act nor in first regulations Specific to the natural gas act give them authority to divide it into two separate project We're just talking about the portion at the border and I know that there are instances where they could fully You're the one that wants to divide it into section 7 and section 3 if it crosses a state line Yes, your honor that's I just why can't sorry do you have Why can't FERC?

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take seriously third possibility, which is state regulation.

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This thing won't be unregulated.

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There's a railroad commission of Texas, which on Ferksview will handle this.

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And the interstate, the section seven part of this takes that seriously and crossing a state line is very significant.

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And if it crosses a state line,

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interstate and for controls it but if it's within just within texas the state gets to control it and that's the scheme why can't they sort of to just think of it the same way in the export context what's crossing the border is first business and what's inside this pollions inside the state of texas is the railroad commissions business your honor i believe that just

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a coherent standard of review for a single project.

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So how FERC looks at the environmental harms of a project, how FERC notifies landowners, how FERC assesses environmental harms is different than what the Railroad Commission does.

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So breaking a project into two gives two different forms of environmental review, public notice, and the like.

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But here, FERC has failed to coherently- I mean, it breaks projects according to

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And that's, you know, maybe not a modern way of thinking about it, but this is a pre-1937 scheme.

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That's the way things were set up then.

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Well, one of the issues here, Your Honor, is that FERC has failed to coherently explain the legal framework that it's applying here.

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It offered one explanation in the authorization order of the saguaro project.

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and now offers a differing explanation before this court in briefing.

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And both of which, like we've discussed earlier, there's past actions where FERC has extended its Section 3 jurisdiction.

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So FERC's authorization order originally takes the position that FERC could never assert jurisdiction beyond that 1,000 feet at the border.

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and now says that this jurisdictional approach is something they're able to do under the terms and conditions that they're able to set.

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But as we discussed earlier, FERC has extended its jurisdiction for export pipelines, such as in San Diego Gas and Electric, and as in those Section 3 LNG cases.

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And the question is whether or not FERC needs to engage in a fact-specific determination on whether or not an individual border crossing pipeline is

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more like those LNG cases where it's attached or San Diego, but nothing in the record provides a coherent standard for FERC's position.

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And FERC's decision here rests on this error and we believe it's appropriate to remand for FERC to decide whether to exercise authority that they denied that they had.

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So.

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You're pretty sharply distinguishing between this threshold question of authority

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and whether FERC should exercise it or not.

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I mean, can't we just sort of look at what they've done over 30 years, as Judge Walker says.

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They have a nod to federalism concerns.

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I mean, it's pretty clear whether you call it a lack of authority or a declination

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deciding not to exercise authority.

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That's what they've been doing.

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That's what they're going to do.

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Your honor, we just believe that FERC needs to explain the rationale it's using and why it's deciding to separate this project into different projects.

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Moving on to... What your position is, if this had been from Oklahoma, it would have been perfectly appropriate and maybe even required for FERC to have severed off the export facility and then treated 155 miles under Section 7, because my hypothetical is that interstate.

[00:19:02] Speaker 05:
Is that right?

[00:19:03] Speaker 01:
Yes, ma'am.

[00:19:04] Speaker 05:
Okay.

[00:19:05] Speaker 05:
So you don't have any problem with dividing the thing up?

[00:19:09] Speaker 02:
Not whenever the same agency is viewing the project as a whole.

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They can look completely, it's very, very different regulatory regimes under section three and section seven.

[00:19:18] Speaker 05:
So your whole argument I think is just we don't, you can't, it's perfectly rational to make the division that was made here as long as we also get section seven jurisdiction.

[00:19:31] Speaker 05:
But if instead we're left with interstate pipeline, Texas jurisdiction, it's no longer rational and they need to have more explanation.

[00:19:39] Speaker 05:
Yes, Your Honor.

[00:19:42] Speaker 02:
I know I'm over time, but is it all right if I move to second?

[00:19:45] Speaker 05:
Did you want to have another point you wanted to address?

[00:19:47] Speaker 02:
I was going to address Section 7 and NEPA, but you would like me to save my time?

[00:19:52] Speaker 07:
Just give me 30 seconds.

[00:19:54] Speaker 07:
On Section 7, give me 30 seconds why this is controlled by Big Bend.

[00:20:00] Speaker 07:
I mean, you know, intrastate goes up about 100 miles.

[00:20:05] Speaker 07:
The company says we're going to, the upstream connection will be to an intrastate pipeline.

[00:20:13] Speaker 07:
They have in-state sources.

[00:20:17] Speaker 07:
Maybe there's some question about getting 311 authorizations in the future, and we said that's fine.

[00:20:24] Speaker 07:
Uh, your honor intrastate, not section seven.

[00:20:28] Speaker 02:
Yes.

[00:20:28] Speaker 02:
Um, your honor in big bend, uh, one of the factors was the fact that pipeline ended near the Waja hub versus at the Waja hub, which is a source of interstate gas.

[00:20:37] Speaker 02:
Uh, they also noted, uh, mentioned the fact that there was abundant gas that they could supply into the Trans-Pecos pipeline, which is the pipeline in big bend here.

[00:20:45] Speaker 02:
They've identified the one pipeline they're going to connect to for sure is the Westex pipeline, which we have identified gets

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Interstate gas.

[00:20:53] Speaker 02:
We raise that in our rehearing order and in comments that the Westex system, which the Westex pipeline connects to, gets gas from other states as well.

[00:21:02] Speaker 02:
And we believe that the commingling of gas makes this pipeline interstate.

[00:21:06] Speaker 02:
And I will third.

[00:21:08] Speaker 05:
Just one more question.

[00:21:11] Speaker 05:
Were there any answers you were not able to give to our questions today that you would have been able to give if we were in sealed session, closed session?

[00:21:19] Speaker 05:
Thank you.

[00:21:35] Speaker 04:
Good morning, your honors.

[00:21:36] Speaker 04:
May it please the court, Jared Fish, for the Federal Energy Regulatory Commission.

[00:21:40] Speaker 04:
I'd like to start by making a few points on section three, move to section seven, and answer any other questions about any other topics the panel has.

[00:21:48] Speaker 04:
The commission reasonably found that it has jurisdiction only over the border facility at the United States-Mexico border.

[00:21:57] Speaker 04:
That determination is rooted in statutory text, it's rooted in the commission's regulations, in the Department of Energy's delegation order,

[00:22:04] Speaker 04:
And as you noted, Judge Walker, at least 30 years of precedent.

[00:22:09] Speaker 07:
Is that something we would assess for reasonableness, post-Loper-Brite?

[00:22:19] Speaker 07:
It seems like there's a legal question.

[00:22:20] Speaker 07:
You either have jurisdiction or you don't.

[00:22:22] Speaker 04:
Correct.

[00:22:23] Speaker 04:
I think it is a legal question that this court should decide in the first instance.

[00:22:29] Speaker 04:
Denovo.

[00:22:30] Speaker 04:
Yes.

[00:22:30] Speaker 04:
Yes.

[00:22:31] Speaker 05:
So beginning with the statutory tax as you want to get something more specific and that is how did you define how big the how much was the export facility here.

[00:22:43] Speaker 05:
It doesn't seem to be a consistent amount in cases.

[00:22:46] Speaker 05:
It seems to vary a fair amount.

[00:22:49] Speaker 04:
Sometimes it varies a bit.

[00:22:51] Speaker 04:
We're talking about a few dozen feet here or there, 1,047 feet or 1,000 feet or 950 feet, with two exceptions, the intercity case for Minnesota and the San Diego gas case.

[00:23:05] Speaker 05:
So how do you decide how much it is?

[00:23:07] Speaker 05:
It looks to me like you just took what Saguaro said.

[00:23:12] Speaker 05:
You just took their number.

[00:23:15] Speaker 04:
Same thing in Big Ben.

[00:23:16] Speaker 04:
We need to draw an administrative line somewhere, Judge Millett.

[00:23:19] Speaker 05:
We need to draw a reasoned line as to how much is the export facility.

[00:23:25] Speaker 05:
If you can tell me what test it is that FERC uses to define how much of it is export facility.

[00:23:34] Speaker 05:
I get the thing that's connecting to Mexico, but you've got to have some test for that.

[00:23:39] Speaker 05:
I didn't see it in the decision.

[00:23:41] Speaker 05:
If I missed it, please tell me.

[00:23:42] Speaker 05:
I haven't seen any of the decisions.

[00:23:44] Speaker 05:
It seems to me that FERC just takes whatever the applicant is proposing as a definition, but I'm sure that wouldn't be what FERC is doing.

[00:23:52] Speaker 05:
I'm sure you've got a better answer than that.

[00:23:54] Speaker 04:
I have two responses, Judge Millett.

[00:23:55] Speaker 04:
First, as concerns this case, all Sierra Club is arguing the only issue in dispute

[00:24:00] Speaker 04:
is whether we were required to assert jurisdiction over the entire 157-mile pipeline.

[00:24:06] Speaker 04:
They don't quibble with how we drew 1,000 feet, whether it should have been 1,500 feet or 950 feet.

[00:24:11] Speaker 04:
They want all or nothing.

[00:24:12] Speaker 05:
Well, I think they'd be a lot happier if it had been 80 miles, split the difference.

[00:24:17] Speaker 04:
Well, that's not what they argue.

[00:24:18] Speaker 04:
They argue it had to be the whole day.

[00:24:20] Speaker 05:
I'm just asking you how you all make the decision.

[00:24:22] Speaker 05:
Or do you make, does FERC make an independent reasoned decision?

[00:24:25] Speaker 05:
Does it have some test it applies to see, define how much is the export facility?

[00:24:30] Speaker 04:
The test that we use, and this is not directly responsible, the test that we use is our precedent going back for 30 years.

[00:24:39] Speaker 04:
And I think it's important.

[00:24:40] Speaker 05:
What is that test?

[00:24:40] Speaker 05:
Please tell me what that test is.

[00:24:42] Speaker 04:
The test is something close to the border.

[00:24:45] Speaker 04:
I mean, when we're talking about section three, it can't be zero.

[00:24:48] Speaker 04:
because there's some distance that a facility takes up at the border.

[00:24:53] Speaker 04:
But the statute, our regulations, the DOE's delegation order, doesn't give us any principle basis or criteria to use to determine what that length is.

[00:25:02] Speaker 04:
So we've had to draw what is admittedly an administrative line, which generally, when we don't have any criteria to go on from a governing statute or regulation, we get great deference in drawing an administrative line.

[00:25:15] Speaker 05:
Do you have to make a reasoned decision?

[00:25:17] Speaker 05:
And by the way, they did quibble with where the line was drawn.

[00:25:19] Speaker 05:
It's in their brief.

[00:25:21] Speaker 05:
So tell me, you get discretion, and you may have expertise in this area.

[00:25:28] Speaker 05:
So what's a test?

[00:25:29] Speaker 04:
The test is our precedent.

[00:25:32] Speaker 05:
That's not telling me that our precedent is not a test.

[00:25:34] Speaker 05:
Precedent may apply a test.

[00:25:37] Speaker 05:
And maybe there's something structural here.

[00:25:40] Speaker 05:
I don't know.

[00:25:42] Speaker 05:
a building that's the export facility, is there a particular change in the piping, or do you just sort of, does this 1,000 foot just sort of in the middle of a pipe somewhere say, now we're an export facility and the rest of it is interstate?

[00:25:57] Speaker 04:
Right, I understand the frustration, Judge Millett, and I did inquire as to whether there is anything in the record that might elucidate whether there is a physical piece of equipment at 1,000 feet that could constitute a marker.

[00:26:12] Speaker 04:
Perhaps council for Saguaro, which is which is building the project might have a more specific answer.

[00:26:20] Speaker 05:
But we've sort of an undifferentiated pipeline that some point presumably is sort of right on the border connects with a Mexican pipeline.

[00:26:27] Speaker 05:
Correct.

[00:26:28] Speaker 05:
I had a vision of a building.

[00:26:30] Speaker 05:
Not even a building.

[00:26:31] Speaker 05:
So you're just randomly dividing up the pipeline.

[00:26:36] Speaker 04:
I don't think it's random, Judge Millett.

[00:26:37] Speaker 04:
I would say 1,000 feet is about 0.2 miles and 0.2 miles is a rough

[00:26:45] Speaker 04:
a rough approximation of what a facility might occupy, say, an LNG terminal or liquefaction facility.

[00:26:53] Speaker 05:
Did FERC say that somewhere?

[00:26:54] Speaker 04:
No.

[00:26:55] Speaker 04:
You're saying that.

[00:26:56] Speaker 04:
I'm saying that.

[00:26:57] Speaker 04:
But I think it's also important to recognize here, our line drawing here hasn't been challenged in 30 years.

[00:27:05] Speaker 05:
It is.

[00:27:06] Speaker 05:
It's challenged in this case.

[00:27:08] Speaker 07:
Yes.

[00:27:11] Speaker 07:
In the LNG context, there's a big, a whole facility, and you can point to it, and it's near the border.

[00:27:19] Speaker 07:
Is there anything here like that?

[00:27:23] Speaker 07:
Do you need a meter station, maybe, or anything associated with crossing the border?

[00:27:33] Speaker 07:
Or is it, as Judge Millett said, is it just that the pipe just continues from the US under the river

[00:27:41] Speaker 07:
over the border, and it's one pipe, and it eventually is in Mexico.

[00:27:46] Speaker 04:
Here it's one pipe, and eventually it's in Mexico.

[00:27:49] Speaker 04:
But when we're talking about onshore facilities that actually have to liquefy natural gas to prepare it for send-off and export by vessel, there is a very clearly demarcated physical infrastructure.

[00:28:04] Speaker 07:
So the 1,000 foot, it's not

[00:28:07] Speaker 07:
roughly the edge of the river, it's just a nice round number.

[00:28:12] Speaker 07:
Nice round and small number.

[00:28:14] Speaker 04:
And to that point, Judge Katz, I think it would be more... 1093 wasn't all that round in Big Bend.

[00:28:19] Speaker 05:
I'm curious why that was 93 feet longer.

[00:28:22] Speaker 04:
That's true, Your Honor.

[00:28:25] Speaker 05:
I think in this case where we are just drawing... What's the longest you've done?

[00:28:29] Speaker 05:
for one of these, you said it's an export facility.

[00:28:32] Speaker 04:
I think the inner-city Minnesota case, but that's really the exception.

[00:28:36] Speaker 05:
How long was it there?

[00:28:37] Speaker 04:
It was several miles.

[00:28:39] Speaker 04:
By the time you looked at weaving in and out of Minnesota, it was several miles.

[00:28:42] Speaker 04:
I think it was 2.1 miles in San Diego.

[00:28:45] Speaker 04:
But I think those are the exceptions that really prove the point.

[00:28:49] Speaker 05:
I don't understand what point you're proving.

[00:28:51] Speaker 05:
So some places, I mean, the in and out one is a little

[00:28:55] Speaker 05:
Potentially different, but two miles in San Diego, 1,093 in Big Bend, 1,000 here.

[00:29:01] Speaker 05:
Is the only difference what the petitioner asked for, applicant asked for?

[00:29:06] Speaker 05:
Not the petitioner in the afternoon.

[00:29:07] Speaker 04:
I can only say that it's consistent with what the petitioner asked for here.

[00:29:11] Speaker 04:
And I think it would be arbitrary for us to choose, say, 1,012 feet or 1,050 feet in a case where we have to draw an administrative line without criteria governing it.

[00:29:20] Speaker 08:
I thought you said a few minutes ago that

[00:29:24] Speaker 08:
you draw a line that's close to the border.

[00:29:29] Speaker 08:
Now, close is not the most precise test imaginable.

[00:29:34] Speaker 08:
But I mean, it is as close as a standard of sorts.

[00:29:40] Speaker 08:
1,000 feet, close.

[00:29:42] Speaker 08:
500 miles, not close.

[00:29:45] Speaker 04:
Right, Your Honor.

[00:29:46] Speaker 04:
And I think when we're looking at it's certainly much farther away.

[00:29:53] Speaker 05:
It wasn't San Diego.

[00:29:54] Speaker 05:
in San Diego, but, you know, there, I mean, if you imagine that at a thousand feet, we're doing that because at 2000 feet, there's wetlands or there's homes that are going to have to get bulldozed.

[00:30:12] Speaker 05:
There's going to be a lot more consequences to recognizing that as within our jurisdiction.

[00:30:18] Speaker 05:
That would be problematic, wouldn't it?

[00:30:21] Speaker 05:
Sometimes it's two miles, but if it's going to cause too many regulatory issues, we'll make it 1,000 feet.

[00:30:28] Speaker 05:
It seems very troubling that FERC doesn't apparently have any tests for how much is the export facility.

[00:30:35] Speaker 05:
That's where all the gravamen of your argument is, export facility, section three, rest we're going to sever off, but we're supposed to accept that argument without any understanding of how you all define what the export facility is in any reasoned and consistent manner.

[00:30:56] Speaker 04:
Well, I would push back that we've been inconsistent.

[00:30:59] Speaker 04:
I think the fact that there are two exceptions, only two exceptions.

[00:31:01] Speaker 05:
You call them exceptions.

[00:31:03] Speaker 05:
I don't know.

[00:31:03] Speaker 04:
Well, only two instances.

[00:31:04] Speaker 05:
Why were they exceptions?

[00:31:07] Speaker 05:
Is there a reason that it was two miles?

[00:31:09] Speaker 05:
Do they explain why that was longer there?

[00:31:11] Speaker 04:
Well, in San Diego, the whole length of that pipeline was two miles.

[00:31:17] Speaker 04:
So you can see that FERC might be more willing to extend its jurisdiction over the full two mile length of that pipeline.

[00:31:23] Speaker 04:
rather than a 155 mile pipeline.

[00:31:26] Speaker 04:
In Minnesota, the concern was that there would be no state jurisdiction.

[00:31:30] Speaker 05:
I don't even understand that rationale.

[00:31:32] Speaker 05:
If it's short and not going to cause any difficulties, we'll do the whole thing.

[00:31:37] Speaker 05:
But if it's going to cause problems, we'll make it so short it doesn't cause problems.

[00:31:41] Speaker 04:
or we're going to act consistent with what we've decided before.

[00:31:45] Speaker 04:
I think it's important to remember here, section three doesn't require us to assert jurisdiction over border facilities at all.

[00:31:53] Speaker 04:
All section 3A says is we get to approve, well DOE now gets to approve exports, and FERC and DOE may apply reasonable terms and conditions.

[00:32:04] Speaker 04:
And this court in 1974 in district gas said, it took a pretty broad view of what terms and conditions means,

[00:32:10] Speaker 04:
And it said, okay, terms and conditions is broad enough to encompass facilities that are used for export.

[00:32:18] Speaker 04:
But that case itself involved an onshore LNG terminal, a self-contained facility.

[00:32:27] Speaker 07:
Can I ask you about LNG?

[00:32:30] Speaker 07:
Do I have it right?

[00:32:32] Speaker 07:
In the context of LNG, exporting LNG,

[00:32:37] Speaker 07:
Would FERC take the position that a 100-mile pipeline, wholly within a state, leading to an LNG terminal, is part of the export facility?

[00:32:51] Speaker 04:
Yes, and we have.

[00:32:51] Speaker 04:
In Alaska Gas Line, there's a very good reason for that.

[00:32:55] Speaker 07:
Is there a difference in pipelines that lead into an LNG terminal?

[00:33:00] Speaker 04:
There's a difference in the statute, and this is the critical point.

[00:33:04] Speaker 04:
LNG terminals are governed by Section 3E.

[00:33:08] Speaker 07:
Right, which says the pipeline, it's excluded if it's subject to Section 7 jurisdiction.

[00:33:17] Speaker 04:
It says that, but it also says that our authority over LNG terminals covers all natural gas facilities located onshore or in state waters that are used to transport natural gas.

[00:33:30] Speaker 04:
That's where we get our authority to regulate pipelines that are part of an LNG terminal that could be up to 800 miles long, as in Alaska gas line.

[00:33:40] Speaker 04:
The point here is Congress.

[00:33:41] Speaker 05:
The point here is facilities used for export.

[00:33:46] Speaker 07:
I'm sorry, go ahead.

[00:33:47] Speaker 07:
No.

[00:33:48] Speaker 07:
through that provision or by negative implication of the pipeline exclusion, at least if the mechanism of export is LNG, it seems like the 100-mile long intrastate pipeline

[00:34:08] Speaker 07:
is part of the export facility.

[00:34:11] Speaker 04:
Because Congress expressly said so in Section 3E, and the Court of course presumes that where Congress includes language in one provision but omits it in another, that relative inclusion... The critical distinct language for you is... Is the fact that Section 3A, which we all agree we're under here, only says that we get to apply terms and conditions to exports, whereas Congress was explicit in Section 3E

[00:34:34] Speaker 04:
that we may assert jurisdiction over pipelines that deliver gas to LNG terminals.

[00:34:40] Speaker 05:
Terms and conditions?

[00:34:44] Speaker 05:
Your position is that a term and condition includes some portion of the pipeline.

[00:34:51] Speaker 05:
That's what your position in this case?

[00:34:53] Speaker 05:
For 30 years, you have spread that language to say it includes some portion of the pipeline used

[00:35:01] Speaker 05:
for transportation of gas for export.

[00:35:04] Speaker 04:
Some portion.

[00:35:06] Speaker 05:
You have the authority to cover some portion.

[00:35:09] Speaker 05:
Is there anything in the statutory language that says that has to be a different length of pipeline than we use for LNG?

[00:35:18] Speaker 04:
Yes, because in Section 717, which is Section 1 of the Natural Gas Act, Congress spoke specifically to our jurisdiction over pipelines.

[00:35:28] Speaker 04:
And Congress said, we regulate only interstate pipelines, and we regulate no other pipelines.

[00:35:34] Speaker 04:
We don't regulate pipelines located wholly within one state.

[00:35:38] Speaker 04:
And so if we were to interpret Section 3... Unless it's transporting LNG.

[00:35:43] Speaker 04:
Unless it's transporting LNG, but we're not in that provision.

[00:35:45] Speaker 05:
I understand you're not, but I'm trying to understand how you read the language in 3A to let you regulate up to two miles of pipeline, but no more.

[00:36:01] Speaker 05:
You definitely get to regulate the pipeline carrying the gas for export under 3A, correct?

[00:36:08] Speaker 05:
For some length.

[00:36:09] Speaker 05:
for some length, because this corn district has said so.

[00:36:14] Speaker 05:
Were we making it up, or were we interpreting the statute?

[00:36:16] Speaker 03:
You're interpreting the statute.

[00:36:17] Speaker 05:
Thank you.

[00:36:18] Speaker 05:
All right, so you get to regulate the pipeline delivering gas for export, some length of it.

[00:36:25] Speaker 05:
And there's nothing in 3A, comparing the language to 3E, that says it has to be close to the border.

[00:36:35] Speaker 04:
Well, I think, Your Honor,

[00:36:37] Speaker 05:
Or two miles is OK, but five miles is not.

[00:36:43] Speaker 05:
That's why I was asking you what FERC's test is.

[00:36:45] Speaker 04:
Right.

[00:36:45] Speaker 04:
I understand.

[00:36:46] Speaker 04:
If I could come at this from a different angle, the courts read the statutes as a whole.

[00:36:52] Speaker 04:
Congress spoke specifically to our regulation of pipelines in Section 717, and it said we don't get to regulate intrastate pipelines.

[00:37:00] Speaker 04:
So if we were to interpret Section 3A, which uses a vague, ambiguous term like terms and conditions,

[00:37:09] Speaker 04:
to completely eviscerate that line in section 717 that says we don't get to regulate- You wouldn't be completely eviscerating it.

[00:37:15] Speaker 05:
You would be applying it to only those pipelines that are used for export within the state.

[00:37:22] Speaker 05:
That's not evisceration there any more than it is for LNG pipelines.

[00:37:26] Speaker 05:
It doesn't eviscerate it to do it for two miles.

[00:37:30] Speaker 05:
Would it eviscerate it to do it for five miles?

[00:37:32] Speaker 04:
Judge Millett, what is the limiting principle?

[00:37:34] Speaker 05:
Would it eviscerate it to do-

[00:37:36] Speaker 05:
Your position is it doesn't eviscerate that protection to regulate him for two miles.

[00:37:40] Speaker 05:
That's the commission's position.

[00:37:42] Speaker 05:
Yes?

[00:37:44] Speaker 04:
That's what we decided in San Diego.

[00:37:46] Speaker 05:
Is that your position?

[00:37:48] Speaker 04:
That's not my position in this case.

[00:37:50] Speaker 04:
That hasn't been our position in virtually every case.

[00:37:52] Speaker 04:
I don't know that the issue.

[00:37:53] Speaker 05:
Are you disavowing?

[00:37:54] Speaker 05:
Oh, has the commission sort of confessed error and said that was wrong to do two miles there?

[00:37:59] Speaker 04:
I'm not confessing error.

[00:38:00] Speaker 05:
No, so that's still your precedent.

[00:38:02] Speaker 05:
And I'm just telling on what basis.

[00:38:05] Speaker 05:
You can't say that 3A says we can't regulate pipelines at all.

[00:38:09] Speaker 05:
If you had, if Ferkin said, read that to say, oh, we can't do anything,

[00:38:14] Speaker 05:
maybe the connection pipeline to Mexico or whatever joint or something goes in there to connect the two, maybe that we can regulate because that's the actual export point.

[00:38:25] Speaker 05:
But your whole point, you said there's some big textual distinction here and yet that textual distinction does not exclude regulation of a portion of an interstate pipeline.

[00:38:37] Speaker 04:
Correct?

[00:38:37] Speaker 04:
That's correct because when it comes to

[00:38:40] Speaker 04:
looking at what terms and conditions are, tend into exports, the action of allowing exports.

[00:38:46] Speaker 05:
But the whole thing is for export.

[00:38:48] Speaker 05:
That's why it doesn't make, I wish FERC had a test, and then we could say they have expertise or something, but if the entire thing is one pipeline, and there's no meters, there's no facilities, there's no buildings, all you've got is a connection to Mexico, I guess, at some point, Mexican pipeline at some point.

[00:39:07] Speaker 05:
then there seems to be, and I see nothing in the statutory text that is answering this question that says two miles is okay, or even 1,000 feet is okay, but three miles isn't.

[00:39:20] Speaker 05:
Four miles isn't, that would be totally blowing up this interstate pipeline exception.

[00:39:26] Speaker 05:
You're regulating interstate pipeline, intrastate pipeline in this very case, just not the whole thing.

[00:39:32] Speaker 04:
Right, because this court has drawn a balance between our authority over exports under section 3A and Congress's reservation of authority to states over intrastate pipelines.

[00:39:42] Speaker 05:
And I think- Where did we say the balance is 1,000 feet?

[00:39:46] Speaker 04:
The court didn't say the balance is a thousand feet, but the language of the statute confers upon us discretion to draw administrative lines and a thousand feet is a lot more.

[00:39:56] Speaker 05:
I'm asking.

[00:39:58] Speaker 05:
Okay.

[00:39:58] Speaker 05:
All right.

[00:39:58] Speaker 05:
I'm beating dead horse here.

[00:39:59] Speaker 05:
The problem is you don't seem to have any reason explanation for how you draw the line, how much in trust state pipeline it's perfectly fine for us to regulate under three a.

[00:40:12] Speaker 04:
And my best response, Judge Millett, is besides two exceptions, we have consistently drawn- It's nice to call them exceptions after the fact.

[00:40:21] Speaker 05:
Did you call them exceptions at the time?

[00:40:24] Speaker 05:
Did you say there was something exceptional about it?

[00:40:27] Speaker 04:
No.

[00:40:27] Speaker 04:
I don't believe.

[00:40:28] Speaker 04:
Well, yes.

[00:40:29] Speaker 04:
In Intercity, we did.

[00:40:30] Speaker 04:
We did.

[00:40:31] Speaker 04:
We said that that was a unique.

[00:40:33] Speaker 04:
We used the word unique.

[00:40:34] Speaker 04:
Well, the Canada one.

[00:40:34] Speaker 04:
Yes.

[00:40:35] Speaker 04:
Unique?

[00:40:35] Speaker 04:
Yes.

[00:40:35] Speaker 05:
And also- So I'm putting that aside.

[00:40:36] Speaker 04:
That's why I'm talking about the San Diego one.

[00:40:39] Speaker 04:
But we also said that there would be no state jurisdiction there.

[00:40:42] Speaker 04:
In San Diego, I think that case actually supports our ultimate determination here that we can't regulate, I know this isn't precisely your question, but we can't regulate the entire connector pipeline or even several miles because we disclaimed jurisdiction over the to-be-constructed intrastate pipeline to which that 2.1 mile spur segment interconnected.

[00:41:06] Speaker 04:
So I think the fact that we said in one case, okay, two miles.

[00:41:09] Speaker 05:
Right, there's an interconnection there.

[00:41:10] Speaker 05:
That's a break point.

[00:41:11] Speaker 05:
You don't have that here.

[00:41:14] Speaker 04:
That, well, not that I'm aware of, that there's a break point.

[00:41:18] Speaker 08:
The break point- How many times have you done it at about 1,000 feet?

[00:41:23] Speaker 04:
Many times.

[00:41:25] Speaker 04:
Dating back to Michigan Consolidated Gas in 1989, where we said we only get to regulate facilities that are close to the border, perhaps before then.

[00:41:37] Speaker 05:
But in the Valley Crossing case- So the reason given there was, was it 1,000 feet there?

[00:41:42] Speaker 04:
I don't know that we specified, I'm not sure if it was exactly 1,000 feet.

[00:41:47] Speaker 05:
This is a weird thing, right, because it's always a different length.

[00:41:50] Speaker 05:
If you were just like either a physical facility, right, if you have a new interconnection or building or a meter or something, and otherwise we'll do 1,000 feet, that would be consistency.

[00:42:04] Speaker 05:
I understand.

[00:42:05] Speaker 05:
And we've... As I looked at them, it could be you have access a lot more than I do.

[00:42:10] Speaker 05:
It wasn't the same number all the time.

[00:42:12] Speaker 05:
That's the thing that struck me as quite odd.

[00:42:14] Speaker 04:
It wasn't the same number all the time.

[00:42:16] Speaker 04:
That's correct.

[00:42:16] Speaker 04:
And here we chose our own number.

[00:42:18] Speaker 04:
I see that I'm out of time.

[00:42:20] Speaker 05:
I'm happy to address... On the Section 7 issue... I'm sorry, do you guys have more on this?

[00:42:26] Speaker 05:
On the Section 7 issue,

[00:42:31] Speaker 05:
It seems to me that it's very unclear that they've got, this is unlike Big Bend, because there's no finding that there's sufficient intrastate Texas gas to fill the capacity of this.

[00:42:52] Speaker 05:
They talk about, here's eight other facilities

[00:42:57] Speaker 05:
But they don't say that those have available capacity.

[00:42:59] Speaker 05:
Normally what FERC says is there's evidence that those have available capacity.

[00:43:03] Speaker 05:
Maybe you got a contract but you don't have that.

[00:43:05] Speaker 05:
There's evidence those have available capacity.

[00:43:07] Speaker 05:
Was there any evidence that there was available capacity to fill or come close to filling?

[00:43:14] Speaker 05:
this pipeline.

[00:43:15] Speaker 04:
Yes.

[00:43:15] Speaker 04:
So are those representations that it was proposing to build a header system that would this is J. A. Three ninety eight that would aggregate the gas from those eight upstream sources and those eight upstream sources could supply five billion cubic feet.

[00:43:34] Speaker 05:
Oh those eight.

[00:43:35] Speaker 05:
may well have the capacity to provide that amount of gas.

[00:43:40] Speaker 05:
Is there any evidence to think that gas is not already contracted to other pipelines?

[00:43:45] Speaker 05:
That's not show that that's available for us to pick up to get what they have to show gas that's not being shipped that we will pick up.

[00:43:54] Speaker 04:
I don't know of any any case or for a president that requires that showing what what is required is a showing that all eight of them were already contracted to other facilities.

[00:44:03] Speaker 05:
Would this be a reason decision by for there's sufficient capacity available.

[00:44:07] Speaker 04:
If there, well first of all, the test with respect for section seven, determining whether the pipeline is section seven jurisdiction or not, is whether it's only going to transport non-NGA jurisdictional gas, not how much of that gas it's actually going to transport.

[00:44:21] Speaker 05:
And also we're on substantial- Is that your four part, is that how your four part test reads?

[00:44:28] Speaker 05:
Whether there are- What's the third prong of your four part test?

[00:44:31] Speaker 04:
whether there are ample sources of intrastate gas.

[00:44:35] Speaker 05:
Ample sources.

[00:44:36] Speaker 05:
Is ample sources more than 27% of a very wide diameter pipeline?

[00:44:41] Speaker 04:
Well, I'd say, first of all, there's no minimum volume that needs to be satisfied upon commencing service for an intrastate pipeline.

[00:44:54] Speaker 04:
That's never been the inquiry.

[00:44:56] Speaker 05:
And second, Wait, you have to show

[00:45:00] Speaker 05:
You've got an incredibly wide diameter pipeline here that says it's going to take only interstate gas down to the border.

[00:45:11] Speaker 05:
That's what it's designed to do.

[00:45:13] Speaker 05:
And yet there's no evidence in the record that there's available gas, and this is on a particular route, this pipeline, that there is available Texas gas

[00:45:25] Speaker 05:
to fill 50% of this pipeline?

[00:45:27] Speaker 05:
60%, 70%, is that correct?

[00:45:30] Speaker 04:
I don't think that's right, Your Honor.

[00:45:32] Speaker 04:
First, we're on this.

[00:45:32] Speaker 05:
Why is just identifying a source of gas without showing that it's available for them?

[00:45:37] Speaker 05:
That's shippers there that need this pipeline, or need some pipeline to ship with.

[00:45:45] Speaker 05:
You said if those eight are fully contracted out already, would that be a recent decision?

[00:45:53] Speaker 05:
Would that satisfy the third prong?

[00:45:55] Speaker 04:
If there were no capacity or no volume available to serve the pipeline, and there was evidence of that, then perhaps.

[00:46:03] Speaker 04:
But again, first, we're on a substantial evidence standard.

[00:46:05] Speaker 04:
The question is whether there's more than 16 tola.

[00:46:07] Speaker 05:
Substantial evidence means that there is some available capacity for this pipeline to use that is intrastate.

[00:46:17] Speaker 05:
And 27%?

[00:46:20] Speaker 05:
is sufficient.

[00:46:22] Speaker 05:
That's how I read the third part of your test, because the third part of your test is let's make sure that this is really going to be transporting intrastate gas, which means you've got to show that more than a quarter of this pipeline is going to be filled with intrastate gas.

[00:46:40] Speaker 04:
Well, first of all, Saguaro has made representations that they are going to transport intrastate gas.

[00:46:45] Speaker 04:
And they can make that representation.

[00:46:46] Speaker 05:
They make representations.

[00:46:47] Speaker 05:
What's the evidence?

[00:46:49] Speaker 05:
A representation is not evidence.

[00:46:51] Speaker 04:
We've treated those representations as evidence.

[00:46:54] Speaker 04:
And they're binding.

[00:46:55] Speaker 04:
They're binding on Saguaro.

[00:46:57] Speaker 04:
First, Saguaro is an affiliate of Westex.

[00:46:59] Speaker 04:
They have the same parent company.

[00:47:01] Speaker 04:
They can determine what.

[00:47:02] Speaker 05:
But Westex is the source of the 27%.

[00:47:05] Speaker 05:
It's these other eight companies.

[00:47:08] Speaker 05:
that they're not affiliated with, they haven't claimed they have contracts with?

[00:47:13] Speaker 04:
Well, there's something I could say in the SEAL portion that would inform that a bit.

[00:47:19] Speaker 04:
But if Saguaro were not actually going to transport intrastate gas on commencement of service,

[00:47:30] Speaker 04:
We would know that.

[00:47:31] Speaker 04:
There are ways for us to enforce that representation.

[00:47:37] Speaker 04:
Pipelines that carry section 311 gas need to file form 549D with the commission.

[00:47:44] Speaker 04:
Those forms identify the receipt and delivery points of all gas, including interstate transported gas on those section 311 pipelines.

[00:47:52] Speaker 04:
So if Saguaro upon commencing service isn't transporting any gas,

[00:47:57] Speaker 05:
No, no, they'll do 27 percent interstate and then the rest full capacity or 80 or 90 percent capacity is going to be interstate.

[00:48:06] Speaker 05:
What happens then?

[00:48:07] Speaker 04:
Well, no.

[00:48:09] Speaker 04:
If it was interstate, then we would probably bring an enforcement action, because that would be breaking its representation.

[00:48:15] Speaker 05:
I said it's going to happen.

[00:48:16] Speaker 05:
Let's assume they got their 27%.

[00:48:18] Speaker 05:
Right.

[00:48:19] Speaker 05:
And then it's easier for me to say 73%, but if you don't want to say 100% capacity, whatever.

[00:48:25] Speaker 05:
Ratchet it down a bit.

[00:48:26] Speaker 05:
But if the rest of it turns out to be interstate, what happens?

[00:48:31] Speaker 04:
Well, if it eventually turns out to be interstate after Saguaro has already secured section 311 authorization to carry, and I want to be careful.

[00:48:39] Speaker 05:
Well, you're telling me the form here to get 311 authorization.

[00:48:43] Speaker 05:
If it turns out that initially, all right, so for the first day, they trickle out their 27%.

[00:48:49] Speaker 05:
The first week, they trickle out their 27% and they go, yeah, we're losing massive amounts of money here.

[00:48:54] Speaker 05:
And so from here on out, so initially, they did their 27%.

[00:48:59] Speaker 05:
But then they don't have any more interstate gas because it turns out that's already obligated somewhere else, shipping somewhere else.

[00:49:07] Speaker 05:
So then after that, they do 73% or whatever lower percentage you want.

[00:49:12] Speaker 05:
Everything else they do after that is interstate.

[00:49:16] Speaker 05:
And that's the record they present you and say, hey, we'd love a little 311 authorization here.

[00:49:20] Speaker 05:
What happens?

[00:49:21] Speaker 04:
So I have a couple of responses to that.

[00:49:23] Speaker 04:
First, as far as the statute is concerned, that's not a problem.

[00:49:26] Speaker 04:
There is no requirement that an intrastate pipeline upon commencing service fill its pipeline or have no intention of transporting NGA jurisdictional gas in the future.

[00:49:38] Speaker 04:
That is just fine.

[00:49:39] Speaker 04:
The only requirement is that the pipeline establish itself as an intrastate pipeline, i.e.

[00:49:44] Speaker 04:
transport only non-jurisdictional gas.

[00:49:47] Speaker 04:
It doesn't matter if it's 10% of the capacity, 50% or 100%,

[00:49:51] Speaker 04:
The only requirement is that it's not FERC jurisdictional, and to determine that, the only question the court has to answer is whether all of that gas is non-NGA jurisdictional itself upon commencing service.

[00:50:03] Speaker 04:
But there is no, there's nothing in our precedent, in the statute, or this court's cases that require a pipeline.

[00:50:09] Speaker 05:
And then you just give a 311 certificate after that.

[00:50:12] Speaker 04:
And, you know, I'm not going to presume what the commission would do, but there's, that is consistently, this is a very different argument that we got in Big Bend from FERC.

[00:50:21] Speaker 05:
which was that they monitor this, if it turns out to be a ruse, that in fact this thing is really an interstate one, it's just got a little ticker of interstate, that there can be a show cause order, that they could then regulate it under section seven, they could oppose NEPA requirements.

[00:50:39] Speaker 05:
This is a very different argument than we got from FERC in the Big Ben case.

[00:50:44] Speaker 05:
which wasn't like, hey, as long as they do it for a week, that's all fine.

[00:50:48] Speaker 05:
And they are out of section seven altogether, even though after the first week of operation, everything they're doing is interstate gas.

[00:50:57] Speaker 04:
Well, your honor, that would be something that we would look at upon Saguaro's, if they were to application for section 311.

[00:51:04] Speaker 05:
You just said it's fine.

[00:51:05] Speaker 05:
The statute says it's fine.

[00:51:07] Speaker 04:
Right.

[00:51:07] Speaker 04:
There's nothing in the statute that, well, there's nothing in the statute that says,

[00:51:11] Speaker 04:
A pipeline is not an intrastate pipeline that avoids our jurisdiction if at some point in the future, a week, a month, whatever, it actually intends to transport interstate gas.

[00:51:23] Speaker 04:
It's a different question on whether we would approve a Section 311 application if it turns out that we find, we discover that Saguaro was just building this pipeline as a ruse to transport interstate gas.

[00:51:36] Speaker 04:
That's a separate inquiry and that could be debated and that could be

[00:51:40] Speaker 04:
But I think it's important to zoom out.

[00:51:48] Speaker 04:
The court can decide the Section 7 issue on one basis, and it's a basis that Sierra Club doesn't dispute.

[00:51:54] Speaker 04:
And that's our interpretation of Section 601 of the Natural Gas Policy Act.

[00:51:59] Speaker 04:
And this is why it doesn't matter if any of the gas that is transported on the connector pipeline is interstate or intrastate, so long as it's all 311 gas, which we know that it is, because there are no connections to interstate pipelines on the connector pipeline.

[00:52:15] Speaker 04:
That is Section 601A2B.

[00:52:18] Speaker 04:
which provides that a pipeline that is otherwise a natural gas pipeline and only natural gas pipelines are subject to Section 7 is not such a pipeline by reason of or with respect to the transportation of Section 311 gas.

[00:52:35] Speaker 05:
And here, the only- Can they already be given a 311 certificate?

[00:52:39] Speaker 04:
No, Saguaro hasn't, but the only reason why Saguaro could be a natural gas pipeline is by reason of the upstream 311 transportation of interstate gas.

[00:52:51] Speaker 05:
That's exactly the concern we just had, because that same thing could be a ruse.

[00:52:55] Speaker 05:
Could show that all along this was intended, and I'm not maligning any particular company here, I'm just raising generic hypothetical points here, but the same things we did in the Big Bend argument, and that is

[00:53:05] Speaker 05:
But if it turns out, they actually don't have enough inter-state gas to justify this pipeline, especially at this diameter, and never had it.

[00:53:16] Speaker 05:
They haven't shown you unused capacity that's waiting to be shipped.

[00:53:21] Speaker 05:
No showing of that.

[00:53:23] Speaker 05:
And a week after, a day after, an hour after, the pipeline opens up initially.

[00:53:31] Speaker 05:
They shift to all inter-state gas.

[00:53:34] Speaker 05:
Your argument that this is all fine right now, that they don't challenge this, that it's non-jurisdictional because of section 311 is not much comfort.

[00:53:45] Speaker 04:
Well, respectfully, Your Honor, I think we're talking past each other, because there are two, not all interstate-sourced gas is Section 7 jurisdictional gas.

[00:53:53] Speaker 04:
So the point that I'm making is Saguaro would not even need Section 311 authorization to ship any of the interstate-sourced gas that is upstream from the connector pipeline, because all of that gas is covered by Section 311.

[00:54:10] Speaker 04:
And Section 601A2B of the Natural Gas Policy Act says,

[00:54:14] Speaker 04:
if your, you would be.

[00:54:15] Speaker 05:
Have they shown that they have that, there's capacity for them to do for that?

[00:54:20] Speaker 05:
If that's what they're intent to do is?

[00:54:21] Speaker 04:
Well, yeah, that's the only gas available.

[00:54:24] Speaker 04:
It's the connections to Westex and the other eight potential sources of gas.

[00:54:29] Speaker 05:
I thought the other eight potential sources of gas were Texas gas.

[00:54:35] Speaker 05:
You're telling me it's not Texas gas.

[00:54:36] Speaker 05:
It's 311 gas?

[00:54:37] Speaker 04:
Well, again, I could add a little more information in the sealed portion to that question.

[00:54:44] Speaker 04:
But certainly.

[00:54:45] Speaker 05:
So I'm sorry, we don't know on the public record

[00:54:49] Speaker 05:
What's the source of those eight reference companies gases.

[00:54:54] Speaker 04:
We know that they provide interest eight that they provide interest eight transportation percentage of their gases interest a.

[00:55:03] Speaker 04:
So they're intrastate pipelines.

[00:55:06] Speaker 04:
I don't know what percent is interstate or intrastate.

[00:55:08] Speaker 04:
But my bottom line point is it doesn't matter.

[00:55:10] Speaker 04:
This would be a very different case, a very different case.

[00:55:14] Speaker 04:
If the connector pipeline itself connected to a Section 7 jurisdictional interstate pipeline, then it would matter for jurisdictional purposes whether the connector pipeline was receiving any of that NGA jurisdictional gas.

[00:55:28] Speaker 04:
upon commencing service, because if it was, then no way could it be considered an intrastate pipeline.

[00:55:33] Speaker 04:
It would have to be a Section 7 jurisdictional pipeline.

[00:55:36] Speaker 04:
And in cases where there are interconnections with Section 7 pipelines, Permian Highway, Valley Crossing, where we have found that is not sufficient to take it out of the zone of intrastate pipelines, because there still has to be some showing that the pipeline's going to take gas from those intrastate pipelines.

[00:55:56] Speaker 04:
Here, we don't even have that.

[00:55:57] Speaker 04:
It's undisputed that every interconnection is with an intrastate pipeline.

[00:56:03] Speaker 04:
And so because a natural gas, Saguaro is not a natural gas company because the only reason, pipeline, excuse me, because the only reason it would be is by reason of section 311 transported gas, then it's necessarily an intrastate pipeline upon commencing service.

[00:56:24] Speaker 08:
we can finish the sentence.

[00:56:27] Speaker 08:
Would it be accurate to say in this case, as we said in Big Ben, this is not a case where the only realistic or even primary use of an interstate pipeline is to provide Section 311 service?

[00:56:38] Speaker 08:
Yes.

[00:56:40] Speaker 08:
What's your best support for saying yes?

[00:56:42] Speaker 04:
There's the 777 million cubic feet per day capacity Westex, and there's 5 billion cubic feet per day that's available from the other eight sources.

[00:56:53] Speaker 04:
And we know that all of that, if any of that gas.

[00:56:57] Speaker 05:
It is available to this pipeline, or it just has gas that somebody's shipping.

[00:57:03] Speaker 04:
Well, I think, you know,

[00:57:06] Speaker 04:
I hate to come back to the substantial evidence standard, but I think it is substantial evidence that it is available for this pipeline.

[00:57:12] Speaker 04:
The fact that Saguaro is preparing to is building a header system to to aggregate that gas.

[00:57:20] Speaker 04:
Yeah, I think I think that is.

[00:57:22] Speaker 04:
That is evidence that Saguaro is, I mean, if they're misrepresenting that and they actually have no plans to build, then that's certainly something that we would take into consideration if Saguaro ever sought 311 authorization.

[00:57:37] Speaker 04:
I mean, or we might bring an enforcement action.

[00:57:42] Speaker 04:
But I think respectfully what, Your Honor,

[00:57:47] Speaker 04:
are potentially asking for here is more than the evidence that was required in Big Bend.

[00:57:52] Speaker 04:
And under the substantial evidence standard, I think we have more than shown that A, there's substantial evidence.

[00:58:00] Speaker 05:
The evidence in Big Bend was that there was sufficient intrastate gas.

[00:58:04] Speaker 05:
Full stop.

[00:58:05] Speaker 05:
Not 311, even, intrastate gas.

[00:58:08] Speaker 04:
I don't think there was actually an inquiry there whether any of that intrastate gas was already contracted for or not contracted for.

[00:58:16] Speaker 05:
It was already in operation by the time we had our argument.

[00:58:19] Speaker 05:
They gave us the volumes of how much intrastate gas, 70%, 80%, they'd been transporting.

[00:58:27] Speaker 05:
So that's a lot more substantial evidence than we have here.

[00:58:30] Speaker 04:
It might be more in that sense, but I don't think this is positive.

[00:58:34] Speaker 05:
So this is not the same substantial evidence record as Big Bend.

[00:58:39] Speaker 03:
Do you have any questions?

[00:58:44] Speaker 03:
All right.

[00:58:45] Speaker 05:
Thank you, Your Honor.

[00:58:48] Speaker 05:
Thank you.

[00:58:49] Speaker 05:
I hope I'm saying it right, Saguaro.

[00:58:50] Speaker 05:
Saguaro.

[00:58:52] Speaker 05:
I'm sorry, Counselor, did you want to go into closed session, or do you feel like you said enough?

[00:58:56] Speaker 05:
Do you feel like you need to go into closed session?

[00:58:58] Speaker 04:
I think it would be helpful for a closed session.

[00:59:13] Speaker 06:
Good morning, Your Honor.

[00:59:14] Speaker 06:
Jeremy Marwell.

[00:59:16] Speaker 06:
Good afternoon, Your Honor.

[00:59:16] Speaker 06:
Jeremy Marwell for interveners, including Saguaro Connector Pipeline.

[00:59:21] Speaker 06:
Saguaro, like a W. I would like to touch on both the Section 7 and Section 3 issues.

[00:59:29] Speaker 06:
If it's not too jarring, maybe start with Section 3.

[00:59:31] Speaker 06:
Talk about the tests, the statute, and some of the practicalities that the court was asking about.

[00:59:38] Speaker 06:
At paragraph 23 of the rehearing order at JA 415,

[00:59:42] Speaker 06:
The commission did say that it has consistently said that when a company constructs a pipeline to import or export volumes of natural gas, quote, only a small segment of the pipeline close to the border is deemed to be the import or export facility for which section three authorization is necessary.

[00:59:59] Speaker 06:
So that may not be mathematical, but I think it is a test.

[01:00:04] Speaker 06:
The argument that petitioners have advanced in this court, and I think the thing that you need to address and perhaps the only thing you need to address is whether that also extends to 155 miles

[01:00:15] Speaker 06:
upstream intrastate.

[01:00:17] Speaker 06:
And I think that is clearly wrong as a matter of text, context, structure, and history.

[01:00:22] Speaker 06:
Happy to talk about the details of the statute, but I think the difference between 3A and 3E, the fact that 3E talks about the words facilities and transportation, 3A is only import-export.

[01:00:34] Speaker 06:
The whole structure of the Natural Gas Act is predicated on preserving state role over intrastate pipelines.

[01:00:42] Speaker 06:
I would say, Judge Millett, with regard to your question, what if there was something at 1,400 feet or some sensitive resource?

[01:00:50] Speaker 06:
The petitioners did not make that argument in this court that there was something.

[01:00:54] Speaker 06:
I think the court's interpretation in district gas, which really inferred from the reference to import and export in 3A, the authority over facilities, and we're taking district gas as we find it, I think that

[01:01:07] Speaker 06:
Understands that there has to be some discretion in the commission to draw these lines with respect to the facilities and of course district s was an import terminal.

[01:01:15] Speaker 06:
So there was a fence line and that was the Fight everybody on easier than it was but of course Congress also acted in 2005 to add section 3e to the natural gas act to clarify the commission's authority and I think

[01:01:30] Speaker 06:
The key point is just, I think it would be inconsistent with the structure of the gas act to infer to sort of extend district gas 155 miles upstream.

[01:01:39] Speaker 05:
Is it that they lack the power or the, the commission may have the power under the words of three a to decide how far up it should go.

[01:01:51] Speaker 05:
And thus far it has done this.

[01:02:00] Speaker 05:
kind of hard to get my fingers on, but something under the concept of close enough for government work or something.

[01:02:08] Speaker 06:
So I think post-looper, we think the court should say what the best reading of this statute is.

[01:02:14] Speaker 06:
And we think the best reading in the specific context of these border crossing pipelines, putting aside LNG, is that the commission's authority is limited to a short segment of pipeline at the border, the segment that effectuates the international export.

[01:02:28] Speaker 05:
Think that's consistent effectuate.

[01:02:30] Speaker 06:
So that's gonna be like a foot Well, maybe I can give some isn't that what would effectuate the export would be where you connect to Mexico until then So I guess I would concede that the language in district as an imperative 23 through hearing order is not Mathematical, you know 1,000 feet and not 1,001 there are many of these projects including the

[01:02:53] Speaker 06:
the one in Big Bend and cited in the commission's brief.

[01:02:56] Speaker 06:
Sometimes there is a meter station close to the border.

[01:03:00] Speaker 06:
Sometimes there is some other physical thing.

[01:03:03] Speaker 06:
I don't think the record in this case shows that that's 1,000 feet.

[01:03:07] Speaker 06:
The applicants try to propose something that is consistent with the commission's precedent in the hope that the commission will apply its precedent consistently.

[01:03:16] Speaker 06:
One other observation, our upstream pipeline here is regulated by the state of Texas as an intrastate pipeline.

[01:03:22] Speaker 06:
It's actually a gas utility, which is a term of art.

[01:03:25] Speaker 06:
You can see that in the record.

[01:03:27] Speaker 06:
I think it's at JA 180.

[01:03:30] Speaker 06:
And that means we have an obligation to serve all comers, right?

[01:03:33] Speaker 06:
It's sort of a step above.

[01:03:35] Speaker 06:
And so if folks come along the pipeline and ask for service, you know, that may happen.

[01:03:42] Speaker 06:
So I think that just underscores Texas' role.

[01:03:44] Speaker 05:
Do you have an affirmative representation that Texas will regulate this?

[01:03:47] Speaker 05:
Because petitioners have said that it won't be regulated because Texas will treat it as an export facility.

[01:03:55] Speaker 05:
And so is there something affirmative in the record that says Texas will regulate the 155-mile?

[01:04:05] Speaker 06:
Yes, the permits we have gotten from Texas confirming that this is so if you look, if you look at J one eight nine and at J one nine zero those permit to operate a pipeline in Texas from the Texas Railroad Commission.

[01:04:22] Speaker 06:
If I understood petitioners arguments, Judge Millett,

[01:04:25] Speaker 06:
It was more that they disagree with the way that Texas regulates the pipeline.

[01:04:28] Speaker 05:
Right, that's a totally different question.

[01:04:29] Speaker 06:
Yes, which I think is a different question.

[01:04:31] Speaker 06:
And of course, what you say about Section 3 here is going to apply in Texas and everywhere else that we have a border, both at the Canadian and Mexican border.

[01:04:38] Speaker 06:
So I don't think it should wax or wane with the degree of stringency that a particular state chooses to operate.

[01:04:45] Speaker 06:
I mean, that is sort of implicit in Congress having chosen to reserve authority to the states.

[01:04:53] Speaker 06:
On San Diego, I don't think there was any evidence in the commission's decision that the 2.1 was litigated, so I take the point that, you know, we want consistency, but sort of a drive-by jurisdictional ruling, if you don't mind the mixing of metaphors there.

[01:05:09] Speaker 06:
And petitioners did not raise San Diego in their rehearing request at all, so I think if there's a sort of failure of explanation concern, I don't think they preserve that on rehearing.

[01:05:21] Speaker 06:
If there are no other questions.

[01:05:22] Speaker 05:
Well, if we have to decide something de novo just trying to ask if they have an informative argument, it's not something I think someone else can wave from us.

[01:05:30] Speaker 05:
I understand.

[01:05:32] Speaker 06:
I think the language that the commission used in the hearing order that I quoted to you is probably capacious enough to encompass that.

[01:05:38] Speaker 06:
And if there are specific cases on specific facts where somebody comes and says, look, there's a really sensitive resource at 1,500 feet or whatever, I mean, the commission can grapple with that.

[01:05:49] Speaker 08:
Um, before you move on to section seven, is that where you were going to go?

[01:05:52] Speaker 08:
I was.

[01:05:54] Speaker 08:
Can you expand on the statement in your brief that Sierra Club's position would upset billions of dollars of investment?

[01:06:06] Speaker 06:
Yes, so I mean, if you look at a map of Texas, there are border crossing facilities all along, scattered along the southern border, and all of them are served, we're talking about border crossing pipelines, not LNG terminals, and all of them are served by upstream pipelines.

[01:06:27] Speaker 06:
I think what Sierra Club is trying to do here is

[01:06:30] Speaker 06:
upset the regulatory status of those upstream pipelines, investment decisions, customers who are being served by those upstream pipelines, the role of the state of Texas in regulating all of those pipelines.

[01:06:40] Speaker 06:
And there's a reason this case looks like Big Bend.

[01:06:42] Speaker 06:
We can talk about how similar or not.

[01:06:44] Speaker 06:
But investment is made in reliance on the standards and the approach that the commission gives.

[01:06:51] Speaker 06:
This is a system that relies on private parties to invest and build pipelines.

[01:06:56] Speaker 06:
The 30-year stability of that regime, I think, is something the court could consider, even post-Loper.

[01:07:01] Speaker 06:
I mean, the concept of reliance and consistency in an agency position, I think, weighs in its favor.

[01:07:06] Speaker 06:
Even if you don't think, as we do, that you can do it just based on the text.

[01:07:13] Speaker 06:
As to whether the upstream is an interstate pipeline, it won't surprise you, we think this is very similar to Big Bend.

[01:07:22] Speaker 06:
Maybe one important distinction to start, Judge Millett, with your question about the 27%, and is it really a ruse?

[01:07:30] Speaker 06:
Are we really going to be flowing section 311 gas?

[01:07:33] Speaker 06:
Everything coming onto this pipeline, if we build it the way we told FERC we were going to, which is our intention,

[01:07:39] Speaker 06:
All eight of those sources that are in the sealed map at JA 174 are intrastate pipelines.

[01:07:47] Speaker 06:
If we were to in the future

[01:07:49] Speaker 06:
interconnect directly to an interstate pipeline, which I think what we had in Big Bend, then we would need Section 311 authority.

[01:07:57] Speaker 06:
But even as petitioners concede, we haven't said we're going to do that.

[01:08:01] Speaker 06:
What we want to build is the thing we told FERC, the thing that's shown on that map.

[01:08:05] Speaker 06:
Anything coming off those intrastate pipelines is not a basis to trigger Section 7.

[01:08:10] Speaker 06:
So in a way, it doesn't matter how much comes off Westex versus one of the other pipes.

[01:08:15] Speaker 06:
that sources directly from Texas.

[01:08:17] Speaker 05:
What evidence is there?

[01:08:19] Speaker 05:
Because again, we had the evidence, you know, we had the evidence in Big Bend, very strong evidence that they were doing interest rate gas.

[01:08:27] Speaker 05:
And here it's very strange.

[01:08:29] Speaker 05:
I haven't seen cases like this where they go, well, here's a, whether it's company suppliers or other pipelines, we'll just say eight other, eight suppliers here that we can hook up, that we could hook up with without any evidence that in fact,

[01:08:44] Speaker 05:
They have capacity to offer any evidence that they have capacity to offer that would be remotely sufficient given the size of this.

[01:08:52] Speaker 05:
I mean, you've got a great big pipeline here.

[01:08:55] Speaker 05:
So you must have thought you're going to be doing a large volume of something.

[01:08:57] Speaker 05:
So where is there substantial evidence that there's available capacity intrastate to

[01:09:12] Speaker 05:
run this pipeline to make it economically viable.

[01:09:15] Speaker 05:
I'm sorry.

[01:09:16] Speaker 06:
I get it.

[01:09:18] Speaker 06:
So I would tick through the things the court said in Big Bend.

[01:09:23] Speaker 06:
First, the entire upstream is going to be physically in Texas.

[01:09:28] Speaker 06:
Second, we told the commission we were going to flow molecules produced in Texas.

[01:09:32] Speaker 06:
Third, the commission interrogated that, asked us about it.

[01:09:36] Speaker 06:
The same evidence, by the way.

[01:09:37] Speaker 06:
Can I ask you something?

[01:09:38] Speaker 05:
Yes.

[01:09:38] Speaker 05:
Just use molecules and that gives me flashbacks to chemistry and stuff that I didn't understand.

[01:09:43] Speaker 05:
So did you tell them that you will be transporting gas produced in Texas?

[01:09:54] Speaker 00:
Yes.

[01:09:54] Speaker 05:
Is that what Texas source gas means as opposed to interstate gas that's sitting in an interstate pipeline in Texas, which is what FERC was suggesting it might be?

[01:10:05] Speaker 06:
Yes.

[01:10:05] Speaker 05:
You said molecules in Texas and I'm like, okay, that sounds like it's coming out of the ground in Texas.

[01:10:10] Speaker 06:
It is.

[01:10:10] Speaker 06:
And I want to be, I want to try to be clear about that.

[01:10:12] Speaker 06:
We made that representation to the commission.

[01:10:14] Speaker 06:
That is our intent.

[01:10:16] Speaker 06:
In, in support of that representation, we gave them the sealed map, which has the names and capacity figures of the eight interest aid facilities.

[01:10:25] Speaker 06:
Some of those flow three 11 gas as FERC is well aware, because any pipeline that wants to flow three 11 glass has to ask FERC and they issue an order.

[01:10:32] Speaker 06:
So Westex.

[01:10:35] Speaker 06:
Others of those do not have 311 capacity.

[01:10:37] Speaker 06:
We gave an example of that in our brief.

[01:10:39] Speaker 06:
It's sealed, but you have it.

[01:10:41] Speaker 06:
And that means every molecule is coming from the state of Texas.

[01:10:45] Speaker 06:
And so what we told them, number one, this is the first ground, everything's coming from Texas.

[01:10:49] Speaker 06:
That's, I think, exactly the representation that you had in Big Bend.

[01:10:55] Speaker 05:
Is it available to you all?

[01:10:56] Speaker 05:
Where's the evidence of that?

[01:10:57] Speaker 05:
You could point to, and it turns out they already have contracts with some other pipeline.

[01:11:02] Speaker 06:
I understand.

[01:11:03] Speaker 06:
So remember, we're a pipeline.

[01:11:04] Speaker 06:
We provide transportation service.

[01:11:06] Speaker 06:
It is up to our customer, who is also an intervener here and on the brief, the principal customer, to source the gas, the physical molecules, and to arrange the capacity to get it to our facility.

[01:11:18] Speaker 06:
We just provide it from the

[01:11:21] Speaker 06:
facilities that you see on that map down to the border, that's our job.

[01:11:24] Speaker 06:
And I guess right up to the border.

[01:11:26] Speaker 06:
So what you have in the record is support from our customer, who is intending to take the gas down to Mexico, liquefy it, and send it abroad, that this is a facility they're going to use.

[01:11:38] Speaker 06:
And we gave them eight different options.

[01:11:40] Speaker 06:
Remember, capacity on pipelines also

[01:11:43] Speaker 06:
Can come and go.

[01:11:44] Speaker 06:
I mean, you might think of it in the context of a pipe going to a local distribution company domestically where they know they were always going to have, you know, a certain degree of need.

[01:11:53] Speaker 06:
But here we are in the same region of Texas that we were in the band near the Waha.

[01:11:58] Speaker 06:
Region the hub the pricing hub.

[01:12:01] Speaker 06:
It is approximate to one of the most prolific production regions in Texas The Commission knows that they are the expert pipeline agency and when we tell them the names of those pipelines and the physical capacity of those pipelines they understand that it is a way to interrogate our submission to them available capacity and

[01:12:21] Speaker 06:
Yes.

[01:12:21] Speaker 05:
And I think it's just weird that no one ever used that adjective.

[01:12:25] Speaker 05:
It's quite striking.

[01:12:26] Speaker 06:
I understand.

[01:12:27] Speaker 06:
I mean, this may not be comforting to you, but one way to think about it is, I mean, if we can't flow the pipeline at a hundred percent, that's a commercial risk the company's willing to take.

[01:12:37] Speaker 06:
We're going to invest this because we have a customer who wants to pay us to use it.

[01:12:40] Speaker 06:
If it turned out to be a bust, you know, obviously that risk is, is on us, but the key representation and I,

[01:12:49] Speaker 06:
I hesitate to draw the analogy, but I think it is important to remember that what FERC does in the Section 7 context, you know, when you're reviewing FERC's action for an interstate pipeline, and I know you've had many of these cases, is looking at, you know, the precedent agreements and is it

[01:13:04] Speaker 06:
50% is at 75% that is not the regulation that for does under section 3 Because Congress as you said at the beginning of the argument created a statutory presumption in favor of exports So it is a lighter-handed regulation and maybe your instinct is that if this were a section 7 case you would demand more proof, you know of available capacity or whatever, but here

[01:13:31] Speaker 06:
We have the information we gave FERC plus the submissions from our customer in the record saying that, yes, this is something we want and we're going to use.

[01:13:39] Speaker 06:
And I think under the substantial evidence standard, at least as the court articulated in Big Bend, that easily passes the test.

[01:13:52] Speaker 05:
Any other questions?

[01:13:53] Speaker 08:
You had been kicking through some similarities with big Ben.

[01:13:56] Speaker 08:
Did you end up getting to all those similarities?

[01:13:58] Speaker 05:
Sorry.

[01:13:58] Speaker 05:
I got thrown by molecules.

[01:14:01] Speaker 06:
Oh, thank you.

[01:14:03] Speaker 06:
Um, so I think I said it, but one similarity is that we submitted, uh, information about connections with the intrastate pipelines.

[01:14:12] Speaker 06:
Judge Millett, um, in big Ben's footnote, 25 of first rehearing orders.

[01:14:17] Speaker 06:
That was the trans Picos rehearing order.

[01:14:20] Speaker 06:
talked about information that the applicant had submitted there.

[01:14:23] Speaker 06:
It is reproduced at JA 253 to 264 of this court's joint appendix in Big Bend, which is available to you.

[01:14:31] Speaker 06:
And you'll see that it is a list of intrastate pipeline connections and physical information about those connections.

[01:14:36] Speaker 06:
That's not something that the court specifically referenced in its opinion, but I think it is an important similarity.

[01:14:46] Speaker 06:
I think that was all.

[01:14:47] Speaker 06:
Thank you.

[01:14:48] Speaker 05:
Thank you.

[01:14:48] Speaker 05:
Sorry.

[01:14:49] Speaker 05:
All right.

[01:14:50] Speaker 05:
Thank you.

[01:14:52] Speaker 05:
We're going to give you a rebuttal, but it may make sense.

[01:14:55] Speaker 05:
You didn't have anything you wanted to say in the closed session, but do you have more or is that sufficient?

[01:15:00] Speaker 05:
Because you pointed us to stuff.

[01:15:01] Speaker 05:
We have the materials.

[01:15:03] Speaker 06:
I would be happy to, certainly if the court has questions about the sealed chart at J174, which is the chart I've been referring to repeatedly, including the numbers and the specific details, I'd be happy to talk about them.

[01:15:16] Speaker 06:
But I think the key point is

[01:15:18] Speaker 06:
It's very similar to what you had in Big Bend.

[01:15:20] Speaker 06:
All of them are intrastate, and the fact that some of them are 311 is not legally relevant.

[01:15:24] Speaker 06:
It's not a ground to assert Section 7 jurisdiction.

[01:15:27] Speaker 06:
That's the Commission's Westar precedent, which I think goes very carefully through the text.

[01:15:34] Speaker 05:
No, you don't need to say anymore.

[01:15:36] Speaker 05:
I'm sorry.

[01:15:38] Speaker 06:
Only if the court had questions about J174.

[01:15:39] Speaker 05:
All right.

[01:15:40] Speaker 05:
So does the government still wish to go to SEAL session?

[01:15:43] Speaker 03:
I agree with that.

[01:15:44] Speaker 03:
If the court has questions, but based on Mr. Marlowe's presentation, I don't have anything that.

[01:15:49] Speaker 05:
Do you have anything you want to ask in SEAL session?

[01:15:51] Speaker 05:
Do you have anything you want to ask in SEAL session?

[01:15:53] Speaker 05:
Cancel that.

[01:15:54] Speaker 05:
You may come up and have two minutes of rebuttal.

[01:16:02] Speaker 02:
I'd like to start with the Section 3 argument.

[01:16:04] Speaker 02:
If they admit that they have Section 3A jurisdiction, the only question in this case is how far up the pipeline that jurisdiction goes.

[01:16:11] Speaker 02:
This is based on the premise of the connector pipeline.

[01:16:14] Speaker 02:
is a separate project, but nothing divides the facility.

[01:16:18] Speaker 02:
As I mentioned, there are no interconnects.

[01:16:20] Speaker 02:
And as FERC and interveners have said, as FERC identifies, the end of that 1,000 feet is just a point along the pipeline, and that's at JA016.

[01:16:29] Speaker 02:
And interveners state that this limitation is due to the Natural Gas Act and not any, quote, factual or operational distinctions.

[01:16:36] Speaker 02:
I'd also like to point to

[01:16:39] Speaker 02:
18 CFR 153.5, which is FERC's regulations for the Natural Gas Act and who should apply for section three.

[01:16:47] Speaker 02:
A points to any person proposing to site, construct, or operate facilities which are to be used for export.

[01:16:55] Speaker 02:
The word border does not come in until section B, which is any person applying under paragraph A of the section to construct facilities at the border.

[01:17:03] Speaker 02:
And that's for the presidential authorization, which is a separate and distinct thing

[01:17:07] Speaker 02:
that projects built at the border need to do.

[01:17:11] Speaker 02:
This drawing of the line at 1,000 feet has no basis.

[01:17:14] Speaker 02:
As we pointed out in our rehearing request, why is this 1,000 feet?

[01:17:18] Speaker 02:
Why is it not a mile, 10 miles?

[01:17:21] Speaker 02:
What is the distinction there?

[01:17:22] Speaker 02:
And it's just inconsistent with their own authority extending jurisdiction on the other pipelines as we discussed.

[01:17:31] Speaker 02:
I'd also like to point out that

[01:17:35] Speaker 02:
The DOE delegation order is not limited to the border as we previously discussed.

[01:17:41] Speaker 02:
It's for domestic facilities, construction and operation, siting and for the border location.

[01:17:48] Speaker 02:
And they are just misstating it as if number one and two don't apply to export facilities and means and, not or.

[01:17:56] Speaker 02:
It's supposed to be all of these things.

[01:17:58] Speaker 02:
I see that I am running out of time.

[01:18:00] Speaker 02:
So for these reasons, we believe that this order should be vacated and sent back to her.

[01:18:05] Speaker 05:
All right.

[01:18:06] Speaker 05:
Thank you.

[01:18:06] Speaker 05:
Thank you to all counsel.

[01:18:08] Speaker 05:
The case is submitted.