The Fifth Circuit Remands to FERC
In 2002, Jupiter Energy Corporation ("Jupiter") applied to the Federal Energy Regulatory Commission ("FERC") for a determination that two of its pipelines in the Gulf of Mexico were not for the primary purpose of transporting gas -- a purpose within the FERC's regulatory jurisdiction -- but were instead for the primary purpose of gathering gas -- a purpose beyond the FERC's regulatory jurisdiction. Relying on a 1966 order that the pipelines in question were a transport system, the FERC determined that the pipelines were for the primary purpose of transporting gas. Jupiter appealed, and the Fifth Circuit vacated and remanded. 407 F.3d 346 (5th Cir. 2005).
On remand, the FERC arrived at the same conclusion, and Jupiter again appealed. Once again, the Fifth Circuit vacated and remanded. No. 05-61173 (5th Cir. March 15, 2007). The panel concluded that several features of the pipelines weighed in favor of the finding that their primary purpose was the gathering of gas. Specifically, the panel held that "[t]he glaring shortfall in the Commission's order is the lack of a reasoned explanation to support its disregard of the length, diameter, operating pressure, and non-physical factor's of Jupiter's system, which all weigh in favor of a gathering function."
