Commissioner James Danly Statement
February 17, 2022
Docket No. AD22-7-000
I concur because the Commission always has discretion to issue a Notice of Inquiry (NOI) on any topic within its purview. I also concur because I agree that we recently faced a potential jet fuel shortage driven, at least in part, by the mechanisms in our pipeline tariffs. I write separately to express three concerns.
First, it is my view that the Commission should only issue notices of inquiry when there is a problem that in fact may need to be resolved and can be done so by the Commission. I do not believe that to be the case here.
Today’s NOI characterizes the problem as whether oil pipeline allocation methodologies sufficiently address anomalous conditions and identifies only one instance where this problem has occurred: “effects of the COVID-19 pandemic on demand for pipeline capacity to airport destinations.”[1] The NOI does not show airlines as having raised concerns since July 2021 when certain airlines filed a request for emergency relief.[2] Airlines are not shy before the Commission. If there were still a problem, we would have heard from them.[3]
Second, while I again acknowledge that we had a particular problem with supplies of jet fuel in 2021, as a general matter, I am wary of any action wherein the Commission singles out a particular shipper category as the basis for exploring changes to its policies and tariffs.[4] This is especially true when, as here, we have not even made the most preliminary of showings that this shipper category is not similarly situated with other shippers, nor have we identified some other legitimate factor that justifies disparate treatment.[5] As commenters in response to the July 2021 request for relief stated: “All industries and shipper classes faced unprecedented demand destruction during the COVID-19 pandemic. All shippers faced challenges and choices to manage the downturn and prepare for the upcoming period when demand will return.”[6]
Third, I am not confident that carriers will willingly provide the information the Commission requests on destinations, nominations, and capacity awarded.[7] Section 15(13) of the Interstate Commerce Act prohibits common carriers from disclosing:
any information concerning the nature, kind, quantity, destination, or consignee, or routing of any property tendered or delivered to such common carrier for interstate transportation, which information may be used to the detriment or prejudice of such shipper or consignee, or which may improperly disclose his business transactions to a competitor . . . .[8]
While I acknowledge the Commission attempts to strategically deploy the word “aggregate,” I do not think that this maneuver is sufficient. Oil pipelines that deliver to airport destinations in many cases only have a few shippers, meaning that, even if data is “aggregated,” it is not difficult to discern individual shipper data. And even so, I could imagine some shippers arguing that the information, aggregated or not, might be used to their detriment or prejudice.
For these reasons, I respectfully concur.
[1] Oil Pipeline Capacity Allocation Issues and Anomalous Conditions, 178 FERC ¶ 61,105, at P 9 (2022) (Oil Pipeline Allocation NOI).
[2] Id. P 7.
[3] See also Chief Administrative Law Judge, Final Status Report, Conference to Discuss Resolution of Jet Fuel Issues at the Reno-Tahoe International Airport, Docket No. AD21-16-000, at PP 2-3 (Aug. 25, 2021) (“The long-term concerns raised regarding jet fuel capacity are too speculative at this time for the parties to a find a consensual resolution in this form . . . it is determined that the participants are at an impasse regarding long term remedies . . . . Going forward, based on a general assessment of the matters at issue, the attendees and other concerned entities would be well advised to continue discussions, in their regular course of business. It seems beneficial for all entities to keep open lines of communication to identify issues or disputes before they arise, and to engage in dialogue on how to best obtain optimal commercial resolution of what they perceived to be issues in this matter.”). But see Hearing to Review Admin. of Laws Within FERC’s Jurisdiction Before the S. Comm. on Energy and Nat’l Res., 117th Cong. (2021) (responding to Senator Cortez Masto on 2021 jet fuel shortages, “I think this issue of historical use needs to be addressed. I raised this as an issue in a technical conference we had earlier in the year. I think we need a different approach to allocating capacity because of different anomalies. And you have my commitment that we will take a look at that and hopefully act before next summer’s demand peak”) (statement of Richard Glick, Chairman of the Fed. Energy Regulatory Comm’n), https://www.energy.senate.gov/hearings/2021/9/full-committee-hearing-to-review-administration-of-laws-within-ferc-jurisdiction.
[4] I also note that the NOI solicits information not related to the anomalous conditions problem. Id. P 9, Question B.7 (“Please describe whether expansions of capacity on the pipelines serving airport destinations would help address current and future jet fuel needs.”).
[5] See 49 App. U.S.C. § 3 (1988) (prohibiting undue preference).
[6] Pilot Travel Centers LLC, et al., Joint Motion to Intervene and Protest, Docket No. OR21-10-000, at 3 (Jul. 27, 2021); see also Chevron Products Co., et al., Response to Request for Emergency Relief under Section 1(15) of the Interstate Commerce Act, Docket No. OR 21-10-000, at 2 (Jul. 28, 2021) (“The Commission should ask whether the Request is seeking to prioritize jet fuel and those who can afford to access air travel at the expense of supplying transportation fuels that affect many more people and their daily lives as they go to work, daycare, school, and deliver goods and services in support of their communities.”).
[7] See Oil Pipeline Allocation NOI, 178 FERC ¶ 61,105 at P 9, Question B.3 (“[P]lease provide . . . aggregate jet fuel nominations to each airport destination, and aggregate pipeline capacity awarded for jet fuel movements to each airport destination . . . .”); id. Question B.5 (“Regarding products other than jet fuel transported on pipelines serving airport destinations, please provide data showing how aggregate product nominations and aggregate pipeline capacity awarded for each product have changed during the COVID-19 pandemic.”).
[8] 49 App. U.S.C. § 15(13) (1988).