Generate a report that examines whether FERC has authority to regulate the safety of LNG facilities, or if PHMSA has exclusive safety authority. Do a deep dive on the pertinent legislative history, as well as the key statutes, regulations, and guidance. The report should be a polished legal memo.

Examination of Regulatory Authority Over LNG Facility Safety: FERC vs. PHMSA

Introduction

The regulation of liquefied natural gas (LNG) facilities in the United States is governed by complex legislative frameworks that involve multiple federal agencies, primarily the Federal Energy Regulatory Commission (FERC) and the Pipeline and Hazardous Materials Safety Administration (PHMSA). This report investigates whether FERC has the authority to regulate safety at LNG facilities or if such authority rests exclusively with PHMSA. This legal memo reviews pertinent legislative history, key statutes, regulations, and regulatory guidance to elucidate the roles of these two agencies.

I. Overview of Regulatory Authorities

A. Federal Energy Regulatory Commission (FERC)

FERC was established under the Federal Power Act of 1935 and is tasked with regulating the interstate transmission of electricity, natural gas, and oil. For LNG facilities, FERC's primary role is the regulation of the siting, construction, and operation of LNG terminals under the authority of the Natural Gas Act (NGA).

B. Pipeline and Hazardous Materials Safety Administration (PHMSA)

PHMSA, part of the U.S. Department of Transportation, is dedicated to ensuring the safe transportation of hazardous materials, including LNG. The agency enforces safety regulations codified in 49 CFR Part 193, which specifically addresses the design and safety parameters for LNG facilities.

II. Legislative History and Key Statutes

A. The Natural Gas Act (NGA)

The NGA, enacted in 1938, authorizes FERC to regulate the transportation and sale of natural gas in interstate commerce. Under Section 3, FERC has the jurisdiction to review and approve applications for the siting and construction of LNG import and export facilities. However, the NGA does not explicitly address safety regulations, which has led to ongoing ambiguity regarding FERC's authority in that realm.

B. The Department of Transportation Act (DOT Act)

Created in 1966, the DOT Act established PHMSA and gave it the power to create and enforce safety regulations for hazardous materials transportation. The act's safety provisions apply broadly, and PHMSA's regulations under 49 CFR Part 193 outline comprehensive safety standards that LNG facilities must follow. This regulation includes requirements for facility design, siting, operations, and emergency response.

III. Analysis of Regulatory Authority

A. Jurisdictional Overlap

Significant legislative overlap exists between FERC and PHMSA concerning LNG facilities. FERC primarily focuses on economic regulation and environmental considerations related to LNG facility siting and operation, while PHMSA centers on health and safety matters. Consequently, both agencies impact LNG operations, though their focuses diverge.

B. Regulatory Guidance and Precedents

Legal precedents and policy guidance reveal that while FERC can impose conditions regarding safety in its authorizations, it typically defers to PHMSA on detailed safety regulations. A notable example includes the Mattawoman Energy, LLC decision, where the court upheld the view that safety remains under PHMSA’s purview despite FERC’s broader regulatory involvement.

IV. Existing Regulations

The following are significant regulations relevant to the jurisdiction of both agencies:

1. FERC Regulations: Focus on the approval process for LNG facilities, ensuring they meet environmental and economic standards.

2. PHMSA Regulations (49 CFR Part 193): Detailed provisions for LNG facility design, construction standards, and operational protocols ensuring safety and risk management.

V. Recent Developments

Recent regulatory updates have continued to clarify the extent of each agency's authority. For example, PHMSA has proposed new rules to modernize LNG safety regulations and incorporate industry standards, emphasizing its commitment to oversight PHMSA. Meanwhile, FERC has also revised its regulatory processes to integrate safety considerations into its LNG authorization processes FERC.

Conclusion

The authority to regulate the safety of LNG facilities in the United States is intricately shared between FERC and PHMSA. While FERC holds the authority to approve facility siting and operational licenses, PHMSA retains exclusive jurisdiction over safety regulations governing LNG. This duality necessitates ongoing collaboration to ensure effective regulation that addresses safety, environmental, and economic concerns. Future legislative clarifications could further define these roles, ensuring a cohesive regulatory framework that adapts to evolving energy and safety landscapes.