Natural Gas Pipeline Siting in Massachusetts

The Massachusetts Energy Facilities Siting Board (EFSB) is a nine-member board charged with ensuring a reliable energy supply for the state with a minimum impact on the environment at the lowest possible cost.  The EFSB’s primary function is to review petitions for the construction of major energy infrastructure in Massachusetts, including large power plants, electric transmission lines, natural gas pipelines, and natural gas storage facilities.  The EFSB has primary jurisdiction over the siting of natural gas pipelines solely within the state.  The siting of natural gas pipelines which cross state lines is overseen by the Federal Energy Regulatory Commission (FERC), although the EFSB participates actively in the FERC process.

The Department of Public Utilities (DPU) has jurisdiction over natural gas distribution companies (LDCs).  The LDCs must submit long-term gas transportation contracts with pipeline companies that cross state lines (known as precedent agreements) to the DPU for approval.  The DPU approves such contracts when it finds that the contracts are in the interest of Massachusetts gas ratepayers.  

In Massachusetts, the DPU’s safety jurisdiction for natural gas pipelines is limited to  facilities solely within the state and their operators.  Federal agencies, such as the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) have primary safety oversight of natural gas pipelines that cross state lines.  

The DPU has statutory authority to allow natural gas pipeline companies to enter upon land to survey property that may be necessary to construct a natural gas pipeline in Massachusetts.  In addition, the DPU also has the authority to grant eminent domain rights to pipeline companies to secure easements or other property rights regarding an approved pipeline route.

1. Open Season Process

When a pipeline company is considering a proposed pipeline project, it first undertakes an analysis of market demand for the pipeline and the cost of providing such service.  If a pipeline company decides there is an economic opportunity to construct a pipeline, the company will conduct an an “open season” process of prospective customers interested in the transportation of natural gas using the new pipeline facility.  Customers interested in contracting for the services of the new pipeline are required to sign “precedent agreements,” which are preliminary contracts establishing terms and conditions of service.  A Massachusetts gas LDC must submit its precedent agreements to the DPU for approval.

2. Survey Process

If a pipeline company determines there is sufficient market interest for a new pipeline, it then undertakes a survey of the land along the potential route to collect the information necessary for further developing its project proposal.  The survey process typically includes the following five types of information:

1. civil surveys to locate the potential centerline for the pipeline;
2. geotechnical surveys to investigate sub-surface conditions where the pipeline may be placed;
3. archeological surveys and cultural resource investigations to identify the possible presence of archeological or cultural resource materials;
4. wetlands and waterbody boundaries to identify the location of wetlands; and
5. endangered species and rare species surveys to identify the locations of rare and endangered species habitat.

Typically, a pipeline company will first approach landowners to request access to survey land along a potential route.  A landowner may deny such a request.  If that happens, the company is allowed to file a petition with the DPU seeking authorization to access a landowner’s property for survey purposes.  In its review of survey authorization requests in a docketed public proceeding, the DPU ensures that landowners are properly notified of the survey request and have an opportunity to comment.  When granting survey authorization to pipeline companies, the DPU may impose conditions designed to ensure that the landowners’ property is protected.

3. Pre-filing Process at FERC

FERC allows a company seeking to construct a pipeline to “pre-file” before the formal FERC application process begins.  During the pre-filing stage, landowners, state and local officials, and other stakeholders have an opportunity to comment on any issues of concern and make suggestions of potential improvements to the proposal.  These suggestions can include the mitigation of environmental impacts.  The EFSB, affected state landowners, and the relevant state permitting and approval authorities actively participate in the pre-filing process to protect the interests of the state and its residents.  These stakeholders and authorities will provide comments to FERC that address both the impact of the project on state lands and interests as well as identify the state permits and approvals that apply to such projects.  The EFSB incorporates the comments received from the public in addition to submitting comments based upon the expertise of EFSB staff.

4. Certificate Application Filing at FERC

Ultimately, a gas pipeline company is required to file a formal application with FERC and must obtain a “certificate” from FERC in order to begin construction of pipeline that will cross state lines.  FERC regulations require the project applicant to make a good faith effort to notify all affected landowners and local, state and federal governments and agencies involved in the project.  Such parties may petition for intervener status so that they may participate in the proceeding.  In addition, interested federal and state agencies, including the EFSB, may seek intervener status from FERC.  During the formal filing, FERC identifies various environmental issues relating to the project, and may require certain environmental assessments from the company.  FERC also considers whether there is a demonstrated need for additional gas in the proposed area.  There are three ways the public can participate:

1. submit comments through the EFSB
2. submit comments to FERC
3. intervene in the FERC proceeding

5. Granting of a Certificate

If FERC approves a pipeline after the formal filing, it will issue a certificate, which allows a pipeline company to begin construction of the pipeline.  Other state and local permits and approvals are sought by pipeline companies to ensure that state and local laws and regulations are followed.  FERC encourages pipeline companies to comply with state and local regulations to the extent possible, but sometimes there may disputes as to whether compliance is compatible with the requirements of the FERC certificate. In that case, FERC requirements prevail.

In the pre-filing stage, FERC will generally conduct public hearings and request written comments from residents and others so they have an opportunity to provide input on their concerns and suggestions.  Additionally, FERC and the company engage with various stakeholders, including the EFSB and other state and local agencies, public officials, affected landowners, and other members of the public.  The EFSB may also hold public comment hearings during the pre-filing phase.

During the formal certificate application filing stage, FERC will conduct public comment hearings.  Written comments are accepted if an Environmental Impact Statement (EIS) is required and FERC may hold public comment hearings during the certificate application stage as well.  If only an Environmental Assessment (EA) is required, FERC will request written public comments but hold no further public comment hearings.

Any member of the public, including all affected landowners, may apply to FERC to become an intervener in a certificate application filing.  Persons seeking to intervene generally must demonstrate that they are directly affected by the proposed pipeline project.  In addition, certain federal and state agencies, including the EFSB, may obtain intervenor status by filing a motion to intervene with FERC.

When a natural gas pipeline is proposed, affected landowners often have many questions about the FERC process and how they can be both well informed and participate actively.  FERC has developed a detailed publication addressing many such questions and providing other useful information.  It can be found in the "Additional Resources" section below.

The pre-filing stage serves as a preliminary environmental review of the proposed project.  FERC uses the pre-filing to encourage early identification and resolution of environmental issues, such as land use, water resource impacts, and wildlife habitat impacts.

At the pre-filing stage, FERC conducts “project scoping” to determine the environmental issues regarding the proposed pipeline.  Depending on the degree of review warranted, the company will be required to submit either an EA (for smaller projects) or an EIS (for larger projects) under the federal law.  The Company will also file with the Massachusetts Environmental Policy Act (MEPA) Office for environmental review.  

The Company will also be required to apply for other local permits, including those required under the Wetlands Protection Act, the Massachusetts Endangered Species Act and other environmental and permitting programs.

Gas pipeline companies rely on FERC-approved, cost-based tariffs to recover the costs of constructing, owning, and operating a natural gas pipeline.  Typically, local gas distribution companies make commitments for multi-year contracts with pipelines that cross state lines and agree to pay FERC-approved rates.

Applicants for a pipeline certificate are required to certify to FERC that they will “design, install, inspect, test, construct, operate, replace and maintain” a gas pipeline facility under standards and plans contained in the Pipeline Safety Act.  While FERC has oversight in ensuring that pipelines are safely constructed, once natural gas is flowing in the new system, the PHMSA assumes responsibility for the safe operation of the pipeline.  The PHMSA is also responsible for establishing and enforcing strict safety standards for natural gas pipelines and conducting frequent inspections to ensure compliance.