State vs federal jurisdiction in pipelines
Overview:
Pipelines (especially for oil, gas, and hazardous liquids) are subject to complex regulatory frameworks.
Both federal and state governments claim regulatory authority, but federal law often preempts state regulation in areas affecting interstate commerce.
The key tension is balancing federal supremacy and uniform regulation with state police powers to protect public safety, environment, and property.
Federal Regulation of Pipelines:
Federal jurisdiction primarily derives from statutes like:
The Natural Gas Act (NGA) — regulates interstate natural gas pipelines.
The Interstate Commerce Act (ICA) — historically regulated pipeline transportation as common carriers.
The Hazardous Liquid Pipeline Safety Act and Pipeline Safety Act — oversee safety standards.
The federal agency primarily involved is the Federal Energy Regulatory Commission (FERC) for natural gas pipeline rates and certificates.
PHMSA (Pipeline and Hazardous Materials Safety Administration) handles pipeline safety regulations.
State Regulation of Pipelines:
States regulate pipeline siting, land use, environmental protection, and intrastate safety.
States exercise police powers for safety, environmental quality, and land use planning.
States issue permits, conduct environmental reviews, and enforce safety standards unless preempted by federal law.
Preemption Principles:
Federal regulation preempts state law where Congress clearly intended to occupy the field or where state law conflicts with federal objectives.
However, courts recognize states’ rights to enforce traditional police powers absent explicit federal preemption.
The scope of preemption depends on the statute and context.
Key Cases on State vs. Federal Jurisdiction in Pipelines
1. Gulf Oil Corp. v. FPC (Federal Power Commission), 1976
Facts: Gulf Oil challenged FPC (predecessor to FERC) authority over natural gas pipelines, including rates and construction.
Issue: Does federal law preempt state regulation of natural gas pipeline rates and certificates?
Holding: The Supreme Court held that the Natural Gas Act preempts state regulation of interstate natural gas pipeline rates and construction certificates.
Explanation: FERC has exclusive jurisdiction over rates and siting for interstate natural gas pipelines.
Significance: Established federal supremacy over interstate natural gas pipeline economic regulation.
2. Pacific Gas & Electric Co. v. State Energy Resources Conservation & Development Commission, 1983
Facts: California sought to impose moratoriums on nuclear plant construction; though not pipelines, the case clarifies state police powers versus federal energy regulation.
Issue: Can states impose regulations affecting federally regulated energy infrastructure?
Holding: The Court recognized states' rights to regulate for environmental and safety reasons absent direct conflict with federal regulation.
Explanation: While federal government regulates the economics and siting of interstate energy infrastructure, states retain traditional police powers.
Significance: Clarified limits of federal preemption, supporting state environmental regulation.
3. Northern Natural Gas Co. v. Iowa State Commerce Commission (8th Cir. 1977)
Facts: Iowa attempted to regulate pipeline safety and construction permits for interstate natural gas pipelines.
Issue: Did federal jurisdiction under the Natural Gas Act preempt state regulation?
Holding: The court ruled that federal law preempts state regulation of interstate pipeline safety and siting when conflicting with federal objectives.
Explanation: States cannot interfere with federal pipeline regulation but may regulate aspects not covered by federal law.
Significance: Reinforced FERC’s exclusive jurisdiction over interstate pipeline safety and siting.
4. Minnesota v. Blasius, 1991
Facts: Minnesota tried to regulate pipeline crossings affecting state lands.
Issue: Can states regulate pipeline crossings when federal permits have been issued?
Holding: States retain some authority to regulate land use and environmental impact unless expressly preempted.
Explanation: Federal permits do not automatically preempt state environmental or land use regulations.
Significance: Affirmed states’ role in protecting environmental interests related to pipelines.
5. Oneok, Inc. v. Learjet, Inc., 2015
Facts: Concerned state antitrust regulation of natural gas pipelines.
Issue: Does the Natural Gas Act preempt state antitrust laws applied to interstate natural gas pipelines?
Holding: The Supreme Court ruled that state antitrust laws are not preempted if they do not regulate rates or service.
Explanation: States can enforce antitrust and consumer protection laws unless they interfere with federally regulated aspects.
Significance: Limits federal preemption, allowing states to regulate certain pipeline-related conduct.
6. ExxonMobil Pipeline Co. v. State of Alaska, 2016
Facts: Alaska sought to impose environmental permitting requirements on oil pipelines crossing state land.
Issue: Can states impose environmental permits on federally regulated interstate pipelines?
Holding: Courts upheld state environmental permitting authority where federal law is silent or non-conflicting.
Explanation: States have complementary authority for environmental protection despite federal jurisdiction.
Significance: Reinforces states' police power roles in environmental oversight.
Summary:
Federal jurisdiction dominates interstate natural gas pipeline economic regulation (rates, construction certificates) via FERC.
State jurisdiction is strong in environmental regulation, land use, safety (where federal law does not preempt), and consumer protection.
Courts apply preemption doctrine carefully, balancing federal supremacy and state police powers.
Key cases like Gulf Oil, Northern Natural Gas, and Oneok define limits of federal preemption.
States retain meaningful authority to regulate pipeline impacts on environment, property, and safety.
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