FERC denies request for increased jet fuel deliveries

The U.S. Federal Energy Regulatory Commission (FERC) rejected a petition to increase jet fuel shipments to Reno, Nev., but decided late on Aug. 4 to hold a conference to look for ways to address airport shortages. The decision was in response to a late-July petition from Delta Air Lines, Federal Express Corp. and other carriers seeking emergency jet fuel shipments to the Reno-Tahoe International Airport, which they said has been hit with shortages that could spread to other area airports. [caption id="attachment_71169" align="alignright" width="450"] Photo/Canstock[/caption] The air carriers asked FERC to use emergency powers under the Interstate Commerce Act to direct pipeline company SFPP, a Kinder Morgan subsidiary, to temporarily give priority treatment to jet fuel shipments on its North Line (OR21-10). The Association of Oil Pipelines, Chevron, Marathon Oil and Phillips 66 urged FERC to proceed cautiously on the request in order to prevent disruption to other essential products flowing through the SFPP line. The American Gas Association, which represents power plants that burn natural gas, intervened in the proceeding. The carriers sought an additional 541 barrels of jet fuel per day through Sept. 6, saying it is needed to prevent disruptions to air travel, critical air freight transportation and firefighting efforts. Without the extra supplies, flights from the airport will be reduced, according to the carriers. In its decision, FERC recognized that the jet fuel allocations on the North Line, which are set by historical usage, were reduced because of the effects of the COVID-19 pandemic, but said the situation isn’t an emergency. FERC has used its emergency authority under section 1(15) of the ICA only once, according to the agency. That case involved a propane shortage in 2014 that affected 35 states. “Here, in contrast, the request appears primarily designed to address a commercial issue,” FERC said. “Movants have not sufficiently demonstrated that the circumstances present here rise to the level of a public health emergency that warrants extraordinary relief.” Increasing the allocation of jet fuel on the North Line would displace diesel and gasoline shippers on SFPP, as well as disrupt pipeline operations, FERC said. FERC opened an administrative docket for a conference to address current and long-term issues on the North Line (AD21-16), and FERC staff will participate in the conference, set to be held within seven days. One of the key issues likely to be discussed is how multiproduct pipelines like SFPP allocate capacity. Typically, they base their capacity allocations on a rolling 12-month history of shipments, according to the carriers. Because of the pandemic, airlines in the last year used much less fuel, which is reducing their current allocations to less than what they need amid a growing economy, Airlines for America and the others contend. FERC urged the carriers to work with SFPP and other shippers to resolve the issues that led to the petition. Story by Ethan Howland for The Foster Report . The Foster Report is a Royal Media publication.

FERC denies request for increased jet fuel deliveries

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