                                   PUBLISH

                        UNITED STATES COURT OF APPEALS
Filed 12/23/96
                                TENTH CIRCUIT



 FIRST NATIONAL OIL, INC.,

                 Petitioner,
        v.                                          No. 95-9531
 FEDERAL ENERGY REGULATORY
 COMMISSION,

                  Respondent.
 -------------------------

 PANHANDLE EASTERN PIPE LINE
 COMPANY; INDIANA GAS COMPANY, INC.;
 OKLAHOMA INDEPENDENT PETROLEUM
 ASSOCIATION; PANHANDLE FIELD
 SERVICES COMPANY; COLORADO
 INTERSTATE GAS COMPANY,

                 Intervenors.
 FIRST NATIONAL OIL, INC.,

               Petitioner,
        v.                                                       No. 95-9553
 FEDERAL ENERGY REGULATORY
 COMMISSION,

                  Respondent.
 -------------------------

 COLORADO INTERSTATE GAS COMPANY;
 INDIANA GAS COMPANY, INC.; CITIZENS
 GAS & COKE UTILITY; PANHANDLE FIELD
 SERVICES COMPANY; PANHANDLE
 EASTERN PIPE LINE COMPANY;
 OKLAHOMA INDEPENDENT PETROLEUM
 ASSOCIATION; EAST OHIO GAS COMPANY;
 PANHANDLE CUSTOMER GROUP;
 MICHIGAN CONSOLIDATED GAS
 COMPANY,

               Intervenors.




                 APPEAL FROM ORDERS OF THE FEDERAL
                    ENERGY REGULATORY COMMISSION
             (NOS. CP90-1050-000, -001, -002, -006, AND CP94-151-004)


Maria M. Seidler, Tulsa, Oklahoma, for Petitioners.

Edward S. Geldermann, Attorney (Susan Tomasky, General Counsel; Jerome M. Feit,
Solicitor; and Joseph S. Davies, Deputy Solicitor, with him on the briefs), Federal Energy
Regulatory Commission, Washington, D.C., for Respondents.




                                           -2-
Brian D. O’Neill, LeBoeuf, Lamb, Greene & MacRae, Washington, D.C. (David P.
Sharo, LeBoeuf, Lamb, Greene & MacRae, Washington, D.C.; Merlin E. Remmenga,
Panhandle Eastern Pipe Line Company, Houston, Texas; and Dennis J. Kelly, Panhandle
Field Services Company, Denver, Colorado, with him on the briefs), for Intervenors.


Before SEYMOUR, ANDERSON, and BRORBY, Circuit Judges.


ANDERSON, Circuit Judge.




       Petitioner First National Oil, Inc. (“First National”) seeks review of certain orders

issued by the Federal Energy Regulatory Commission (“FERC” or “Commission”). See

Panhandle Eastern Pipe Line Co., 70 F.E.R.C. ¶ 61,178 (preliminary determination on

abandonment application and declaration of jurisdictional status of facilities), modified,

71 F.E.R.C. ¶ 61,201 (1995); Panhandle Eastern Pipe Line Co., 71 F.E.R.C. ¶ 61,336

(order authorizing refunctionalization and abandonment of facilities), reh’g denied, 73

F.E.R.C. ¶ 61,137 (1995). First National contends that the Commission improperly

permitted Panhandle Eastern Pipe Line Company (“Panhandle”) to abandon certain

natural gas gathering facilities by “spinning down” those facilities to its wholly-owned

subsidiary, Panhandle Field Services Company (“Field Services”). We hold that First

National lacks standing to bring this petition because it has not been “aggrieved” by the

orders within the meaning of section 19(b) of the Natural Gas Act (“NGA”), 15 U.S.C.

§ 717r(b).


                                             -3-
                                     BACKGROUND

       Panhandle owns and operates an interstate natural-gas pipeline. Prior to the orders

cited above, Panhandle also provided gathering services through facilities located in

Colorado, Kansas, Texas, and Oklahoma (“the West End”). Through these gathering

facilities, Panhandle collected gas from local wellheads and prepared it for delivery into

the interstate pipeline.

       In response to a changing regulatory environment, many interstate pipeline

companies, including Panhandle, decided it was no longer advantageous to offer both

gathering and transportation services. Several pipelines have sought authorization from

the FERC to abandon gathering facilities, and transfer the facilities to corporate

subsidiaries (“spin down”). A principal purpose behind spin downs is to create affiliate

gathering companies not subject to FERC jurisdiction.1

       On December 21, 1993, Panhandle filed a petition with the FERC requesting

authorization to abandon its West End gathering facilities by transferring them to Field

Services. R. Vol. IV. Concurrently, Field Services sought a declaratory ruling that its

ownership and operation of the transferred gathering facilities would be exempt from

FERC jurisdiction under section 1(b) of the Natural Gas Act (“NGA”), 15 U.S.C.

§ 717(b).




       For a thorough explanation of the spin down phenomenon, see Conoco Inc. v.
       1

F.E.R.C., 90 F.3d 536 (D.C. Cir. 1996).

                                            -4-
       First National, as well as many other parties, intervened in the Panhandle

proceedings to protest the proposed spin down. First National is a natural gas producer

with wellheads within the West End system. First National sells gas from these wellheads

to independent marketers. These marketers then move the gas through the West End

gathering facilities in preparation for its shipment on Panhandle’s interstate pipeline.

       First National’s opposition to the proposed spin down was based on its fear that

Field Services, as Panhandle’s non-jurisdictional affiliate, would exploit its alleged

monopoly control over certain West End gathering facilities. First National asserted that

such exploitation previously had been denied to Panhandle only by FERC regulation.

First National also alleged that Field Services was colluding, and would continue to

collude, with other Panhandle affiliates--Centana Gathering Company and Centana

Energy--to manipulate the price and availability of West End gathering services.

       The Commission rejected First National’s protests, as well as those of the other

intervenors, and issued a preliminary determination approving the abandonment and

transfer of the West End gathering facilities from Panhandle to Field Services, and

declaring that the transferred facilities were exempt from FERC jurisdiction. 70 F.E.R.C.

¶ 61,178. However, as a precondition to a final order, the Commission required, among

other things, that Field Services offer a two-year default contract to Panhandle’s existing

gathering customers. 70 F.E.R.C. at 61,587. The Commission required that the default

contract contain “terms and conditions consistent with those under which [Panhandle]


                                             -5-
provides gathering service to its customers.” Id. Rates charged under the default contract

had to be the same as those previously charged by Panhandle. Id. The Commission

explained that the availability of the default contract would allow existing customers a

reasonable time in which to adjust to the spin down, id., and would “allow states

sufficient time to implement policies deemed necessary in the absence of federal

regulation of gathering.” 71 F.E.R.C. at 61,731.2 Subsequently, the Commission

approved the default contract prepared by Field Services, and issued final authorization

for the spin down. 71 F.E.R.C. ¶ 61,336.

       Because First National sold its gas to a marketer, it was not an existing gathering

customer of Panhandle, but Field Services offered First National the default contract

anyway. R. Vol. II at 2709. First National refused the contract, and instead requested a

reconsideration and rehearing of the Commission’s previous orders. R. Vol. II at 2695.

In that request, First National renewed its protests regarding the alleged collusion

between Panhandle affiliates. First National also asserted that the default contract would

not, in fact, provide for the same quality of service previously provided by Panhandle.

The Commission denied the request for reconsideration and rehearing, 73 F.E.R.C.

¶ 61,137, and this appeal ensued.


       2
        As an alternative to the default contract, the Commission provided that Field
Services could obtain final authorization by demonstrating it had successfully negotiated
individual contracts with the existing customers. 70 F.E.R.C. at 61, 587. Apparently,
nearly all of the existing customers who have continued dealing with Field Services do so
under default contracts.

                                             -6-
                                       DISCUSSION

       Section 19(b) of the NGA allows only parties “aggrieved” by FERC orders to seek

review in the court of appeals. 15 U.S.C. § 717r(b); Colorado Interstate Gas Co. v.

F.E.R.C., 83 F.3d 1298, 1300 (10th Cir. 1996). To be considered “aggrieved” under

section 19(b), a party must demonstrate a “present and immediate” injury in fact, or “at

least . . . a looming unavoidable threat” of injury, as a result of the FERC order. Williams

Gas Processing Co. v. F.E.R.C., 17 F.3d 1320, 1322 (10th Cir. 1994) (quoting National

Ass’n of Regulatory Util. Comm’rs v. F.E.R.C., 823 F.2d 1377, 1381 (10th Cir. 1987)).

The petitioner bears the burden of alleging facts sufficient to prove a concrete, perceptible

harm of a real, non-speculative nature. Colorado Interstate, 83 F.3d at 1301.

Furthermore, it is not sufficient for the petitioner to show merely that harm will result;

the petitioner must show that judicial abstention would result in irreparable injury. Id.

       We find no evidence in the record that First National has suffered, or will

unavoidably suffer, an economic injury as a result of the Commission’s orders. First

National was not a gathering customer of Panhandle prior to the spin down, and it is not

now a gathering customer of Field Services. Instead, First National continues to sell its

gas to independent marketers and, under the default contract, these marketers continue to




                                             -7-
receive the same gathering rates and services from Field Services as they previously

received from Panhandle.3

       Apparently, First National is interested in negotiating its own gathering contract

with Field Services, and complains that the Commission’s orders make it impossible to

obtain satisfactory terms. Yet, First National has always had the option of accepting the

default contract, which would ensure the same service and rates provided by Panhandle

prior to the Commission’s orders. R. Vol. II at 2708-12.4


       3
         During the pendency of this appeal, the D.C. Circuit held that the Commission
does not have the authority to require non-jurisdictional gatherers to offer default
contracts. Conoco, 90 F.3d at 552. That ruling, however, does not affect this appeal.
Unlike the parties in Conoco, Panhandle and Field Services did not challenge the
Commission’s authority to require the default contract, and many default contracts have
already been executed. Furthermore, at oral argument, counsel for Field Services
affirmed that Field Services has “embraced” the default contract, and that Field Services
still offers shippers the option of extending the contract.
       4
         First National contends in its briefs that the default contract does not, in fact, offer
the same service previously provided by Panhandle. First National complains that the
contract does not provide the same balancing services, and that “producers are actually
assuming more operational risk and increased administrative costs, while paying higher
rates.” Appellant’s Br. at 27. We find no support in the record for these contentions.
First National cites only to unsupported assertions of counsel, and to items not included in
the record provided to us. Indeed, the only record evidence on the issue that we have
located demonstrates that services provided under the default contract do not differ in any
material way from those previously provided by Panhandle. R. Vol. II at 2708-12 (Aff. of
William D. Gifford).
        Because shippers now deal with Field Services for gathering, and Panhandle for
transportation, these shippers may, of course, incur some slight increase in the
administrative costs associated with transacting with two companies instead of one.
However, First National provides no evidence establishing the amount of such additional
costs, if any, and we have no reason to assume they would be anything other than de
minimis.

                                              -8-
       Finally, First National’s fear that Field Services will behave in a monopolistic and

discriminatory manner at the end of the default term is only speculation. While First

National contends that such behavior is likely, it has not persuaded us that it is

unavoidable. This court has already stated that speculation regarding the future behavior

of a non-jurisdictional gathering affiliate is insufficient to confer standing. In Williams

Gas Processing, we explained:

       [Petitioners’] fear that Williams will charge unreasonable rates is only
       speculation for now, and even if it materializes, they can challenge the
       reasonableness of Williams’s rates under section 5, 15 U.S.C. § 717d. At
       most, the Commission’s orders may make bringing a section 5 action less
       convenient . . . .

               We hold that this alleged inconvenience in seeking a remedy for a
       possible injury is not the kind of present or unavoidable, concrete
       “aggrievement” entitling [Petitioners] to challenge the Commission’s
       orders.

17 F.3d at 1322-23. For the same reasons, we hold that First National is without standing

to bring the present petition. As the Commission explained, should First National suffer

some future harm as the result of a gatherer’s unlawful activities, First National may

resort to state law, federal antitrust law, a section 5 proceeding, or any other available

remedy.

       Petition DISMISSED.




                                             -9-
