FERC to call for comment on Sempra gas petition


Kate Thomas
OGJ Online

Federal Energy Regulatory Commission officials Friday were reviewing Sempra Energy's emergency request to reinstate price caps on short-term releases of interstate gas pipeline capacity for service to the California border until March 31, 2001.

In a Thursday filing, Sempra Energy said high-priced capacity charges have helped drive natural gas prices at the California border to $50/Mcf, more than 10-fold during the past year. Art Lawson, a spokesman for Sempra unit San Diego Gas & Electric Co. (SDG&E), said the gas itself costs about $8.50/Mcf and the "rest" is attributable to the cost of buying capacity on the pipelines. He could not say how much firm capacity the company holds on pipelines serving California.

Under FERC Order No. 637, the agency experimentally lifted price caps on secondary market capacity until Sept. 1, 2002, because of concerns the value of pipeline capacity was being unnecessarily restrained by the FERC�s cost-of-service price cap.

A FERC spokeswoman said the agency expected to issue a call for comments on the Sempra petition late Friday or early Monday. It is unclear who would be most affected by a price cap, but analysts say the problem has been exacerbated because there are fewer pipelines serving California than the Midwest and Northeast.

Enron Corp., which owns Transwestern Pipeline Co., had to read the Sempra petition before commenting on it, a spokeswoman said. El Paso Energy Corp., which also serves California, did not respond to requests for comment about the potential effect of the Sempra filing.

SDG&E's FERC filing states that the market for interstate pipeline capacity is showing significant distortions. Edwin Guiles, Sempra�s group president of regulated operations, said in a statement that California has been hit particularly hard because of sky-high pipeline capacity costs to the state's utilities.

The vast majority of the price increase is coming from the increased price for getting gas from the supply basins to the California border, Sempra executives said. And, they said, volatile futures market for natural gas currently point to even sharper price increases later this winter.

About one-third of the power plants in California are natural gas-fired and, with winter demand for heating on the rise, tight gas supplies have worsened the situation.

SDG&E is proposing a capacity price cap that would cut gas prices about 80% to less than $10/Mcf, the company said. The utility has been working to blunt the impact of high natural gas prices, but Guiles said it still cannot account for the high cost of gas delivery to the state border.

Related Articles

Noble Energy’s budget down 40% in 2015

02/20/2015 Noble Energy Inc., Houston, plans to spend $2.9 billion in 2015, representing a 40% reduction from 2014. The company also reported full-year 2014 n...

NGL Energy expands DJ basin crude pipeline to 200,000 b/d

02/19/2015 NGL Energy Partners LP will increase the capacity of its Grand Mesa crude pipeline to at least 200,000 b/d by using 20-in. OD pipe. Volumes committ...

Murkowski, Heitkamp lead Senate call for crude exports to Mexico

02/18/2015 US Sens. Lisa Murkowski (R-Alas.) and Heidi Heitkamp (D-ND) led a coalition asking US Sec. of Commerce Penny Pritzker in a Feb. 18 letter to encour...

BP Energy Outlook projects global energy demand to jump 37% by 2035

02/17/2015 Global demand for energy is expected to rise by 37% from 2013 to 2035, or by an average of 1.4%/year, due in large part to ongoing economic expansi...

Montana governor wants PHMSA to beef up pipeline enforcement in state

02/17/2015 Citing a Jan. 17 leak of 1,200 bbl of crude oil from a ruptured pipeline in eastern Montana, Gov. Steve Bullock (D) asked US Sec. of Transportation...

Derailed West Virginia oil train carried Bakken crude

02/17/2015

A large-scale cleanup and investigation have launched following the Feb. 16 derailment of a CSX crude oil train near Mount Carbon, W.Va.

Phillips 66 Partners to buy pipeline systems’ interests for $1 billion

02/16/2015 Phillips 66 Partners LP has reached agreement with Phillips 66 to acquire Phillips 66’s interests in three pipeline systems for a total of $1.01 bi...

Bear Head LNG exempted from 2012 Canadian environmental act

02/16/2015 Liquefied Natural Gas Ltd.’s wholly owned subsidiary Bear Head LNG Corp. received notice from the Canadian Environment Assessment Agency (CEAA) tha...

Alberta's premier seeks more North American energy integration

02/16/2015 Better policy integration and cooperation will be needed for Canada, Mexico, and the US to fully realize the North American energy renaissance's po...
White Papers

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by
Available Webcasts


OGJ's Midyear Forecast 2015

When Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

When Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST



On Demand

Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected