FERC finalizes rule aimed at making interstate gas prices more transparent

The Federal Energy Regulatory Commission issued a final rule on Nov. 20 which requires posting of important market information to make interstate natural gas prices more transparent by providing information about underlying supply and demand fundamentals.

FERC also issued a notice of inquiry seeking comments on whether certain intrastate pipelines should be required to post details of transactions with individual shippers in a manner comparable to interstate pipelines' reporting requirements.

"As interstate and intrastate pipelines operate seamlessly, often within the same markets, the posting requirements have become necessary because interstate postings alone cannot determine market fundamentals," FERC Chairman Joseph T. Kelliher said.

He said that the final rule was rooted in new authority which FERC received under the 2005 Energy Policy Act. "Significantly, the transparency authority was discretionary: We were authorized to act to improve transparency of wholesale natural gas markets, but not required to act. We were careful in our use of this new transparency authority, soliciting the views of market participants on what types of information would improve market transparency," he said.

FERC also carefully weighed burdens of transparency requirements on market participants, according to Kelliher. The final pipeline posting rule reflects this, since types of information which pipelines must disclose have been adjusted and the rule's regulatory burden has been reduced significantly, he said.

Second use of authority

The final rule is the second exercise by FERC of its new transparency authority with respect to wholesale gas markets, Kelliher said. The agency issued a final rule in December 2007 which was designed to improve price transparency of wholesale natural gas sales, he indicated. EPACT gave the agency similar discretionary price transparency authority over wholesale power markets which it has not yet exercised, he said.

"It is important to recognize that our transparency authority allows FERC to collect information from a much broader universe than our traditional regulated community. We are authorized to collect information from market participants, rather than the more narrow classes of 'natural gas companies' and 'public utilities.' The final rule explains our interpretation of the statutory provisions in this area," Kelliher said.

In a separate comment, Commissioner Philip D. Moeller said that the new final rule should allow FERC and other market observers to better understand supply and demand fundamentals and provide remedies for potentially manipulative activity.

The rule also will make Texas, Louisiana, Oklahoma, Southern California and other important gas markets more transparent, and allow market participants to better understand developing markets, such as the Barnett Shale in the Fort Worth area, because many of those new markets are served by both interstate and intrastate pipelines, he noted.

What final rule does

The final rule, RM08-2-000, establishes new posting requirements under Section 23 of the Natural Gas Act. It requires interstate and certain major non-interstate pipelines to post daily operational information, such as scheduled volumes and design capacity for certain receipt and delivery points, on their publicly accessible websites, according to FERC.

It said that a major non-interstate pipeline is one which is not classified as a natural gas company under the Gas Act and delivers on average more than 50 billion cubic feet of gas annually over a three-year period. Such pipelines now are subject to transparency regulations under Section 23 of the Gas Act, which asserts FERC jurisdiction over any market participant for the purposes of making markets more transparent, the federal energy regulatory agency said.

It said that the rule also would require non-interstate pipelines to post daily specified flow information at each receipt or delivery point with a design capacity of 15 million cubic feet per day or more. Non-interstate pipelines which either are located entirely upstream of a processing or treatment plant, deliver more than 95% of their gas directly to retail end-users as measured by average delivers over the previous three years, or provide storage would be exempt.

The rule also will require interstate gas pipelines to post information regarding the provision of no-notice service, as provided by FERC regulations, the agency said. Interstate pipelines will have 60 days following the final rule's publication in the Federal Register to comply with the rule, while major non-interstate pipelines will have 150 days. This will let them make necessary adjustments without affecting service during the current heating season, FERC said.

It said that the notice of inquiry would explore whether changes are needed to regulations requiring daily postings of regulations by pipelines operating under Section 311 of the Natural Gas Policy Act, and by Hinshaw pipelines, which generally are intrastate systems which provide interstate services.

Contact Nick Snow at nicks@pennwell.com

Related Articles

BLM approves ROW for Elko gas pipeline expansion project

07/07/2015 The US Bureau of Land Management’s Tuscarora, Nev., field office signed a decision record approving a right-of-way for Paiute Pipeline Co.’s (PPC) ...

Obama urged by IPAA president to lift ban on US crude exports

07/07/2015 Commending the administration for its actions allowing some condensate to be exported as a petroleum product, Independent Petroleum Association of ...

MARKET WATCH: NYMEX, Brent oil prices take dive on world oil oversupply concerns

07/07/2015 US light, sweet crude oil prices plummeted more than $4/bbl on the New York market July 6, marking a 5-month low, while Brent crude oil prices on t...

Woodside lets contracts for Browse LNG project

07/06/2015 Woodside Petroleum Ltd. has let more contracts for the Browse floating LNG project offshore Western Australia. The contracts, awarded to a Technip-...

Emerging producers offered guidelines for governance

07/06/2015 Like most worthy endeavors, governing oil and gas activity at the national level is easier said than done-especially where oil and gas never before...

The price of oil and OPEC-history repeating?

07/06/2015 The world oil market today is characterized by a standoff between the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC producers a...

US House committee leaders send letters to Plains, PHMSA about leak

07/06/2015 US House Energy and Commerce Committee leaders from both parties asked Plains Pipeline LP and the US Pipeline and Hazardous Materials Safety Admini...

MARKET WATCH: NYMEX oil prices fall on rise in US rig count

07/06/2015 US light, sweet crude oil prices edged down going into the July 4 holiday weekend on the New York market after Baker Hughes Inc. reported July 2 th...

Total unveils development sites for renamed Papua LNG project

07/06/2015 Total SA and its joint venture partners Oil Search Ltd. and InterOil have announced key infrastructure sites for development of the proposed Elk-An...
White Papers

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

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
Available Webcasts


Operating a Sustainable Oil & Gas Supply Chain in North America

When Wed, Oct 7, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.

register:WEBCAST


The Resilient Oilfield in the Internet of Things World

When Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.

register:WEBCAST



On Demand

Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors

register:WEBCAST


Driving Growth and Efficiency with Deep Insights into Operational Data

Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

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