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

EnLink agrees to purchase Coronado Midstream for $600 million

02/02/2015 EnLink Midstream has agreed to acquire Coronado Midstream Holdings LLC, which owns natural gas gathering and processing facilities in the Permian b...

So much for cooperation

02/02/2015 Congressional majority leaders and the Obama administration came into 2015 pledging to at least try to be less combative and more cooperative in ru...

Near-term pipeline plans shrink, longer-term growth returns

02/02/2015 Planned pipeline construction to be completed in 2015 slipped 30% from forecasts for 2014, with expected products, crude, and natural gas project c...

Kerry expects to receive other agencies’ Keystone XL reports soon

02/02/2015 US Sec. of State John F. Kerry said he expects to receive other federal agencies and departments’ reports soon on the proposed Keystone XL crude oi...

Russia, Iran outlined joint Caspian position in 2001

02/02/2015 Following are the delineated points of a March 12, 2001, agreement between leaders of Russia and Iran at a meeting on Caspian Sea issues in Moscow

US Senate passes bill approving Keystone XL pipeline project

01/30/2015 The US Senate has passed a bill approving construction of the proposed Keystone XL crude oil pipeline by a 62-36 vote after 3 weeks of debate. Nine...

New Russia-Turkey gas pipeline route approved

01/28/2015

OAO Gazprom reported selection of a route for a gas pipeline across the Black Sea from Russia to Turkey.

PHMSA outlines community steps to reduce pipeline incident risks

01/27/2015 The US Pipeline and Hazardous Materials Safety Administration released a guide to best practices for communities to reduce risks from pipeline inci...

Knight Warrior Eaglebine-Woodbine crude pipeline advances

01/27/2015 Knight Warrior LLC has reached agreements to build its 160-mile, 100,000-b/d pipeline linking the East Texas Eaglebine-Woodbine crude oil play to H...
White Papers

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

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by
Available Webcasts

On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST


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