Two views of Cantwell's gas pipeline reform proposal

A proposal by US Sen. Maria Cantwell (D-Wash.) to amend a section of the Natural Gas Act so interstate gas pipelines would be subject to the same refund procedures as electricity suppliers has drawn differing reactions.

"Simply put, the current system is broken. It favors pipelines over consumers by allowing pipelines to keep overcharges rather than giving consumers their money back when their rates are shown to be excessive," the American Public Gas Association and 19 other groups said in an Apr. 6 letter to Senate Energy and Natural Resources Committee Chairman Jeff Bingaman.

The issue is much more complex, the Interstate Natural Gas Association of America said on Apr. 2. It goes to the core of the relationship between gas pipelines and federal regulators, the ability to raise private capital to expand systems, and the importance of such investments to US energy, environmental and economic goals, INGAA President Donald F. Santa Jr. said.

"The natural gas model of regulation embodied in the NGA is not broken . . . The current regulatory system for natural gas pipelines works well," he said in his own letter to Bingaman.

Key difference

APGA and the other groups said that the Federal Power Act gives the Federal Energy Regulatory Commission authority to order refunds from electricity suppliers from when the complaint was filed. They said that NGA Section 5 states that a gas pipeline rate reduction can occur only after FERC issues an order, which can be years later.

"It makes no sense to allow pipelines to continue to keep billions of dollars of consumers' money, especially in the current economic climate. Instead of going to the pipelines' shareholders, these dollars should be rightfully returned to consumers," they argued.

Santa pointed out that the refund authority which was added to the FPA in 1988, and amended in 2005, was a direct response to complaints about wholesale electricity prices which can increase dramatically and fluctuate due to market volatility.

'Largest portion'

Interstate gas pipeline rates reflect only the cost of transporting the gas, he said. "The largest portion of the consumer bill is the unregulated cost of the gas itself, which would be unaffected by the results of a complaint against an interstate pipeline," he said.

While overall gas pipeline transportation costs are low, delivery system bottlenecks can significantly affect prices and volatility, Santa continued. Interstate gas pipelines are, by their very nature, capital-intensive projects where investors depend on rate certainty to recover their financial commitments, he said.

"A growing number of energy experts advocate using the NGA as a model for reforming the FPA to facilitate expansion of the electric transmission grid. It is easy to understand why," he added. According to FERC, approximately 1,000 miles of high-voltage electric transmission have been built in the US since 2000, compared to more than 10,800 miles of gas transmission pipeline, Santa said.

Contact Nick Snow at nicks@pennwell.com

Related Articles

West Cornwall Township hears from Sunoco Logistics

12/12/2014

Sunoco Logistics Partners outlined its safety systems during a West Cornwall Township meeting in Pennsylvania on Nov. 10.

ETP eyes larger capacity for planned Bakken pipe

12/12/2014 Energy Transfer Partners LP has launched a binding expansion open season to boost capacity on a planned pipeline system that would move oil from th...

Kinder Morgan to deliver natural gas to Corpus Christi Liquefaction

12/11/2014 Kinder Morgan Inc. (KMI) companies Kinder Morgan Texas Pipeline, Kinder Morgan Tejas Pipeline, and Tennessee Gas Pipeline Co. (TGP) have entered in...

Rosneft, Essar sign terms of oil supply agreement

12/11/2014 OAO Rosneft and Essar Energy PLC have signed key terms of an oil supply agreement in New Delhi. Rosneft said shipments to India may begin in 2015.

Barton introduces bill to remove US crude export limits

12/11/2014

US Rep. Joe Barton (R-Tex.) introduced legislation that would remove US crude oil export limits that have been in place for nearly 40 years.

BG agrees to sale of Australian gas pipeline to APA Group

12/10/2014

BG Group PLC agreed to sell its wholly owned subsidiary Queensland Curtis LNG Pipeline Pty. Ltd. (QCLNG) to APA Group for about $5 billion.

More West Texas gathering, processing to come onstream

12/09/2014 EagleClaw Midstream Services LLC, Midland, Tex., has bought natural gas gathering and processing in Reeves County, Tex. The company declined to ide...

Methane controls just part of complete climate strategy, speakers say

12/08/2014 Reducing oil and gas operations’ methane emissions is an essential, but far from the only, part of a comprehensive climate strategy, speakers at a ...

Rail tank car rule could cost economy billions, report says

12/08/2014 The US Pipeline and Hazardous Materials Safety Administration's (PHMSA) proposed rail tank car rule could cost the US economy as much as $60 billio...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

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