NGSA, INGAA concur on blanket certificate proposals

Sept. 19, 2006
US natural gas producers and pipelines have worked out the minor differences between their proposals to improve blanket certificate procedures, the Natural Gas Supply Association and the Interstate Natural Gas Association of America jointly announced Sept. 19.

Nick Snow
Washington Correspondent

WASHINGTON, DC, Sept. 19 -- US natural gas producers and pipelines have worked out the minor differences between their proposals to improve blanket certificate procedures, the Natural Gas Supply Association and the Interstate Natural Gas Association of America jointly announced Sept. 19.

"In sum, our organizations, which are sometimes at odds on major issues before the [Federal Energy Regulatory] Commission, remain steadfast in our mutual support for reforms that facilitate natural gas infrastructure development," NGSA Pres. R. Skip Horvath and INGAA Pres. Donald F. Santa Jr. said in a joint letter to FERC Chairman Joseph T. Kelliher.

The two trade associations jointly petitioned FERC in November 2005 to initiate a rulemaking to improve blanket certificate procedures by extending the authority to interstate systems that previously were not eligible.

Companies that hold blanket certificates can improve or upgrade existing facilities meeting certain criteria without obtaining a case-specific authorization under Section 7 of the Natural Gas Act.

FERC responded with a notice of proposed rulemaking (NOPR) in June. NGSA and INGAA separately advised the commission on Aug. 25 that "practical considerations required separate filings," Santa and Horvath said.

"We urged you, however, not to construe this as a sign of departure from the pipeline-producer joint consensus outlined in our original joint petition for rulemaking," they said.

Agreement reached
The two associations have since had time to review each other's comments, which agreed on major issues such as urging FERC to liberalize restrictions on blanket processing.

NGSA and INGAA also examined differences in their comments "that are more in the nature of degree or importance rather than principle" and reached agreements on four main points:

-- Higher blanket dollar limits. INGAA, in its comments, urged FERC to adopt temporary cost limits previously established in response to Hurricanes Katrina and Rita: $16 million for automatic projects and $50 million for prior notice projects. NGSA now agrees that the limits should govern access to blanket procedures, subject to the index proposed in the NOPR.

-- Notification provisions. NGSA objected to FERC's proposal to extend a protest deadline to 60 days from 45 days. INGAA did not object to the 60-day protest limit, subject to the increased cost limits it proposed, but did object to the proposal to increase landowner notice of construction to 45 days from 30 days for automatic authorization projects. The associations now consider both notification proposals ill-advised and urged FERC to reconsider the need for increased notification.

-- Automatic processing. Both associations supported FERC's proposals to open mainline and some LNG-related projects to prior notice blanket proceedings. But they also urged the commission to go further and allow blanket certification of new takeaway lateral facilities to connect existing LNG terminals with existing pipelines. INGAA also urged FERC to remove a proposed restriction on allowing automatic processing of mainline and LNG-related facilities that meet whatever cost criteria are adopted. NGSA now agrees with INGAA that these proposed restrictions aren't necessary.

-- Environmental conditions. INGAA said that some of FERC's proposed new environmental regulations were ill-advised for several reasons, a position that NGSA now supports.

Horvath and Santa's letter to Kelliher came nearly 2 weeks after the American Public Gas Association questioned the necessity of revising blanket certificate regulations for gas infrastructure projects.

APGA, which represents municipal and other publicly owned local distribution companies, said in comments filed Sept. 6 that the Natural Gas Act's Section 7 procedures are in place to protect the public interest.

It also said that where a project may be built by prior notice only, "it is very important that the FERC staff use the prior notice period to review the applications in order to bring to bear their expertise on projects that will otherwise go unexamined."

Contact Nick Snow at [email protected].

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