U.S. INTERSTATE PIPELINES BEGIN 1993 ON UPBEAT

Warren R. True
Pipeline/Gas Processing Editor

Interstate natural gas and liquids pipeline companies in the U.S., which operate the world's largest system, began 1993 amid clear signs of recovering from pinched revenues and incomes of recent years.

This was especially true for the gas-pipeline industry which has been struggling since 1984 to restructure itself under governmental mandate and adjust to the more competitive, post-Order 636 marketplace.

For 1992 operations-the most recent full year for which data are available, these adjustments were evident primarily in income figures for companies in both industry segments. Incomes, operating revenues, and other information are annually reported to the U.S. Federal Energy Regulatory Commission (FERC; company tables at the end of this report).

Although operating revenues for gas pipelines last year continued declines evident in recent years (Fig. 1), improved incomes from those revenues suggest more efficient operations.

Reflecting the changed nature of business for interstate gas pipelines, they continued to shift their operations towards transportation only and away from sales. Volumes of gas moved for others continued increasing; volumes sold continued to decline.

These data along with others from annual reports filed with the FERC are tracked in this exclusive annual Oil & Gas Journal Pipeline Economics Report.

Additionally, more information is provided in this year's report on how much natural-gas pipeline companies actually spent to build pipelines and compressor stations compared to what had been estimated at the time the projects were set before the FERC for approval.

CHANGE SLOWS

The pace at which interstate natural-gas pipelines continued to shift their historic roles from being merchants of gas to transporters slowed somewhat in 1992, but the trend is irreversible.

Volumes of gas moved for others by these companies last year increased by more than 4% for major companies and by more than 10% overall. This follows an increase in 1991 of more than 6% for majors and almost 8% for all companies.

Gas sold by these same companies, however, declined again last year: by more than 24% for majors and more than 8% overall.

In 1991, the decline was 11% for majors and 9% for all companies reporting; in 1990, 17% for majors and 20% for all companies.

For common-carrier oil pipelines, moving both crude oil and product, operations continued to be sluggish: both total deliveries and trunkline traffic (barrel-miles: the number of barrels times the number of miles of pipeline used) were flat.

But what the companies made on those operations improved. Revenues increased over those for 1991 by more than 5%, incomes by more than 15%.

On the construction front, U.S. gas-transportation projects proposed to the FERC for the 12-month period ending June 30, 1993 (Tables 2 and 3) amounted to slightly less than 2,000 miles of new or replacement line pipe and slightly more than 371,000 hp of new or additional compression.

Large portions of these proposals are to supply gas to Florida and to expand a major network in California.

Gas-pipeline construction in the U.S. seems to be holding in a pattern of reduced activity compared with only a few years ago. Once major expansions to serve Florida markets have been installed, neither current demand nor price augurs a return to such large projects as were proposed in the late 1980s.

Nevertheless, public and regulatory pressures for cleaner air will continue, and natural gas continues to displace dirtier hydrocarbon fuels such as coal and heavy fuel oil.

Electric-power generation markets hold the greatest potential to spur growth in natural-gas demand. But the natural-gas industry as a whole-producers, transporters, distributors-must continue to convince this market of the fuel's dependability. Many electric utilities continue to distrust natural gas, remembering curtailments of the not-too-distant past.

Cost figures for gas pipeline and compressor-station construction projects are taken from estimates accompanying companies' applications to the FERC for approval to build the systems.

And this year, Oil & Gas Journal continues exclusive coverage begun in 1990 of the actual costs for some of these projects proposed much earlier than the dates of their completion (Tables 4 and 5).

INCOMES AND MILEAGE

In 1991, one-time charges among a handful of major natural-gas pipeline companies and a general decline for all companies sent net incomes plummeting for regulated major and non-major interstate natural-gas pipeline companies.

But last year, those incomes for both natural gas and liquids pipeline companies recovered.

FERC annual reports (Forms 2 and 2A) for all natural-gas pipeline companies show that net income increased last year to more than $1.7 billion from nearly $278 million for 1991. This follows a combined net income for the industry in 1990 of $2.8 billion.

Operating revenues, however, continued to decline: for majors, by nearly $2.8 billion (-13%) to almost $18.6 billion; overall, by $1.7 billion (-6.8%) to nearly $23.7 billion.

Operating revenues for major and nonmajor natural-gas transmission companies were falling beginning with 1983 until a slight uptick for 1988 (Fig. 1).

Similarly, net incomes fell in 1983 and for 2 years beginning with 1986 and 1987. The increase in 1989 was the largest of the decade, eclipsing a big jump in 1983. The decrease for 1991 was the largest since 1985.

In 1991, the drop in net incomes was caused by several adjustments to operating incomes by a few major companies that reflected amounts set aside to cover corporate restructuring costs or to remediate environmental damages as well as shifts in income-generating properties:

Columbia Gas Transmission Corp., for example, operating in 1991 under protection of Chapter 11 of the U.S. Bankruptcy Code, reported a net loss of $669.7 million. For 1992, Columbia Gas reported a net income of $45 million.

Tennessee Gas Pipeline, which in 1990 had reported a net income of $638.7 million, for 1991 had a net loss of $340.3 million, representing a turnaround in net income in a year of almost $1 billion.

For 1992, Tennessee Gas reported only $7 million in net loss.

Transcontinental Gas Pipeline Corp., which reported a net loss of $59.7 million for 1991, realized a net gain for 1992 of $73.5 million, a turnaround of more than $150 million.

Similarly, Texas Eastern Transmission Corp. reported a net loss for 1991 of $45 million but saw a net income for 1992 of nearly $150 million.

Its sister company, Panhandle Eastern Pipe Line Co., went from earning $10.7 million in 1991 to earning nearly $60 million in 1992.

Running counter to this trend of recovery, however, was United Gas Pipe Line Co., now Koch Gateway Pipeline Co. and a unit of privately held Koch Industries Inc., Wichita (OGJ, Aug. 30, p. 28).

United Gas Pipe Line reported a $12 million loss for 1991; for 1992, the company lost more than $253 million.

Overall, 60 natural-gas pipeline companies-major and nonmajors-reported improvements in net incomes for 1992 over 1991. For 1992, 22 natural gas pipeline companies actually reported net losses, down from 29 for 1991.

Petroleum-liquids pipeline companies' net incomes in 1992 also reflected a gain, of nearly $1.8 billion (15.2%) on operating revenues that increased by more than $355 million (5.2%).

That increase in revenues bucks a trend since 1985. The increase in income continues a zig-zag pattern evident for more than a decade (Table 1).

Pipeline mileage operated by major natural-gas companies declined last year compared with 1991, by 10.4% overall (more than 26,000 miles).

For major and nonmajor pipeline companies, there was little change (-7,496 miles operated; -2.7%) in the U.S. interstate gas-pipeline system for 1992 compared with 1991.

Liquid pipeline companies showed little change (-5.3%) in total pipeline mileage utilized during 1992 compared with 1991. Mileage for crude-oil lines fell the most; all categories-gathering, crude-oil trunk and product trunk-showed reduced mileage operated.

Total mileage reported for 1992 was 431,735 (Table 6).

CONSTRUCTION PACE

For the 12-month period ending June 30, 1993, slightly less than 2,000 miles of new, looping, or replacement pipeline were proposed to the FERC; only one project was proposed for offshore U.S. waters (Table 2).

This total mileage was proposed in 88 construction spreads.

For the year-earlier 12-month period of July 1, 1991, to June 30, 1992, more than 2,300 miles of pipeline were proposed in 131 projects. None was proposed for offshore.

Oil & Gas Journal's Worldwide Construction Report (OGJ, Oct. 18, p. 90) lists 103 individual pipeline projects of U.S. pipeline construction reported by surveyed companies as either proposed, planned, or under way.

By comparison, OGJ's Oct. 26, 1992, construction report (p. 118) listed 128 U.S. pipeline projects proposed, planned, or under way.

Pipeline construction in the U.S., especially of major gas lines, has slowed considerably over the past 2-3 years, with activity to supply Florida appearing to hold the most promise for the middle years of the decade.

Nevertheless, after completing its $432 million, 433-MMcfd expansion last spring (OGJ, Nov. 15, p. 49), Northwest Pipeline has announced vet another expansion (OGJ, Aug. 30, p. 28) that will add 263.5 MMcfd.

The long-delayed Altamont project to move Canadian gas from Wild Horse, Mont., to near Opal, Wyo., and then into Kern River pipeline, remains on the shelf.

Compressor-station costs make up another major cost element of natural-gas pipelines. Table 3 lists 33 land compressor projects for new stations or additions to existing ones.

FERC applications for these projects cover the same period as for pipelines: July 1, 1992, to June 30, 1993.

Compressor-station applications listed more than $500 million in total cost estimates for more than 371,000 hp of new or additional compression.

Cost estimates for new land compressor stations range from a low of $773/hp for an additional 25,000-hp in Alabama to a high of $4,429/hp for a new 1,840-hp compressor station in Pennsylvania.

Cost-per-horsepower figures show no particular correlation with compressor-station size or location.

As an aid in determining the detailed cost estimates for each major element in pipeline spread and compressor-station construction, several tables detailing specific projects are included in this report.

These give cost breakdowns for each major component in a construction-cost estimate.

They cover cost information from the FERC applications for the 1992-93 period surveyed and listed in Tables 2 and 3.

These tables represent both a variety of geographic locations in the U.S. and pipeline and compressor stations for both land and offshore facilities.

COMPLETED PROJECT COSTS

Costs listed in Tables 2 and 3 are estimates for projects proposed to the FERC for construction approval. Not all projects proposed are built, however.

Actual costs for a project which is approved and built must be filed with the FERC within 6 months after the line's completion. For a pipeline, that point is determined by the line's successful hydrostatic test, its commissioning date.

Tables 4 and 5 shows such actual costs for pipeline and compressor-station projects completed and reported to the FERC for the period July 1, 1992, to June 30, 1993.

Some of these projects may have been proposed and even approved much earlier than the surveyed period. Others may have been filed for, approved, and built less than a year before completion.

And in its initial filing, each pipeline project may have been reported in spreads. (That's how projects are broken out in Table 2.)

Completed-cost information, however, is reported to the FERC for an entire filing, separating only pipeline from compressor-station (or metering site) costs.

Overall, actual pipeline-construction costs exceeded anticipated ones by almost $8.5 million (4.6%). This was due to greater than anticipated labor costs for those projects reported to the FERC during the 12-month period.

For the projects reported, actual labor costs exceeded estimated ones by more than $20 million (23.3%). R.O.W. (including surveying) and damages were overestimated by more than $663,000 (7.9%). Miscellaneous items actually came in less than estimated, by $9.8 million (-29.6%).

Estimates for costs of materials were closer to actual. Operators overestimated material costs by slightly more than $3 million (5.8%).

Cost-per-mile estimates fell shy of actual figures by $44,000/mile.

As Table 5 indicates, actual total costs for installing compression exceeded estimated ones by more than $23 million (15.4%).

As with the cost of building pipelines, the actual cost of labor for compressor-station construction provided the greatest variation from its estimate, exceeding what had been estimated by $16.6 million (47%).

But estimates for land missed the mark by more than $180,000 (33%) and for miscellaneous costs by $6.5 million (26%). Average cost per unit of horsepower installed exceeded estimates by $211 (15.4%).

U.S. INTERSTATE NETWORK

Revenue, income, and mileage changes cited earlier are evident on the pipeline-company tables.

As stated, these data are based on annual reports of regulated interstate pipeline companies and provide a variety of detail on each of them, including pipeline mileage, crude oil and refined-products deliveries, natural- gas sales and gas transported for other companies, operating revenues, and net incomes.

Beginning with the 1988 Pipeline Economics Report (OGJ, Nov. 28, 1988, p. 33), the Journal began tracking volumes of gas transported for others by major interstate pipeline systems.

This provides a method of keeping track of the changing nature of the U.S. gas-transmission industry.

SYSTEM UTILIZATION

Comparisons between any years of U.S. petroleum and natural-gas pipeline mileages must be made with care for two reasons:

The number of companies required to file reports with the FERC varies each year.

And the FERC's system for classifying interstate natural-gas pipeline companies chanced with the 1984 reporting year (OGJ, Nov. 25, 1985, p. 55).

Since 1984, FERC-regulated gas pipeline companies have been classified as "major" or "nonmajor" based on total natural-gas transmissions for each of the 3 immediately previous reporting years. (See FERC Accounting and Reporting Requirements for Natural Gas Companies, para. 20-011.)

Major pipeline companies are those whose combined gas sold for resale and gas transported or stored for a fee exceeded 50 bcf (at 14.73 psi and 60 F.) in each of the 3 previous calendar years.

Nonmajors are companies not classified as majors and which have had total gas sales of volume transactions exceeding 200 MMcf (at 14.73 and psi 60 F.) in each of the 3 previous calendar years.

One effect of this change has been that companies classified as nonmajor are exempt from filing certain data. Chief among the excluded figures are mileage and gas-sales or transportation figures.

Many nonmajor companies nonetheless file such data voluntarily, but consistency exists only among major companies.

In comparisons, figures for nonmajor companies should be excluded from a calculation of total U.S. interstate pipeline utilization for any given year because of their unreliability year to year.

Therefore, combining 1992 mileage data for all regulated liquids-pipeline companies (162,368) with mileage reported by the major natural-gas pipeline companies (46 companies reporting 227,055 miles) yields a total figure of 389,423. This represents an 8% decrease of 35,358 miles over comparable figures reported for 1991 (171,471 + 253,310 = 424,781).

The 1991 figures represented an increase over 1990's total of 416,698 miles.

Whether the FERC designates a liquids pipeline company as an interstate common-carrier pipeline determines whether the company must file an FERC annual report (form 6).

These reports for 1992 show that gathering lines decreased by 2,403 miles; crude-oil lines, by 4,359 miles; and product lines, by 381 miles over totals reported for 1991.

These figures are in line with the erratic pattern of liquids-pipeline utilization for the past 10 years (Table 6).

Natural-gas transmission lines for all companies (major and those nonmajor which reported mileage) were down slightly compared with 1991's, by 7,496 miles (2.7%).

DELIVERIES

Throughput for liquids-pipeline companies in 1992 was flat when compared with 1991.

And for all natural-gas pipelines, sales of gas in 1992 fell by 368.7 bcf 8%), and for majors, by almost 1 tcf 24.4%).

These latter figures reflect the ongoing shift of natural-gas pipeline companies to transporters of gas from their historic role as buyers of gas for resale.

This shift has been evolving for 9 years and was evident in 1992 in the volumes of gas regulated interstate pipeline companies transported for others.

For last year, all regulated U.S. interstate gas pipelines carried more than 24.6 tcf of gas for others; of those volumes, majors carried almost 22 tcf.

For all companies, volumes of gas transported for others rose by almost 2.4 tcf (10.6%) when compared to volumes carried in 1991; for majors, the rise was almost 875 bcf (4%).

Volumes of gas transported for others in 1992 reported by major and nonmajor interstate gas-pipeline companies (24.6 tcf) comprised 85.3% of total volumes (28.8 tcf) moved through the U.S. system, up from 82.9% for 1991 and from 78.6% for 1990.

For major companies (whose total volumes reached nearly 25 tcf), the share was larger: more than 88%. This share also represented an increase over the 1991 figure, up from 84%, and over the 1990 figure, up from 81%.

Crude-oil and product deliveries last year approached 11.5 billion bbl, a marginal increase over 1990 of 117.6 million bbl (1%).

Crude-oil deliveries through the U.S. interstate system declined slightly last year, by almost 144 million bbl (2%). Product deliveries increased by 95 million bbl (2%).

Trunkline traffic for U.S. crude-oil and product pipelines also showed a small decline last year when compared to 1991. It fell by 42 billion bbl-miles (-1.2%) over that for 1991.

RANKINGS

Oil & Gas Journal ranks the top 10 pipeline companies in three categories (mileage, barrel-mile throughput, and operating income) for oil-pipeline companies and four categories (mileage, natural-gas sales, volumes transported for others, and operating income) for natural-gas pipeline companies.

These rankings are broken out from the pipeline-company tables.

For all natural-gas pipeline companies, net income as a portion of gas-plant investment resumed a trend begun in 1988.

This portion stood at 3.1% for 1992, up from 0.5% for 1991. For 1990, it was 5.2%, 4.6% for 1989, and 3.1% for 1988. The 1988 figure was up from 2.9% in 1987.

It was 3.4% in 1986, 4.5% in 1985, and 8.7% in 1984, the year the FERC began its restructuring of the interstate gas-pipeline industry that has culminated in FERC Order 636.

For major gas pipelines in 1992, net income as a portion of gas-plant investment was also 3.1% after falling to 0.4% for 1991 from 4.7% for 1990 and 4.8% in 1989.

The figure had risen to 3.2% for 1988. It fell to 2.6% in 1987 from 3.2% in 1986. It was 4.3% in 1985, and 7.6% in 1984. Again, the latter is the recent historical high that coincides with the uprooting of the natural-gas industry from its traditional role as buyer and reseller of natural gas on the interstate market.

The term "gas plant" refers to the physical facilities-compressors, metering stations, and pipelines-used to transport natural gas.

For 1992, all gas companies reported an industry gas-plant investment totalling almost $55.5 billion compared to $54.6 billion for 1991.

Majors' gas-plant investment in 1992 was $46.8 billion compared to $48.9 billion for 1991 and $47.9 billion for 1990.

For interstate common-carrier liquids pipeline companies, net income as a percentage of investment in carrier property rose to 7.6% for 1992 after dropping to 6.6% for 1991 from 9% for both 1990 and 1989. In 1988 it was 10.3%; in 1987, 11.6%.

Liquids pipelines' investment in carrier property for 1992 increased fractionally to $27.1 billion after increasing in 1991 by more than $1.1 billion (4.3%) over 1990 to $26.9 billion.

The 1990 figure had shown a similar increase of almost $1.2 billion (4.8%) over 1989.

Another measure of the profitability of oil and natural-gas pipeline companies in recent years is the percentage net income represents of operating income.

Through 1987, trends for liquids-pipeline companies and for natural-gas pipeline companies had been heading in opposite directions for 10 years.

For liquids-pipeline companies in 1992, income as a portion of operating revenues was 28.8%, rising from 26.3% for 1991 but still down from 32.7% for 1990 and 34.2% for 1989.

TRACKED COMPANIES

In this annual Pipeline Economics Report, Oil & Gas Journal has for several years been tracking investment by five crude-oil pipeline companies and five products-pipeline companies.

Table 7 indicates that investment by the five crude-oil pipelines stood at $1.87 billion at the end of 1992 compared to $1.89 billion at the end of 1991. That year's figure compares with $1.82 billion at the end of 1990.

Investment by the five products pipeline companies was $3.1 billion compared to $3.07 billion for 1991 and $3.01 billion at the end of 1990.

Fig. 2 illustrates the investment split in the crude-oil and products pipeline companies.

CONSTRUCTION ACTIVITY

As Fig. 2 shows, the costs of line pipe and fittings and of laying pipelines comprise more than 70% of the cost of a pipeline system.

Although these elements of pipeline construction costs have risen very little for the past few years, after rapidly increasing before 1982, the cost of labor has been showing signs of increasing more rapidly.

COST TRENDS

Table 8 lists a 10-year land-construction cost trend for natural-gas pipelines with diameters ranging from 8 to 36-in. The table's data are based on estimated costs filed under CP dockets with the FERC, the same data that are shown in Tables 2 and 3.

As Table 8 reflects, the average cost per mile for any given diameter may fluctuate from one year to the next as projects' costs are affected by geographic location, terrain, population density, or other factors.

The cost-per-mile trends from 1992 to 1993 are uniformly up, except for 12 in. pipeline estimates.

Yearly fluctuations in these figures are illustrated in construction figures for a 12-in. pipeline. These had leapt between 1984 and 1985 by 90%, fallen in 1988 by more than 30%, jumped again in 1990 by 233%, fallen for 1991 by 68%, jumped again in 1992 by 17%, but dropped this year by 12%.

PLANS AND MILES

Table 2 lists 88 land-pipeline construction projects and 1 offshore project. This compares with 131 land and no offshore reported in last year's Pipeline Economics Report.

Land projects proposed during the period surveyed represent slightly fewer than 2,000 miles of pipeline at an estimated price tag of almost $1.7 billion.

Total costs of projects surveyed in last year's Pipeline Economics Report ran almost $2 billion.

COST TRENDS, COMPONENTS

Cost-per-mile figures may reveal more about cost trends than aggregate costs.

For proposed U.S. gas-pipeline projects in the 1992-93 period surveyed, the average land cost per mile was more than $860,000 (Table 2) compared with more than $850,000/mile for the 1991-92 period.

The only offshore pipeline project proposed during the 1992-93 period showed an estimated cost per mile of almost $550,000. No offshore projects were proposed for the period July 1, 1991, to June 30, 1992.

Analyses of the four major categories of pipeline construction costs-material, labor, right of way (R.O.W.), and miscellaneous-can also indicate trends within each group.

Material costs include those for line pipe, pipe coating, and cathodic protection.

R.O.W. cost figures include surveying, obtaining right of way, and allowing for damages.

"Miscellaneous" costs generally cover engineering, supervision, contingencies, allowances for funds used during construction (afudc), administration and overheads, and FERC filing fees.

For the 88 projects surveyed for the 1992-93 period covered in this report, cost-per-mile data for the four categories are as follows:

• Material - $275,399/mile

• Labor-$338,190/mile

• R.O.W. and damages-$46,844/mile

• Miscellaneous - $200,082/mile.

Table 2 lists proposed pipelines in order of increasing size (OD) and increasing lengths within each size. The average cost per mile for the projects shows few clear-cut trends related to either length or geographic area.

In general, however, the cost per mile within a given diameter indicates that the longer the pipeline, the lower the incremental cost for construction. And broadly, lines built nearer populated areas tend to have higher unit (per-mile) costs.

Additionally, road, highway, river, or channel crossings and marshy or rocky terrain each strongly affects pipeline construction costs.

Fig. 3, derived from Table 2 for land pipelines, shows the major cost-component split for pipeline construction cost.

Material and labor are shown to make up more than 71% of the cost of constructing land pipelines.

Fig. 4 plots the average pipeline construction cost for land and offshore gas-pipeline construction projects listed in Table 2.

Fig. 5 shows the cost split for land compressor stations based on data in Table 3.

OPERATING COSTS

Once a natural-gas pipeline is laid, compressor stations constructed, and meters installed, operating costs become the next consideration.

As an aid in estimating this element, transmission expenses for interstate gas pipelines for 1990 and 1991, have been included (Table 9). Data for these years are the most recent available in aggregate from the U.S. Department of Energy.

Fig. 6, which traces these expenses for a 10-year period, shows the rising trends of transmission costs for the 3 years 1989-1991.

Table 9 is based on 202,168 miles of pipeline operated and almost 3.9 tcf of gas sold for 1991 majors and on 254,527 miles of pipeline operated and 4.5 tcf of gas sold for 1990 majors.

• The highest component of transmission-operating expenses is transmission and compression of gas by others: for majors in 1991, this component was $4,02,5/mile or $209/Mmcf sold; for majors in 1990, this component was $3,384/mile or $193/MMcf.

• The second highest cost component of transmission-operating expense is gas for compressor-station fuel: for majors in 1991, $1,518/mile or $79/MMcf; for majors in 1990, $1,358/mile or $77-MMcf.

• The highest cost component of maintenance expense covers compressor-station equipment: for majors in 1991, $1,381/mile or $72/MMcf; for majors in 1990, $1,062/mile or $61/MMcf.

• The second highest cost component for maintenance is the maintenance of pipelines: for majors in 1991, $488/mile or $25/MMcf; for 1990 majors, $441/mile or $25/MMcf.

• Table 8 indicates that the highest component of transmission expenses for natural-gas pipelines is the operation expense: for 1991 majors, $11,879/mile or $616/MMcf; for 1990 majors, $8,773/mile or $500/MMcf.

• Unit-maintenance expenses for 1991 majors were $2,367/mile or $123/MMcf; for 1990 majors, $1,912/mile or $109/MMcf.

• During 1990, major natural-gas pipeline companies spent slightly more than $2.2 billion for operation expenses and $486 million on maintenance. Total expenditures by 1990 majors for operation and maintenance expenses reached more than $2.7 billion.

  Total operation expenses for majors in 1991 increased to more than $2.4 billion, the second year of increase following a drop of almost $31 million from 1988 to 1989.

  Total maintenance expenses in 1991 fell to more than $478 million from a 1990 cost of $486.7 million. These expenses had shown a rise of more than 17% in 2 years beginning in 1989.

  Total transmission expenses showed a rise between 1990 and 1991. In the later year, they reached nearly $2.9 billion.

• On a unit basis, the total 1991 transmission expense for majors was $14,246/mile or $740/MMcf of gas sold; for 1990 majors, it was $10,685/mile or $610/MMcf.

Copyright 1993 Oil & Gas Journal. All Rights Reserved.