It probably was coincidental that a Kinder Morgan Inc. executive’s testimony before the US Senate Energy and Natural Resources Committee about improving interstate energy delivery networks on July 12 came in the year that the 1938 Natural Gas Act’s 80th anniversary occurs.
J. Curtis Moffatt, a vice-president and general counsel at Kinder Morgan, acknowledged that the NGA, with its structure of certificates of public convenience and necessity, federal eminent domain, and comprehensive economic regulation, has resulted in a privately owned and financed, integrated transportation and storage network that drives the US economy and is the envy of the world.
But he also gave credit to the 1978 Natural Gas Policy Act for deregulating prices and effectively integrating transportation operations in both interstate and intrastate markets, and the 2005 Energy Policy Act for affirming and refining the Federal Energy Regulatory Commission’s regulation of LNG operations.
“While Kinder Morgan believes that [FERC] has done a commendable job of implementing Congressional intent to promote and develop a national integrated gas pipeline system, we also believe that the job is not finished,” Moffatt said. “To take full advantage of our abundant gas resources, we will need to continue to connect sources of supply with consumers in different locations via pipelines.”
Organized opposition has grown, he observed. “Many pipelines were constructed years ago in rural areas. Yet today, these same areas are populated suburbs whose residents are likely to oppose any modifications to existing facilities,” Moffatt said. Environmental organizations and some state government agencies actively try to discourage gas production, transportation, and consumption because of potential climate consequences they believe will occur, he added.
FERC’s 1999 policy statement has worked well in responding to rapid market changes, Moffatt said. It’s being reevaluated by the commission, and Kinder Morgan supports changes which will make the certification process more efficient, transparent and less adversarial, he indicated.
Retain two main principles
It also would like to see two fundamental principles maintained. “The first is that it is FERC’s mandate to ensure the continued development of a comprehensive integrated pipeline transportation system to ensure that the US can enjoy the benefits of its enormous gas resources. The second is that the marketplace, not the government, should determine when to construct components of this transportation system and that the private sector should continue to bear the financial risk,” Moffatt said.
While Congress showed significant foresight enacting the Gas Act 80 years ago, the resulting jobs, convenience, and economic and clean air benefits will continue to be realized only if there continues to be a transportation system to get the resource to end users, he pointed out.