While supporting FERC's overall action, a major natural gas pipeline group said last week it had two concerns with the agency's recent order temporarily waiving blanket-certificate regulations to spur and expedite repairs and the construction of new interstate gas pipelines. The agency's action was intended to bolster deliveries of gas supplies this winter from the hurricane-battered Gulf Coast region.
The first concern is that it may be "impossible" to complete eligible pipeline projects before the FERC-ordered deadline of Oct. 31, 2006, even if the projects are begun immediately, said Donald F. Santa, president of the Interstate Natural Gas Association of America (INGAA), which represents interstate gas pipelines, in a letter last Wednesday to FERC Chairman Joseph Kelliher.
"Obtaining the necessary environmental and other governmental authorizations for such projects will take time. Some INGAA members anticipate that the skilled workers, materials and equipment necessary to complete these projects will be in short supply over the next year or more, potentially contributing further to delays in project completion," he said.
The order, which was issued last month, waived FERC regulations on a temporary basis to raise the dollar limits for projects that natural gas pipelines can construct without prior specific authorization under Part 157 blanket certificates, and it expanded the definition of eligible pipeline projects to include mainline facilities. The temporary waivers apply only to pipe projects that provide expanded or alternative access to natural gas supply, and are constructed and placed into service by Oct. 31, 2006 (see NGI, Nov. 21).
"The...order does not address how the Commission will deal with a project, commenced in good faith under the waiver order, that ultimately cannot be completed and placed in service before the Oct. 31, 2006 deadline. These circumstances create uncertainty regarding the ability to utilize the new authority that the Commission temporarily has provided the industry," Santa said.
INGAA called on the Federal Energy Regulatory Commission to grant temporary waivers even if a pipeline that begins construction with a "reasonable expectation of completion by the deadline [is] unable to complete its project on time."
Secondly, by setting the deadline of Oct. 31, 2006, FERC seems to suggest that only facilities completed by then will be able to deliver the needed supplies and price relief during the winter of 2006-2007, Santa said. "INGAA urges the Commission to reconsider its decision to use the beginning of the next winter as the date for establishing whether such infrastructure will provide relief for consumers during that winter heating season. All infrastructure completed before the end of the 2006-2007 winter season will contribute to bringing needed supplies, and presumably moderating prices, for residential heating load during that winter," he told FERC.
INGAA also asked FERC to "promptly act" on its petition for rulemaking in which it seeks certain regulatory and policy changes, including permanent changes to the agency's blanket-certificate regulations, to hasten the construction of interstate gas pipeline expansions, new storage capacity and takeaway facilities related to liquefied natural gas import projects. The pipeline group filed its petition shortly after the Commission issued the temporary waivers to its blanket-certificate rules last month (see NGI, Nov. 28).
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