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Santa: Point Out Gas Act Failing to Power Industry

Natural gas pipeline interests have an opportunity to speak up during the current discussion of expanding FERC authority for siting interstate electric transmission, according to Interstate Natural Gas Association of America (INGAA) President Donald Santa. While the Natural Gas Act is seen as a potential model for electric transmission policy, pipelines should point out where it doesn't work, Santa told a Houston audience last Wednesday.

"A number of folks...have pointed to the Natural Gas Act and the process for siting and approving gas pipelines as the model that the electric power industry should follow," he said. "I think that this presents us with perhaps an opportunity to rectify what I think of as kind of the Achilles' heel of the gas pipeline siting process, and that is the ability after FERC has rendered a certificate of public convenience and necessity...the opportunity of other agencies, whether they're state agencies or federal agencies...to deny or somehow unreasonably condition or delay permits that are necessary to actually construct the pipeline."

Last Tuesday, a Senate Energy and Natural Resources Committee staff draft bill was revealed that would revolutionize the siting of new power transmission lines in the United States, with regional planning entities designated by the Federal Energy Regulatory Commission (FERC) submitting plans for the Commission's approval. FERC would have siting and fast-track certificate authority for any high-priority transmission project of 345 kV or higher (see related story).

"The discussion about electric transmission siting perhaps gives us an opportunity to get into this issue to highlight the point of 'Look, the Gas Act model is great, but unless you fix this part of it you could end up with electric transmission siting getting just as stymied and delayed as some pipelines have gotten," the INGAA president said.

Last month INGAA called on Congress to address the conflict that can occur between states and the Natural Gas Act (see NGI, March 2).

Santa, who has served on FERC, spoke at Pipeline & Gas Journal's Pipeline Opportunities Conference, where he gave attendees his view on recent action in Washington on energy policy.

"There is no doubt that we have got an activist new administration and new Congress," Santa said, noting that the federal government's attention on fixing the economy will be a catalyst for attention on other issues, particularly energy. While historically interest in energy policy "waxes and wanes" with energy prices, Santa said energy and the environment are now linked. Attention to combating global warming obviously will include energy policy.

Lawmakers currently dickering with environmental and energy policy tend to be from the East and West coasts, Santa noted, which has left some Midwesterners feeling left out. As one's position on climate change and what to do about it is largely dictated by where one lives, it will be interesting to see whether Democrats will be able to continue party discipline on the issue, such as they've shown with votes on the economic stimulus package, Santa said.

To date, action on energy issues in Washington has been relatively benign where natural gas is concerned, Santa said. That could change, however, as things could go either way for the cleaner-burning fuel. Gas, of course, is cleaner on emissions than coal and gas-fired generation, and that is seen by many as complementary to intermittent renewable energy sources, such as wind and solar. However, the burning of natural gas does release greenhouse gases, and the buildout of renewable energy will be displacing some older power generation, including potentially some gas-fired units, Santa said.

"Policymakers aren't thinking of the harm they can do to natural gas if they're not careful," he said.

One danger to the gas industry would be if old legislation that would have consolidated regional siting for pipelines, liquefied natural gas (LNG) terminals and gas storage is reintroduced. This would be a threat to the market-oriented siting process that the industry currently enjoys, Santa said. While acting FERC Chairman Jon Wellinghoff, a Democrat, has been a dissenter in a number of recent orders approving LNG facilities, Santa said he doesn't see the commissioner's views on LNG siting carrying over to his views on pipelines.

Speaking at the same conference, El Paso Corp. CEO Doug Foshee said powerful forces, such as the coal lobby, were at work to derail the future of natural gas. "Please get involved to ensure that natural gas has a seat at the table as we wrestle with a national energy policy," he said.

Foshee recounted how he heard one utility executive refer to natural gas as the "crack cocaine" of the utility industry. "We haven't been particularly good advocates for natural gas, but now is the time when we have to be," Foshee said. "Natural gas isn't the sole answer, but it should be an answer."

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