The natural gas policy options paper, still officially underwraps at FERC, apparently has blown enough of its cover to piquethe interest of lawmakers on Capitol Hill, and start the war-drumswithin the industry, according to sources.

Chief of Staff Michael Ware of Sen. Larry Craig’s (R-ID) office,for one, met recently at FERC to discuss the “potential procedures”outlined in the options paper, said Michael Frandsen, press aidefor the Idaho senator. He said the meeting was “very minor,” but agas industry group contends otherwise. It insists the meeting wascalled to “alert FERC that they need to involve Congress ‘at thefront end of this process.'”

The industry group said that at the meeting “FERC staff wasgiven a number of questions to answer – some procedural questionsand…some not necessarily favorable to the proposal. It was alsosuggested that Sen. Craig would hold an oversight hearing on theoptions paper. It was also mentioned that it was not a good idea torelease the paper during an election year.” Moreover, the groupinsisted producers had contacted Craig’s office about the optionspaper, sparking the senator’s interest in the issue.

Craig’s office, as well as producers, deny these claims. “Thedecision as to whether there should be an oversight hearing will bemade by somebody else, not Sen. Craig,” Frandsen noted. “Thoughfrankly if there’s a policy change being contemplated [by FERC], itseems like it would be an appropriate subject for a hearing.”Furthermore, the senator “doesn’t have any position either way”about when the options paper should be released, he said.

Nor, he added, was Craig’s interest in the options paperprompted by gas producers. “Sen. Craig has [a stake] in this issuebecause, first of all, his position on the Energy and NaturalResources Committee,” and because the options paper “apparentlyaddresses the issue of deregulation,” which Frandsen said was a”topic of enormous importance right now in the Senate.” Inaddition, he refuted the gas group’s claims that Craig has beengiven a copy of the options paper by FERC staff. “I don’t [even]think he has seen the options paper,” he told NGI last week.

“Our initial reaction [to all of this] was ‘they have a lot ofnerve to lean all over FERC.’ There isn’t even a paper out yet.There isn’t even a real firm initiative,” a representative of theindustry faction said. “Congress is asking about issues that areonly being discussed, not proposed, internally. I wouldn’t be happyif I were FERC [and was] getting hostile questions from members ofCongress at this point in time.” The group has “briefed our membersto let them know that members of Congress are being contacted[about the options paper] in this manner. I think we’ll leave it upto the individual companies to deal with it.” Efforts to reach FERCChairman James Hoecker on this matter last week were unsuccessful.

Charlotte LeGates, spokeswoman for the Natural Gas SupplyAssociation, said she was aware of Craig’s interest in the gasoptions paper, but she failed to see what all the fuss was aboutover his staff member meeting with FERC. “Well everybody and theirgrandmother has had a meeting with FERC about this paper. I meannot about it specifically, but about the issues.” Moreover, “I’msure that Craig is not the only lawmaker” interested in it “becausethere are a number of members of Congress who have majorconstituents that would be affected by this.”

She believes it’s “quite possible” that an oversight hearing onthe options paper will be held, particularly if it leads to a “newand sweeping inquiry” of the natural gas industry. The paper takesa close look at a number of ways in which to resolve lingering,second-generation gas issues, such as pricing in thecapacity-release market, negotiated terms and conditions of serviceand regulation of pipelines on the Outer Continental Shelf. It wasprepared by FERC staff, and has been in the hands of thecommissioners since March.

Susan Parker

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