A Gulf South Pipeline official on Tuesday cautioned FERC against making changes in gas quality and interchangeability specifications that would severely affect the composition of natural gas, saying this could further restrict an already tight gas supply situation.

“Regulatory certainty comes with a cost. Right now the gas grid is working. If [you’re] going to push down on quality, [you’re] going to push supply off the system,” Michael McMahon, senior vice president and general counsel for the pipeline, said during a day-long FERC technical conference on the Natural Gas Council’s white papers on gas quality and interchangeability. The papers were submitted to the Federal Energy Regulatory Commission in late February.

“You’re going to push things to the lowest common denominator” with respect to quality standards on interstate pipelines, he warned. The Commission has to be “very careful about throwing the baby out with the bath water,” McMahon said.

Thomas Stewart, who represented the Independent Petroleum Association of America (IPAA), also said he was concerned that rulemaking changes by FERC would burden some of the group’s producer-members who supply 82% of the nation’s natural gas. This, he believes, would threaten the nation’s gas supply, as well as the price of gas.

“In this environment, even small changes in domestic supply can have a significant impact on prices…And yet, there is a very real risk of that happening if natural gas quality and interchangeability standards are not carefully thought through,” Stewart said.

But Alex Strawn of The Procter & Gamble Co. believes changes are needed with respect to gas quality and interchangeability. “We’re seeing anecdotal problems” in the domestic gas system. “They’re not pervasive yet,” but they are coming. “We’re at the beginning of a new frontier,” he told regulators and industry executives at the conference.

“We think that we’re more at risk by sitting here and doing nothing” about gas quality and interchangeability, Strawn said. “This is the quiet before the storm.”

As for who should bear the cost of testing and researching gas quality, Strawn said that industrial gas customers “don’t want to be disproportionately affected,” although it’s likely they will share some of the burden.

“I’d like to see [the Department of Energy (DOE)] step up” and assume responsibility for the testing costs, noted Lee Stewart, vice president of gas transmission for Southern California Gas Co. “We need DOE to step up” to “figure this thing out,” agreed Robert Wilson, who represented the Electric Edison Institute.

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