In preparing to meet an anticipated 30-32 Tcf market in the next10-12 years, the gas industry should build only the amount ofpipeline capacity that’s needed when it’s needed – no more, noless, said an executive with ANR Pipeline.

The million-dollar question is how much new capacity will beenough, noted Wilbur A. Hitchcock, ANR’s senior vice president ofmarketing. To support an additional gas demand of 6.5-7.2 Tcf peryear would require about 19.6 Bcf/d of new capacity, which is “onthe order” of five to six new major interstate pipelines in termsof size or more than nine times ANR’s existing long-haul capacity(2 Bcf/d), he noted. In addition, LDCs would require about 13.7Bcf/d of additional delivery infrastructure.

There are “market forces at work [however] that suggest that weneed more capacity than just the physical balance between supplyand demand,” he said at the seventh annual DOE-NARUC natural gasconference in Pittsburgh, PA, last week. For instance, statecommissions will tell their LDCs that if they’re not gettingdiscount rates from pipelines they won’t be able to compete withgas marketers in their service territories, he noted. This couldprove to be a “real temptation” for distributors, and evenproducers, to “jump on the bandwagon” and become interstatepipelines, which could lead to “wasteful construction” in someregions.

To guard against this, the industry “should only build as weneed [new] capacity and to meet growth needs” that have beendemonstrated, Hitchcock said. “Builders of excess capacity,interstate or local, should be [held] at risk” for their costs.

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