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New Infrastructure, Not Scheduling Changes, Will Cure Shortages, Says National Fuel Gas CEO

Revamping natural gas markets without building new infrastructure isn’t likely to provide the access to gas that power generators are looking for, according to incoming Interstate Natural Gas Association of America (INGAA) chairman Ron Tanski, who is also CEO of National Fuel Gas.

"To date, it seems the focus of gas and electric integration has been around scheduling, changing the gas day, trying to make the natural gas pipeline system more nimble to react to the realities that the electric generators face on an hour-by-hour basis...If you're going to be looking at using more and more natural gas for electric generation, you have to make sure that you have the firm capacity to move the gas to your plant on cold days if in fact you're going to be relying on that," Tanski told reporters at INGAA headquarters in Washington, DC, Thursday.

"That's going to take infrastructure. It seems pretty simple, but that fact continues to be missed, and the focus seems to be on scheduling flexibility, or the ability to have a trading platform so you can get gas on the weekend. Ultimately, you're going to need more infrastructure to deliver that gas on a firm basis."

INGAA was among the representatives of the natural gas industry that drew a line in the sand at a recent roundtable meeting to debate possible restructuring of natural gas markets (see Daily GPISept. 19). The concept of a natural gas trading platform, proposed by the electricity side of the debate, wasn't endorsed by the natural gas side. "The problem we've got here is, who pays for what is desired?" INGAA CEO Don Santa asked the standing-room-only crowd called by FERC Commissioner Philip Moeller. "Where is the wherewithal for those who want these capabilities, in terms of the infrastructure to support the services, to be able to pay for it, so that those who provide the infrastructure can respond to it?"

INGAA over the next year will be focused on pipeline safety, gas and electric reliability, and environmental issues regarding natural gas, Tanski said.

"Under [former chairman] Dave Devine's leadership, INGAA and its members have continued working with regulators to lay the groundwork for new pipeline safety rules, and both the pipeline industry and downstream distribution companies have continued to manage and improve their infrastructure and operations to take pipeline safety and integrity management to the next level," Tanski said.

"One of my primary goals as chairman of INGAA is to maintain this effort as we deal with the new pipeline safety rules that we expect will be proposed in 2015, and begin planning to implement those rules in a way that ensures pipeline safety while minimizing customer disruptions."

Tanski was elected chairman by INGAA's board of directors Friday. Former chairman Devine is president of central regional natural gas pipelines for Kinder Morgan (see Daily GPIOct. 11, 2013). Tanski served as INGAA's first vice chairman for the past year.

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