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INGAA to Obama: Keep Approval of Gas Pipes in FERC Hands

January 19, 2009
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A major interstate pipeline group called on President-elect Obama last Wednesday to maintain the existing statutory authority under the Natural Gas Act (NGA) that gives FERC exclusive jurisdiction over the siting and approval of interstate natural gas pipelines.

"While we do not believe that the natural gas pipeline industry needs federal funds to continue our infrastructure expansion and upgrades, we do believe that maintaining...regulatory certainty will be fundamental to raising additional private capital," wrote Donald F. Santa, president of the Interstate Natural Gas Association of America (INGAA), in a letter to Obama.

"Some have advocated changes to the Natural Gas Act that would decentralize the process for authorizing new pipeline construction and that would alter the ratemaking regime to place existing and future pipeline investments at greater risk. We urge policymakers to avoid changes to the pipeline regulatory program that would increase the cost of capital for, and drive private investment away from, new natural gas pipeline infrastructure."

INGAA opposes legislation (HR 6720) that was introduced in the last Congress by Rep. Timothy Bishop (D-NY) to establish a commission to consider changing the approval and siting process for gas pipelines, potentially taking the authority away from the Federal Energy Regulatory Commission and putting it in state and regional hands, as is currently done with electric transmission lines.

"There are some in Congress who want to alter the way gas pipelines are approved, making it a state or regional process...We think the existing statutory authority under the Natural Gas Act has worked quite well," said Martin Edwards, vice president of legislative affairs for INGAA.

No action has been proposed by the incoming administration to prompt INGAA's letter to Obama, Edwards said. "We're just putting a marker down with the new administration" to let it know where INGAA stands on the subject.

INGAA also asked Obama to support a tax policy that favors pipeline infrastructure investment. "Like other capital-intensive segments of the economy whose growth depends on access to external financing, the interstate natural gas pipeline industry would benefit from tax policy that promoted investment in infrastructure, plant and equipment (e.g., accelerated depreciation, investment tax credits, reduced dividend tax rate)."

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