The problem is not natural gas pipeline capacity going ‘to’California, rather it is a lack of pipelines ‘within’ the state,particularly to power generation plants, that is aggravatingproblems in the state electric power market, according to KevinPetak, director of Energy and Environmental Analysis Inc. (EEA).

Petak noted FERC’s request last week that El Paso consider addingcapacity to California, specifically by using a crude oil pipeline itrecently bought and is planning to convert to gas as a supplement toits system, rather than as replacement capacity (see Daily GPI, Jan. 5).

El Paso seeks to convert a 785-mile segment of the oil lne fromMcCamey to Ehrenberg, AZ, to gas. The pipeline proposed the Line 2000project as a loop line to replace existing compression, and not as asystem expansion. However, shippers have protested having to pay forit as a replacement project and suggested both converting the line andreplacing the compressors on the old line. El Paso is said to beconsidering that option (see Daily GPI, Sept. 1, 2000).

“But the discussion has yet to focus on the need for additionalintrastate transportation capacity, which is critical to ease thebottlenecks that are creating the current conditions in the gasmarket,” Petak said. There already is additional capacity availablegoing to the border on the current pipelines, El Paso,Transwestern, Kern River and Mohave. However, the gas has a hardtime reaching end users, particularly power generators.

The analyst for EEA, based in Arlington, VA, also suggested that”development of new California deep gas production at East LostHills would assist in easing some of the pressure on California gassupply and therefore on gas prices, but only if intrastate pipelinecapacity is available to move the gas to end-users.” Developing thein-state gas supplies, however, would take time.

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