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Gas Options Paper Elicits Lawmakers' Interest

June 1, 1998
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Gas Options Paper Elicits Lawmakers' Interest

The natural gas policy options paper, still officially under wraps at FERC, apparently has blown enough of its cover to pique the interest of lawmakers on Capitol Hill, and start the war-drums within the industry, according to sources.

Chief of Staff Michael Ware of Sen. Larry Craig's (R-ID) office, for one, met recently at FERC to discuss the "potential procedures" outlined in the options paper, said Michael Frandsen, press aide for the Idaho senator. He said the meeting was "very minor," but a gas industry group contends otherwise. It insists the meeting was called to "alert FERC that they need to involve Congress 'at the front end of this process.'"

The industry group said that at the meeting "FERC staff was given a number of questions to answer - some procedural questions and...some not necessarily favorable to the proposal. It was also suggested that Sen. Craig would hold an oversight hearing on the options paper. It was also mentioned that it was not a good idea to release the paper during an election year." Moreover, the group insisted producers had contacted Craig's office about the options paper, sparking the senator's interest in the issue.

Craig's office, as well as producers, deny these claims. "The decision as to whether there should be an oversight hearing will be made by somebody else, not Sen. Craig," Frandsen noted. "Though frankly if there's a policy change being contemplated [by FERC], it seems like it would be an appropriate subject for a hearing." Furthermore, the senator "doesn't have any position either way" about when the options paper should be released, he said.

Nor, he added, was Craig's interest in the options paper prompted by gas producers. "Sen. Craig has [a stake] in this issue because, first of all, his position on the Energy and Natural Resources Committee," and because the options paper "apparently addresses the issue of deregulation," which Frandsen said was a "topic of enormous importance right now in the Senate." In addition, he refuted the gas group's claims that Craig has been given a copy of the options paper by FERC staff. "I don't [even] think he has seen the options paper," he told NGI last week.

"Our initial reaction [to all of this] was 'they have a lot of nerve to lean all over FERC.' There isn't even a paper out yet. There isn't even a real firm initiative," a representative of the industry faction said. "Congress is asking about issues that are only being discussed, not proposed, internally. I wouldn't be happy if I were FERC [and was] getting hostile questions from members of Congress at this point in time." The group has "briefed our members to let them know that members of Congress are being contacted [about the options paper] in this manner. I think we'll leave it up to the individual companies to deal with it." Efforts to reach FERC Chairman James Hoecker on this matter last week were unsuccessful.

Charlotte LeGates, spokeswoman for the Natural Gas Supply Association, said she was aware of Craig's interest in the gas options paper, but she failed to see what all the fuss was about over his staff member meeting with FERC. "Well everybody and their grandmother has had a meeting with FERC about this paper. I mean not about it specifically, but about the issues." Moreover, "I'm sure that Craig is not the only lawmaker" interested in it "because there are a number of members of Congress who have major constituents that would be affected by this."

She believes it's "quite possible" that an oversight hearing on the options paper will be held, particularly if it leads to a "new and sweeping inquiry" of the natural gas industry. The paper takes a close look at a number of ways in which to resolve lingering, second-generation gas issues, such as pricing in the capacity-release market, negotiated terms and conditions of service and regulation of pipelines on the Outer Continental Shelf. It was prepared by FERC staff, and has been in the hands of the commissioners since March.

Susan Parker

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