NGI The Weekly Gas Market Report / NGI All News Access

Conference Planned on Northeast Quadrant Gas Demand

April 19, 1999
/ Print
| Share More
/ Text Size+

Conference Planned on Northeast Quadrant Gas Demand

Faced with conflicting reports about the need for new pipeline capacity to serve the Northeast quadrant of the country, the Federal Energy Regulatory Commission last week called for an inquiry into the area's projected demand for natural gas over the next 20 years.

The Commission has selected a public conference as the forum to conduct its inquiry, which will focus on anticipated gas demand and the need for new capacity in the region east of the Mississippi River and north of Tennessee and North Carolina. It has scheduled the conference for June 7th, and is seeking input from the entire energy industry.

FERC indicated it was undertaking the effort in an attempt to make some sense out of the conflicting and disparate projections for gas consumption and capacity requirements in the targeted region. The results could provide "valuable insight into the development of a rational certificate's policy" to deal with the flurry of Northeast-bound pipeline projects that still are pending before the Commission, Commissioner Linda Breathitt said.

FERC has been the target of substantial criticism in recent weeks due to its decision to defer action on preliminary determinations for two major Northeast projects - Independence and Millennium - until next fall. The Commission cited questions about the "need" for the projects and unprecedented landowner opposition as the reasons for its action.

"...[T]here are numerous, varying projections concerning the growth of natural gas markets in the eastern United States. These projections, however, do not shed light on the impact this potential growth will have on existing pipelines. Thus, the Commission believes that it is important to examine these projections and to understand more about the assumptions, data sources and perspectives upon which these growth forecasts are based," FERC said in last week's notice of public conference [PL99-2].

Specifically, FERC said it wants to know when the rise in gas demand is expected to occur. "Will growth occur at varying rates over the next five, ten or twenty years? Will the projected demand occur during a certain time of the year, e.g. during the winter when pipeline use is at its peak (mainly due to heating); off-peak periods when capacity is more readily available (due to a switch to air conditioning); or year round."

In addition, FERC said it hopes to find out more about the type of growth that's expected. "...[T]he Commission is interested in determining if the contemplated growth will serve electric generation facilities, residential customers, industrial concerns, other consumers or some combination thereof," according to the notice.

As a secondary issue, it noted it also intends to explore the effect of projected demand growth on existing pipeline capacity in the Northeast. "For example, where, when and how much existing capacity is currently available? If the projected growth takes place as forecast, where will excess capacity exist in the future? How often will existing facilities be constrained? Are existing pipeline systems being effectively used? Is it possible to increase the utilization of existing systems?" are some of the questions that it posed. Industry has been asked to file written responses at FERC within 15 days after the conference. Requests to speak at the conference should be submitted by May 10th.

"I view this as fundamentally a data-collection exercise," noted Chairman James Hoecker. "Although we have lots of gas policy issues on the table, I don't view this necessarily as a broad exploration of policy."

FERC's focus will be on "ascertaining what is probable and what is unlikely in terms of demand growth in the Northeast quadrant," which encompasses the Northeast, Midwest and part of the Mid-Atlantic, he said. Although "this is not the whole enchilada, I think it will supply a useful [snapshot]" of the projected demand outlook.

Breathitt said she supported the inquiry, but would have preferred the scope to have been expanded beyond the Northeast quadrant. She believes it should have included all markets east of the Mississippi River, according to her staff. Limiting the scope "fails to recognize the fact that other regions of the country are also expected to experience substantial growth in demand for natural gas," Breathitt said.

Susan Parker

©Copyright 1999 Intelligence Press, Inc. All rights reserved. The preceding news report may not be republished or redistributed in whole or in part without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus