INGAA Pans NGSA in Biting Letter to BP Amoco
The head of a major pipeline trade group wrote a biting letter
to BP Amoco CEO Sir John Browne that characterized the Natural Gas
Supply Association (NGSA) as a dangerous loose cannon whose
interests are contrary to the rest of the natural gas industry.
The Interstate Natural Gas Association of America (INGAA) and a
variety of groups, including the American Petroleum Institute, are
working to "increase deliverability and [the] use of natural gas,"
but "unfortunately, the same cannot be said of the Natural Gas
Supply Association," wrote INGAA President Jerald V. Halvorsen in a
March letter in which he said he was seeking "cooperation, not
confrontation" between the two associations.
"Given that BP Amoco is one of the largest contributors to NGSA,
we are surprised that [the] NGSA has publicly staked out a position
that is inimical to the expanded transportation of natural gas," he
"Specifically, NGSA repeatedly challenges the filings of natural
gas pipelines at our regulatory agency, the Federal Energy
Regulatory Commission (FERC), and NGSA publicly attacks the
financial returns and efficiency of our members. Without adequate
returns on equity, our members cannot compete for needed capital to
build the North American pipeline infrastructure that will be
needed," he told Browne.
Halvorsen also criticized the NGSA for seeking rehearing of the
mega gas rule, Order 637, which was issued in February. "That rule,
while not perfect, was approved unanimously by Commissioners of
divergent views and reflects a compromise worked out over two
years," he said.
"The problems you set forth in your letter are, in some
respects, the vestiges of a previous, more confrontational time,"
responded L. Richard Flury, BP Amoco's chief executive of gas &
power. "BP Amoco is dedicated to improving relationships with the
pipeline community, while at the same time ensuring the U.S. gas
producers' legitimate interests are adequately represented."
As to Order 637, he noted there are "many aspects" of the
decision that BP Amoco supports. "Our concerns relate primarily to
those areas where we believe pipeline market power can be
exploited. We have proposed to FERC prudent regulatory safeguards
to address that issue."
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