The head of a major pipeline trade group wrote a biting letterto BP Amoco CEO Sir John Browne that characterized the Natural GasSupply Association (NGSA) as a dangerous loose cannon whoseinterests are contrary to the rest of the natural gas industry.

The Interstate Natural Gas Association of America (INGAA) and avariety of groups, including the American Petroleum Institute, areworking to “increase deliverability and [the] use of natural gas,”but “unfortunately, the same cannot be said of the Natural GasSupply Association,” wrote INGAA President Jerald V. Halvorsen in aMarch letter in which he said he was seeking “cooperation, notconfrontation” 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 positionthat is inimical to the expanded transportation of natural gas,” hesaid.

“Specifically, NGSA repeatedly challenges the filings of naturalgas pipelines at our regulatory agency, the Federal EnergyRegulatory Commission (FERC), and NGSA publicly attacks thefinancial returns and efficiency of our members. Without adequatereturns on equity, our members cannot compete for needed capital tobuild the North American pipeline infrastructure that will beneeded,” he told Browne.

Halvorsen also criticized the NGSA for seeking rehearing of themega gas rule, Order 637, which was issued in February. “That rule,while not perfect, was approved unanimously by Commissioners ofdivergent views and reflects a compromise worked out over twoyears,” he said.

“The problems you set forth in your letter are, in somerespects, 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 thepipeline community, while at the same time ensuring the U.S. gasproducers’ legitimate interests are adequately represented.”

As to Order 637, he noted there are “many aspects” of thedecision that BP Amoco supports. “Our concerns relate primarily tothose areas where we believe pipeline market power can beexploited. We have proposed to FERC prudent regulatory safeguardsto address that issue.”

Susan Parker

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