FERC Chairman Curt L. Hebert told a House panel yesterday thatthe Commission was “fully committed” to moving quickly onapplications for new interstate pipeline capacity to California andfrom the North Slope of Alaska to meet the unquenchable demand fornatural gas.

“…[I]n response to the present situation in California, theCommission is responding as quickly as possible to any applicationsto construct new capacity. In the last seven months, the Commissionhas issued certificates for three projects with total capacity ofalmost 119 MMcf/d of capacity that could benefit the West. Severalmore certificate applications are pending, and the Commission iscommitted to moving quickly on these projects as well,” he told theHouse Energy and Air Quality Subcommittee during a hearing onnatural gas Wednesday.

The tight demand for capacity to California was underscored inthe recent open season that El Paso Natural Gas held, Hebert said.Shippers placed total bids for 14.4 Bcf/d of capacity, but only1.22 Bcf was available. “So you see what’s chasing what. Many ofthe pipes are running full.” The tight capacity demand isn’t justconfined to California, he noted. It also can be found on pipelinesin the Southeast, Northwest and in New England.

FERC “is prepared to adopt additional procedures for expeditionif they will help to alleviate the present emergency” in Californiaand elsewhere, Hebert said. But the Commission’s actions, hecautioned, “can only be effective if there is available local[distribution] capacity to deliver gas downstream of the interstatepipeline.” The adequacy of intrastate pipe capacity is under thejurisdiction of the states.

He believes a “constrained” intrastate transportation system insouthern California has been at least partly responsible for thehuge run-up in natural gas prices there. “I urge the state ofCalifornia and its leadership to expedite its consideration ofproposals to relieve those constraints and provide relief toCalifornia customers.” He noted FERC “will cooperate with thestates in order to ensure that new facilities subject to statejurisdiction are properly integrated in the grid.”

In order to assure adequate gas supplies to other regions, “Istrongly support the construction of a natural gas pipeline fromthe North Slope of Alaska to the Lower 48 states,” Hebert toldlawmakers on the panel. “If constructed, an Alaska pipeline wouldprovide unprecedented economic, energy security and environmentalbenefits by bringing a very large supply of additional gas to thedomestic market. I’m fully committed to acting on any request forthe construction of pipeline infrastructure to deliver this gas tothe North American consumer.”

An Alaskan pipeline is needed to meet the long-term energy needsof the nation, he said. “I think it is clear that, especially ifyou start looking at five to 10 years out, we need additionalsupply, without exception.”

In addition to greater cooperation with states, Hebert said hewas “eager to engage in a team effort with executive agencies thatwill play a major and coordinated role in the environmental reviewof any proposals” to minimize regulatory overlap.

Gas supply and transportation have evolved into competitive,transparent markets, Hebert said, but “it is critical that wecontinue to develop the same type of competitive markets forelectric energy and transmission” as well. “…[T]he people ofAmerica need a one-stop shop to facilitate their energy needs.”

©Copyright 2001 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.