A Federal Energy Regulatory Commission (FERC) administrative law judge (ALJ) has approved an uncontested settlement between Viking Gas Transmission and its shippers resolving charges that the company over-recovered costs, resulting in unjust and unreasonable rates for shippers. The settlement [RP13-185] was negotiated between FERC staff, Viking and 16 shippers. FERC may approve or reject the decision in full or in part. FERC’s charges were based on Viking’s Form 2 cost and revenue information from 2010, which staff said showed that the pipeline had substantially over-recovered its cost of service. Since 2009, FERC has initiated several investigations into rates (seeNGI, Nov. 23, 2009). The settlement requires Viking to reduce all base tariff rates, effective Nov. 14, 2012, by 2% and to file changes to its gas tariff within 15 days following a final order. The reduced base settlement rates would take effect on Jan. 1, 2014 and remain in effect for at least one year.

Lifted by the Marcellus Shale, Cabot Oil & Gas Corp. expects production to grow 30-50% in 2014. Output in 2013 is expected to be 44-54% higher than in 2012. “While production volumes have recently been impacted by our strategic decision to periodically hold back production due to the recent softness in Marcellus spot market pricing and scheduled infrastructure maintenance projects (most of which will be completed by early October), we believe these are both short-term phenomena that will not have an impact on our production growth in 2013 and beyond,” said CEODan Dinges. Production in 2Q2013 totaled 95.2 Bcfe, a 52% increase year/year and 7% higher than in 1Q2013 (see NGI, July 29; April 29).

Hydraulic fracturing (fracking) among pressure pumpers is becoming more efficient and doing more with less, according to UBS Securities LLC, a sentiment repeated by other analysts recently. Overall capacity for fracking should remain oversupplied and keep prices competitive for 12-18 months, said analysts. The industry began 2013 with 20-25% excess capacity, with a well count that was forecast to grow 8-10%, but there’s more idle equipment today because of efficiencies and 24-hour crews. Under normal circumstances crews were able to keep pace with two to two-and-a-half onshore rigs but they now keep pace with four rigs.

The New York Department of Environmental Conservation (DEC) is proposing to permit liquefied natural gas (LNG) facilities and transport, which would lift a 40-year ban. DEC wants to permit, among other things, facilities to fuel trucks and facilities that store LNG as a backup heating fuel. Partly in response to a 1973 accident on Staten Island that killed 40 workers, state lawmakers enacted a moratorium on LNG facilities, which was lifted in April 1999 for all locations except municipalities with a population of one million or more. Not affected by the DEC proposal are compressed natural gas or liquefied petroleum gas. The regulations would not require permits for vehicles or vessels that are fueled by LNG, but would regulate fueling stations that store LNG. Comments are due by Nov. 4. Information is available from the DEC website.

Cheniere Energy Inc. unit Sabine Pass Liquefaction (SPL) has filed for approval with the U.S. Department of Energy (DOE) to globally export up to 314 Bcf/year of liquefied natural gas (LNG) for 20 years from its Louisiana project. The export volumes represent the uncontracted capacity for the fifth and sixth trains. SPL holds DOE authorization to export up to 803 Bcf/year to free-trade agreement (FTA) countries and those without agreements, and it has long-term authorization to export 101 Bcf/year and 88.3 Bcf/year to FTA nations, subject to agreements with Total Gas & Power North America Inc. and Centrica plc.

Puget Sound Energy (PSE) has agreed to pay a $275,000 penalty to settle a natural gas safety complaint regarding a 2011pipeline leak, explosion and house fire in Seattle. The Washington Utilities and Transportation Commission (WUTC) alleged that PSE violated safety rules when it responded to reports of gas leaks two years ago. An explosion and fire subsequently destroyed a home and injured two people. The utility, which admitted to some violations, is not allowed to pass on the cost of the penalty in retail rates.

The Consumer and Enforcement Division of the California Public Utilities Commission (CPUC) has implemented increased authority to issue gas utility citations following the .$2.25 billion penalty imposed on Pacific Gas and Electric Co. (PG&E) related to the San Bruno, CA, pipeline explosion (see NGI, May 13). The division now has staff-level authority to issue citations for violations of state or federal codes/regulations ranging up to $50,000/day per violation. A whistleblower program also has been established for anonymous reporting of violations by gas utility employees or contractors at (800) 649-7570 or safetyhotline@cpuc.ca.gov.

Honeywell UOP LLC and Black & Veatch (BV) have formed an alliance to develop liquefied natural gas (LNG) production facilities to supply rail, vehicle and marine transportation sectors. The collaboration combines BV’s technology with UOP’s modular plant equipment/processing technology. The companies plan to offer integrated, small-scale plants capable of processing 50,000-500,000 gallons of daily/single liquefaction trains.

The Idaho Public Utilities Commission has approved purchased gas adjustment (PGA) rate increases for Avista Utilities and Intermountain Gas Co. effective Tuesday (Sept. 1). Intermountain may implement a $10.3 million rate hike, or 4.15%, overall. Avista Utilities was given about a 6.8% jump in PGA rates, more than $4 million annually and received a less than 1% fuel cost adjustment for electric utility customers,

A state-of-the-art center at Oklahoma State University‘s Institute for Technology has opened to offer instruction in natural gas compression, and the University of Wyoming‘s Energy Innovation Center, a digital rock physics laboratory, has opened in Laramie, WY. Chesapeake Energy Corp.contributed $2 million to the Oklahoma center, which will bear its name, and other donations were provided by Devon Energy Corp., Oneok Inc. and Energy Transfer Partners. Hess Corp.donated $4.4 million for the Hess Digital Rock Physics Laboratory in Laramie.

There aren’t enough safeguards in place to ensure accidents can be managed in the U.S. portion of the Arctic Ocean, according to The Pew Charitable Trusts. The independent nonprofit issued a series of recommendations about what operators and regulators should consider to be prepared for “self-rescue. Inadequate infrastructure and punishing weather could seriously delay the arrival of additional vessels, equipment, people, or other help.” Pew are recommended that the Department of Interior“routinely update minimum prescriptive standards to ensure that technical innovations are routinely integrated into regulation.”

William J. Ray, a landman accused of defrauding property owners in Washington County, PA, has pleaded guilty to mail fraud in U.S. District Court for the Western District of Pennsylvania. Ray was charged with three counts of mail fraud and one count of wire fraud; the minimum sentence is up to three years of probation. Ray is to be sentenced in January. Alleged accomplice Derek A. Candelore has been charged with mail and wire fraud also; he entered a not guilty plea. The men were employed by Penn-Star Energy LLC to act on behalf of Range Resources Corp.

Japan and Canada plan to engage in talks over potential liquefied natural gas (LNG) exports from Canada, according to Japanese Prime Minister Shinzo Abe. The countries are expected to hold ministerial-level consultations, he said.