Oklahoma gas producers are close to declaring victory in abattle with the state’s pipeline companies. New legislationexpected to be signed by the governor within two weeks would givestate regulators greater authority to settle gathering disputes,ensure producers are provided open access to gas transportation,and to ensure the rates, terms and conditions of gatheringcontracts are just, reasonable and nondiscriminatory.
Gas gathering reform is “the biggest transfer of wealth inOklahoma since the windfall profits tax,” said the OklahomaIndependent Petroleum Association (OIPA). OIPA estimated failure toenact SB 319 could cost the state treasury as much as $25 millioneach year in lost revenues because of “skyrocketing gas gatheringrates.”
“Gathering rates for some are up 300%,” said Jim Palm, presidentof the OIPA. “Here’s one up nearly five fold. These rates arequoted by our member companies. Here’s one that noted a 5,000%increase. Another says 1,427% net increase. These are significantincreases not just percentagewise but dollarwise.”
The Gas Processors Association, which represents Transok,Enogex, Warren Petroleum, GPM Gas, Williams Field Services andother gas gatherers, disputed those figures, however. GPA saidgathering rates have risen only moderately over the past few years:1% in 1995, 2.97% in 1996 and 3.28% in 1997, “not the 300% somehave claimed.”
GPA said there’s nothing wrong with the existing gas gatheringstatute, which assures that producers will have access to gatheringand rate oversight by the corporation commission whenevercompetition is absent. The success of the current statute is “seenfrom the fact that there have been not more than 15 totalcomplaints filed at the commission and none since Jan. 1,” GPAsaid.
But Palm said it’s a “classic case of wealthy mostlyout-of-state pipelines having the deck stacked in their favor.andnot wanting any effective governmental oversight.”
Passage of the legislation would make Oklahoma one of the fewstates that have picked up where the Federal Energy RegulatoryCommission left off when it decided in 1995 that its jurisdictionstarted at the end of the gas gathering line.
Oklahoma Governor Frank Keating is expected to sign Senate Bill319 into law within the next two weeks. The bill was passed by boththe house and the senate earlier this month. The governor couldpocket veto the bill, which arrived on his desk Tuesday, but he hasnever pocket vetoed a bill, noted Keating’s deputy press secretaryJohn Cox. “If it was an issue that was likely to draw a veto,legislators would have sent it to the governor’s office long beforenow,” said Cox. The legislative session ends Friday.
But pipeline companies still aren’t giving up. They continued toblast the legislation this week in an information package sent tothe governor urging a veto. “Gas gatherers could shift theirresources to other states rather than confront the bill’s onerouslimitations on free enterprise,” GPA said. “The bill’s costly andcomplex utility-type regulations will only work to reduceOklahoma’s marketable natural gas production, increase taxes andincrease energy costs for Oklahoma citizens.”
©Copyright 1998 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.
© 2024 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |