Industrial gas customers and Illinois utilities have jumped to the defense of Natural Gas Pipeline Company of America (NGPL) in the wake of a FERC order, which they argue appears to have restricted the ability of the Kinder Morgan pipeline to keep potentially dangerous high-Btu content natural gas from entering its system in production and market areas.
In seeking rehearing Wednesday, the Process Gas Consumers Group (PGC) and other major industrial customers called FERC’s Sept. 23 order in the case a “conflicting and potentially harmful ruling” because it denies the Midwest pipeline the basic right to limit high-Btu gas on a non-discriminatory basis to “protect its system, deliveries and shippers.”
The Kinder Morgan pipeline subsidiary and its allies took issue with the Commission decision because they claim it confuses dew point level with Btu content. The agency ruled that as long as gas complies with the permanent safe harbor dew point level (PSHDL), “it may not be rejected for Btu content or changes in the requirements of downstream pipelines, LDCs or end users,” NGPL said in its rehearing petition [RP01-503].
“The ruling appears to be based on the erroneous assumption that Btu content and dew point are essentially interchangeable… So construed, the hearing order gives rise to serious operational and even safety concerns and also could result in restricting the flow of gas on Natural,” the pipeline told the Commission.
Dew point standards, NGPL explained, are designed to protect against the fallout of liquids in the gas stream. Gas that has a high dew point generally will have a high-Btu content per cubic foot, it said, but it noted that gas with a low dew point also can have a high-Btu content per cubic foot.
FERC “incorrectly seems to presume that gas that meets a dew point test necessarily has a reasonable Btu content,” said Peoples Gas Light and Coke and affiliated North Shore Gas Co. “In fact, Btu content, likely oxygen and nitrogen content, is a discrete and equally important measure of gas quality.”
High-Btu gas — above approximately 1,050 Btu/cf — can result in myriad problems, according to NGPL. “End-use facilities are calibrated to operate within a certain Btu range. If the Btu content of the gas stream goes beyond those parameters, these facilities will not operate efficiently. Plants may have to be shut down and refitted or re-calibrated. Industrial or commercial activity could be disrupted and materials in process damaged…Electric generation and other end-use facilities also may have difficulty in meeting environmental emissions standards.”
NGPL “needs the ability to enforce Btu limits even if gas meets the PSHDL. Otherwise, the operations and safety of Natural’s market-area customers will be jeopardized,” the pipeline said.
The impact of high-Btu gas on Natural’s Louisiana line, which delivers gas to several interstate pipelines, could be significant as well, it noted. Downstream pipes could stop accepting deliveries from NGPL because the gas doesn’t meet their standards, which would cause production to be shut in in the Gulf of Mexico region.
At the LDC level, Nicor Gas said billing problems would occur. “LDCs bill their customers based on a uniform Btu content, with the requirement that deliveries to customers not vary by more than 5% from the authorized level. As a result, Nicor Gas cannot accept high (or low) Btu content gas from pipelines unless that gas is commingled such [that] the 5% standards is met.”
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