Invoke

Environmental groups have told the Environmental Protection Agency (EPA) they plan to sue the federal agency unless it quickly takes steps to invoke an ozone nonattainment designation in western Wyoming in the Upper Green River Basin, the site of natural gas drilling activity.

Environmental groups have told the Environmental Protection Agency (EPA) they plan to sue the federal agency unless it quickly takes steps to invoke an ozone nonattainment designation in western Wyoming in the Upper Green River Basin, the site of natural gas drilling activity.

Republicans blocked a measure in the Senate Monday that would have given the Commodity Futures Trading Commission (CFTC) the authority to invoke its emergency powers to immediately curb excessive speculation in any contract market that is “within the jurisdiction and control of the commission; and on or through which energy futures or swaps are traded.”

Northwest warned shippers that based on available data, it may need to invoke a Declared Overrun Entitlement Period as early as Tuesday. The entitlement would apply to delivery points north of Kemmerer (WY) Compressor Station, which is considered a longtime bottleneck on the pipeline’s system. Northwest explained Thursday that over the past few months it has allowed shippers to draft the system on a limited basis to work off their Receiving Party imbalances. But during the past week the drafting has been excessive, it continued, and as documented in daily bulletin board reports, Northwest’s balance at the Jackson Prairie storage facility “is rapidly decreasing.” Also, maintenance scheduled for Tuesday and Friday of this week and on Sept. 4 (see Daily GPI, Aug. 23) will require that Northwest rely on storage to balance the system. The storage activities on the maintenance days likely will involve withdrawals from Jackson Prairie and injections into Questar’s Clay Basin facility. Northwest’s storage account must be full on Sept. 30, as required by the Jackson Prairie partnership agreement.

Without continued increases in drilling activity, natural gas prices next year could be “high enough to do serious damage to the market and invoke the ire of regulators and legislators,” according to the June “Monthly Gas Update” by Energy and Environmental Analysis Inc. (EEA). The challenge is to determine not how much gas production has declined in recent months, but rather how much drilling has to take place to allow deliverability to grow over the next 18 months to meet demand, EEA said. Without a continued rebound in drilling, “prices could average well over $5/MMBtu next year.”