Pipes

Building more greenfield natural gas pipelines to the Northeastis not the answer. In fact, massive switching from distillate oilto natural gas will not protect the region’s energy customers froma repeat of the heating oil price shocks that they experiencedearlier this year. If anything, it could aggravate prices not onlyfor distillate oil but for gas, the Energy InformationAdministration (EIA) said in a report issued yesterday.

Twelve OCS producers last week accused FERC of illegallysubjecting offshore production and production-related facilities tothe reporting requirements in its final rule dealing with theregulation of gas transportation facilities on the OuterContinental Shelf (OCS). Interstate pipelines weren’t especiallyhappy with the final OCS rule either, saying it added another layerof unnecessary regulation.

Twelve OCS producers last week accused FERC of illegallysubjecting offshore production and production-related facilities tothe reporting requirements in its final rule dealing with theregulation of gas transportation facilities on the OuterContinental Shelf (OCS). Interstate pipelines weren’t especiallyhappy with the final OCS rule either, saying it added another layerof unnecessary regulation.

With 1.6 billion barrels of oil reserves and an unknown quantityof deep-water natural gas reserves scheduled for production in 2003in the Gulf of Mexico, BP Amoco is getting a little nervous aboutlining up some means of transportation to shore.

BP Amoco has 1.6 billion barrels of oil reserves and an unknownquantity of deep-water natural gas reserves scheduled forproduction in 2003 in the Gulf of Mexico but currently there are nomeans of transportation to shore. The company said yesterday it hasformed a new Gulf of Mexico deepwater oil and gas transportationproject team to investigate its options to bring to shore thereserves in the southern Mississippi Canyon, the southern AtwaterValley and the Green Canyon areas of the Gulf.

Florida just got two steps closer to being flooded by naturalgas via two proposed pipelines. The competing Gulfstream andBuccaneer pipeline projects, which would extend from Mobile, AL,across the Gulf of Mexico to the west coast of Florida and tomarkets across the Florida peninsula, are neck and neck in theirregulatory race after receiving preliminary approvals onnon-environmental grounds from the Federal Energy RegulatoryCommission (FERC) yesterday.

The Florida Supreme Court dealt a serious blow to thedevelopment of merchant power in the state and proposed new gassupply lines in a 6-1 decision issued last Thursday, reversing thestate Public Service Commission’s authorization for Duke Energy’sconstruction of a $160 million, 514 MW power plant at New SmyrnaBeach. (See NGI, Aug. 24, 1998)

A new Department of Energy (DOE) report is expected to show morenatural gas pipelines are needed to the Northeast. Secretary BillRichardson earlier this week pledged to seek Congressional help inthis area in order to reduce the region’s historic dependence onhigher-priced heating oil.

If regulators wanted further proof of need for additionalpipeline capacity to the Northeast, Independence Pipeline andTranscontinental Gas Pipe Line said they got it last month whendelivered prices in some markets shot up to nearly $20 per Dth.(See NGI, Jan. 24) Citing the January deliverability problem, thetwo pipelines separately asked FERC to deny the requests for a stayof the interim order conditionally approving their Northeastprojects.