In his first appearance before the Natural Gas Roundtable since taking over the reins at FERC a year ago, Chairman Pat Wood said last Thursday that “by and large” the Commission’s job of establishing competitive natural gas markets was already done, and that its task now was to make sure the high level of competitiveness in the markets continued. Toward that aim, he announced the agency plans to hold its first ‘State of the Gas Markets’ conference in late October to explore gas supply and demand issues.

The Oct. 25 conference to be held at FERC headquarters in Washington, DC, will focus on three areas: 1) regulatory policies for liquefied natural gas (LNG) import facilities, an area that Wood thinks will be especially critical to future gas markets; 2) FERC policies in the offshore; “there’s a lot of unresolved [issues]” in the offshore, even though a recent court decision provided a “little more legal clarity;” and 3) the flexibility of current pipeline operators to meet the needs of historical local distribution customers and generators.

The conference will be an open forum for market participants of “all flavors and all stripes” to address these issues, he told energy executives. Given the importance of LNG to future gas markets, Wood believes the Commission must iron out the jurisdictional issues involving LNG as quickly as it can, and the industry needs to focus on developing new LNG and associated facilities. “It is critical to make the math work 10 years from now that we start taking steps today to get infrastructure built.”

The LNG facilities “are the gateway to the U.S. market, so FERC needs to pay attention to how they operate and make sure they don’t operate in an unduly discriminatory manner,” said Commissioner William Massey, who also was at the roundtable session. “There are some [LNG] developers that are raising concerns about [FERC’s open-access] policy, and they want exemptions from that policy because they want to build dedicated facilities. I do think this is an area where we have a lot to learn. The jurisdictional question is a key [issue],” particularly when it comes to offshore LNG facilities, he noted.

As evidence that the Commission is committed to energy infrastructure development, Wood pointed to the 19 project certificates and preliminary determinations on non-environmental issues that were issued last Wednesday. “In terms of number of cases,” FERC’s release of 19 gas project decisions in a single day “may very well” be a record for the agency, Massey noted.

Wood said he hasn’t heard anything from the White House about when it plans to nominate a candidate to fill the empty slot at the Commission, or to replace Commissioner Linda Breathitt whose term will officially end when Congress adjourns for the year. Unless there’s “some very fast action,” he said the Commission could very well enter 2003 with only three commissioners.

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