Those advocating a fast track for approval of infrastructure projects should get their message through to energy bill conferees, FERC Chairman Pat Wood said last Tuesday, noting that energy legislation only “comes around one time in about 10 years.”

Wood’s comments came near the end of the Federal Energy Regulatory Commission’s technical conference to explore the National Petroleum Council’s natural gas study (see NGI, Sept. 29), which had “a lot that’s credible. The message is pretty honest. It’s not based on motherhood and apple pie. It’s based on data.”

Wood said it would be tough to achieve a number of the report’s recommendations, but he said the Congress could help out with the energy bill, which is in the final stages of crafting, if the bill provided a mandate for the cooperation of all agencies, local, state and federal, on energy infrastructure project applications in a joint review to be completed in one year. Wood suggested that anyone who could get that suggestion through to the conference committee should do so.

NPC representatives who compiled the report and testified on infrastructure issues had pointed out that currently once FERC has finished its review, project sponsors still may have to deal with the Army Corps of Engineers or the Coastal Zone Management Act in addition to local agencies.

Regulatory certainty, both from the federal government and the states, are necessary to encourage investment, NPC witnesses testified. On the state level, they recommended that barriers be removed to long-term contracts. Many long term contracts are expiring and customers are signing up for increasingly shorter terms, which also discourages investors. In 1998 about 50% of contracts signed were five years or longer, compared to 35% today. Also, the contracts often represent shorter hauls.

As for storage, the NPC study group said the amount of storage capacity currently being used is a “murky issue.” While there theoretically is 4.5 Tcf of working gas available, actual gas use in maximum yearly cycles suggests the number is closer to 2.9 Tcf, with 2.5 Tcf in the United States and the rest in Canada.

And looking at actual experience, 2.6 or 2.7 Tcf is safer. “If you get anywhere near 2.9 Tcf, you get some pretty extreme price swings. It pushes the limits of injection and withdrawal capability.” The group said that while current capacity can handle mild winters and even colder than normal winters, the U.S. would be vulnerable in a “significantly colder than normal winter.”

The heavy infiltration of natural gas into power generation, the decline in industrial use and the decline in fuel switchability has increased the seasonality of the use of natural gas and the volatility of prices. Winter heating peaks are exacerbated by the increased use of natural gas for power generation, because electric power also is increasingly being used for heating.

Former FERC Commissioner Jerry Langdon, who chaired the NPC coordinating subcommittee, said NPC members have been reporting progress and findings as they went along at regional meetings of the National Association of Regulatory Commissioners and would be presenting the total report at NARUC’s next combined meeting. The group also would be “walking around the country”, doing outreach to state public utility commissions, governors and the public.

The complete NPC report, including the back-up research for its conclusions is due to be published soon, possibly this week.

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