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FERC relents on key issues in final posting rule.

The Federal Energy Regulatory Commission walked a fine line with its final rule on natural gas flow posting, reducing the number of intrastate pipelines--called major non-interstates for the purpose of this rulemaking--that will have to comply while at the same time ditching a former proposal which interstates had opposed.

The final rule increased the minimum delivery threshold defining major non-interstate pipelines from 10-50 billion Btu/y. It also canned an earlier proposal to require both major non-interstate pipelines and interstate pipelines to post actual flow volume in addition to scheduled flow volume at each receipt and delivery point with a design capacity equal to or greater than 15 million Btu/d.

In compliance with regulations adopted in Order No. 637, interstates post daily information on the Internet about scheduled natural gas volumes for most of the continental U.S. Shippers and other market participants rely on information posted by interstate pipelines to price both transportation and commodity transactions. But FERC believed the interstate posts alone were an insufficient picture of the supply and demand fundamentals that underlie the interstate natural gas market.

Because the commission's existing pipeline posting regulations do not apply to non-interstate pipelines, market observers cannot determine the availability of natural gas and transportation on a non-interstate pipeline to the same extent as they could for an interstate pipeline. These gaps in information are significant because major gas flows between producing basins and interstate markets occur on non-interstate pipelines and are invisible to the market.

For instance, there is a significant lack of information about supply-and-demand fundamentals in the south-central region of Texas, Louisiana, and Oklahoma, and southern California. An Energy Information Administration study named 28 national market centers of which 13 are served by a combination of interstate and non-interstate pipelines. The 2005 Energy Policy Act gave FERC authority to require new gas market transparency reporting.
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Title Annotation:Newsreel; Federal Energy Regulatory Commission
Comment:FERC relents on key issues in final posting rule.(Newsreel)(Federal Energy Regulatory Commission)
Author:Barlas, Stephen
Publication:Pipeline & Gas Journal
Geographic Code:1USA
Date:Jan 1, 2009
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