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Riordan answers unyielding GTI critics.

John Riordan acknowledged the roadblocks the Gas Technology Institute (GTI) faces in its fight for survival when he addressed the Natural Gas Roundtable in Washington, D.C. on July 28. He laid out the rationale for GTI's request to the Federal Energy Regulatory Commission (FERC) that the federal agency collect $48 million in surcharges on non-discounted gas sales in each of the next five years and pass that along to GTI for a broad-based, "bridging" natural gas research program which is needed until Congress passes an energy bill with a permanent R&D program run by the Department of Energy.

But reflecting the opposition to the GTI proposal, Dena Wiggins, the general counsel for the Process Gas Consumers Group (PGCG), walked around the room handing out disapproving press releases after Riordan spoke. "We are disappointed that GTI has reneged on its promise to phase out its reliance on this unnecessary, government-mandated program and expect that others, including producers groups such as the Natural Gas Supply Association and Independent Petroleum Association of America, will also oppose GTI's proposal," she said. GTI received FERC-collected stipends between 1998 and this summer stemming from a legal settlement between FERC and the Gas Research Institute (GRI), which was merged into GTI in 2001.

Riordan himself, during his talk, admitted that the GTI proposal faced opposition. But he added, "Support for our proposal has been so much better than I would have expected a couple of years ago."

The American Gas Association supports the GTI proposal, feeling that the impact upon customers will be minimal. At 0.56 cents per dekatherm, a residential customer using 120 dekatherms per year would only pay 67 cents annually.

The AGA decided to support the proposal after GTI agreed to a number of concessions on how the new research program would be run. Martin Edwards, spokesman for the Interstate Natural Gas Association of America, said his group, too, needed those concessions as its price of support. Those concessions included such issues as keeping a very tight lid on GTI administrative expenses, giving industry more say in the research agenda, and developing a very broad research agenda which reaches into pipeline operations and integrity management, to name a few specific INGAA goals.

"In the past, GTI has done research into too many things that didn't make a big difference, like gas vehicles and gas logs for the home," Edwards stated.

Riordan sought to answer critics who have questioned the utility of GTI research. He alluded to work in the area of coalbed methane development, polyethylene plastic pipe and safety features for residential gas furnace and boilers.

But his major emphasis was on the disconnect between U.S. demand for natural gas and supply, and the fact that major new supply sources like imported LNG and Alaskan gas face significant hurdles. Rather than depend on those unpredictable sources, Riordan suggested that the U.S. would be better served by developing a larger percentage of the technically recoverable gas from unconventional onshore and very deep gas resources in the Gulf of Mexico. This is where a GTI research program can make a difference, he said.

He said the hard-to-get-to natural gas reserves amount to 475 Tcf, "more than one-third of all technically recoverable gas resources in the Lower 48." He added, "In the offshore, many of these technically recoverable resources are uneconomic because technology has yet to be developed to cost-effectively produce all the gas that is found in very deep water or in deep formations on the shelf."
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Title Annotation:Government Guidelines; Gas Technology Institute; John Riordan
Publication:Pipeline & Gas Journal
Geographic Code:1USA
Date:Sep 1, 2004
Previous Article:Editor's notebook.
Next Article:FERC approves second LNG terminal.

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