Natural gas quality interchangeability docket no plo4 3
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Natural Gas Quality & Interchangeability Docket No. PLO4-3. Jay Ellzey, Director Production Services & Regulatory Affairs Chevron Natural Gas May 17, 2005 Technical Conference. Discussion Points. Obstacle Recommendation Practical application Policy Objective Public Interest.

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Natural Gas Quality & Interchangeability Docket No. PLO4-3

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Natural gas quality interchangeability docket no plo4 3

Natural Gas Quality & InterchangeabilityDocket No. PLO4-3

Jay Ellzey, Director

Production Services & Regulatory Affairs

Chevron Natural Gas

May 17, 2005 Technical Conference


Discussion points

Discussion Points

  • Obstacle

  • Recommendation

  • Practical application

  • Policy Objective

  • Public Interest


Obstacle regulatory uncertainty

Obstacle: Regulatory Uncertainty

  • Wasted Energy Capital Investment

  • Unnecessary Supply Loss Risk

  • Inefficient Supply Response

World Consumption = 251 Bcfd

FSU – 35%

1953 Tcf

North America – 5%

256 Tcf

Europe – 4%

203 Tcf

Middle East – 36%

1980 Tcf

Africa – 8%

418 Tcf

Africa3%

Middle East8%

Asia Pacific – 8%

445 Tcf

North America29%

South America – 5%

250 Tcf

Asia Pacific

12%

FSU24%

South America 4%

Europe 20%

Resources (Tcf)

Source: U.S. DOE – EIA (2003 figures)


Recommendation

Recommendation

  • Grant the Petition for Rulemaking Filed Yesterday

  • Adopt Nationwide Gas Quality and Interchangeability Regulatory Specifications

    • CHDP 15 Degrees Fahrenheit Minimum

    • 1400 Wobbe Index

    • 4% Maximum Inert

    • 1.5% Maximum Butanes Plus

  • Create Non-Discriminatory “Safe Harbor” Tariff Mechanism Maximizing Supply


Practical application

Practical Application

  • Adopt Nationwide Specification for Certainty

  • Require Tariff Safe Harbor Concept for Supply Flexibility

  • Require Tariff Language Establishing the Use of Aggregation, Blending and Pairing on a Non-Discriminatory Basis

  • Maintain Tariff OFO as Safety Mechanism

  • Use Economic Analysis to Determine Appropriate Remedial Action on As-Needed Basis

  • Ensure Availability of Natural Gas Quality Data


Policy objective

Policy Objective

  • Maintain Infrastructure Safety and Integrity

  • Continue Supply Flexibility

  • Increase Regulatory Certainty

  • Position U.S. to Safely Access New Domestic and Imported Supplies

  • Develop Flexible and Various Supply

  • Deploy Energy Capital Efficiently

  • Avoid Distorted Market Signals for Processors


Conclusion satisfy public interest with workable regulatory solution

Maximize SupplyRegulatory Certainty National Specifications Tariff Safe Harbor Economical Remedial Action

Safety OFO Mechanism

Conclusion: Satisfy Public Interest With Workable Regulatory Solution


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