About Piping Gas - October 28, 2005

I need to correct a statement in your article today on the need to increase the amount of NG pipes and improve the permitting process for those pipes. You quote INGAA as saying, "The association says that some of that pipeline is needed right now, given that areas of the country -- particularly California and the Northeast -- have bottlenecks that are creating severe price hikes."

This is simply not true and I'm concerned that your misunderstanding of the situation in California today allows you to repeat such mistruths.

California has added significant pipe and NG storage capacity in the past 5 years. Our capacity additions have been at a much greater rate than demand growth. We now enjoy a significant surplus in capacity in both areas. Our pipes run 60% - 70% full most of the year. While our interstate pipes are not capable of supplying all of California's needs on peak, we plan for the combination of interstate pipe capacity and our in state NG storage withdrawal capacity to provide more total capacity than we need, with an ample surplus. As you may have noticed, this excess capacity means that our wholesale market prices at our borders are now some of the lowest in the nation and have been almost the entire year. We do have minor congestion issues inside our state, but they do not have an observable impact on border prices.

We also have vastly improved the NG pipeline and NG storage permitting process. The last several interstate pipelines were permitted jointly with FERC in an expedited manner. Our public utilities commission supports the addition of NG infrastructure when and where needed. We now support both utility and private NG storage projects in California. I know California is the state everyone loves to hate, but California bashing in this instance is simply not warranted. Please stop redistributing false urban myths.

David Maul
Manager Natural Gas and Special Projects Office
California Energy Commission

While your recent article rightly focuses on the long term need to increase supply and reduce natural gas prices by building more pipelines, it appears to us that there may be a more short term solution available: turn on more wind.

Everyone now knows that the gas market is so tight that even a small decrease in demand can reduce prices. Earlier EIA studies indicate that using short term solutions like increased energy efficiency and more wind power, both of which could come on line quicker than new gas from Alaska, could work to reduce natural gas prices. Fortunately, the utility sector, a huge consumer of natural gas, is well placed to move in this direction. In our view, it is not just that energy efficiency and renewables are a clean idea. It is that they are literally the only policies in the short term that can reduce natural gas prices for the petrochemical industry, the fertilizer industry, and, of course, the rest of us, this winter.

Marchant Wentworth
Washington Representative for Clean Energy
Union of Concerned Scientists