FERC Natural Gas 101

We attended the FERC Natural Gas 101 in San Diego last week. The course was presented by EUCI (Electric Utility Consultant, Inc.). The presenters were Richard Lorenzo, Attorney At Law, and Jay Matson, Attorney At Law - both the firm Loeb & Loeb L.L.P. out of Washington, DC. Their profiles are at the back of the presentation .

The idea here is to share with you the Federal Energy Regulatory Commission's regulation of the Natural Gas Industry. Oddly enough you'll find they have no stand on natural gas as a transportation fuel...another opportunity for Clean Cities.

First you'll find the recording of the entire meeting - next in the four-page introduction you'll find the agenda...by following the agenda you can estimate where on the tape that portion of the program may be, thus being able to focus in on areas of interest. The recording follows the presentation materials. Plus you can listen in on the interaction of the other attendee and myself with the education team's responses. All in all, very interesting and eye opening. rc3

The audio recording of the meeting - about 6½ hours.

The four-page introduction (590 KB PDF).

The PDF version of FERC Natural Gas 101 (81.3 MB, 220 pages).

The agenda:

FERC's Role in the Natural Gas Industry

• Where Does Natural Gas Come from?
  • The origin of natural gas
  • Exploration and extraction
  • Production and Processing
  • Gathering, transportation, and distribution
• History of the US Natural Gas Industry
  • Early attempts at regulation
  • The origin and evolution of the Natural Gas Act
  • Price deregulation at the wellhead
  • The "take or pay" problem
  • The genesis of deregulation
• A Brief Overview of FERC's Responsibilities
  • Who and what FERC regulates
  • "First sales"
• FERC's Jurisdictional Limitations
  • Hinshaw pipelines
  • The gathering exemption
  • The primary function test
• Regulation of Gas Transportation
  • NGA Section 7
  • Deregulation and open access
  • Order Nos. 436, 500, 636, and 637
• Storage of Natural Gas
  • Types and locations of storage facilities
  • Certification
  • Order No. 678
  • Reporting and posting requirements
• Pipeline Rates
  • The "filed rate" doctrine
  • Setting initial rates
  • NGA Sections 4 and 5
  • Calculating rates, including return on equity and capital structure
  • Market-based and negotiated rates
  • Incentive rates
  • Time-differentiated and peak/off-peak rates
• FERC Procedure
  • FERC's organizational structure
  • Types of filings/cases
  • A "typical" litigated case
  • Settlements
  • Rehearings and appeals
• Natural Gas Markets
  • Reporting standards
  • Code of conduct
  • Order Nos. 644, 670, 673, and 677
  • Enforcement
• Standards of Conduct
  • Order Nos. 497, 2004, and 717
  • Key definitions
  • Fundamental requirements
• Liquefied Natural Gas
  • History
  • Consumption, production, and importation
  • Regulatory issues
  • Operational issues
  • Rates
  • Challenges to development
• Future Challenges
  • Cap and trade
  • Carbon capture and sequestration
  • Carbon dioxide pipeline regulation
  • Pending legislation