In This Issue

Conference on Emergency Reallocation of Natural Gas

On April 23, 2002 at 9 a.m. in the Commission Meeting Room (2C), staff from the Federal Energy Regulatory Commission (FERC or Commission) and from the Department of Energy (DOE) will convene a technical conference to begin discussions with interested parties on whether and how to clarify, expedite and streamline processes for reallocating natural gas among shippers, pipelines, and local distribution companies (LDCs) in today’s non-vertically integrated industry in the event of a disaster, whether natural or otherwise.

Commission and DOE staff will provide an overview of their current processes for emergency reallocation of natural gas. Commission staff will review FERC-related statutes and regulations and discuss the provisions related to reallocation and compensation contained in natural gas companies’ tariffs. DOE staff will review DOE-related statutes and regulations. Other participants, including relevant Federal agencies and representatives of industry, will describe their responsibilities and present their views.

In order to more clearly focus the discussion at the technical conference, other potential presenters should consider the following questions and present their responses at the conference:

  • What industry practices exist to respond to emergency-related reallocations of natural gas? Does the industry need additional flexibility to respond to such situations? What are the antitrust implications of shippers, pipelines, and LDCs coordinating reallocation response?
  • Are there any antitrust limitations that would hinder the ability of industry to communicate and coordinate logistical and other information in the event of an emergency? If so, can and should remedies be crafted to facilitate such communication and coordination?
  • What existing state processes are there which may be useful to coordinate emergency responses across a diffuse community of industry and regulatory interests ?
  • Are there any existing regulations, authorities, and business practice standards that could be relied on to ‡facilitate transporting emergency reallocations of natural gas among shippers and across multiple pipeline systems? Are these sufficient to ensure the timely and effective reallocation of available natural gas supplies? If not, what changes may be warranted? Are modifications to, or waivers of, regulatory requirements called for?
  • How can natural gas requirements be identified and prioritized so that during emergencies efforts can be made to ensure delivery of available natural gas supplies to the most important requirements? Is it necessary to establish a process to collect and assess this information and keep it up-to-date in anticipation of future emergencies?
  • How do we ensure adequate emergency coordination among pipeline operators?
  • What types of decisions would natural gas pipeline operators need from regulators’and in what time frames would those decisions be required’to ensure adequate emergency response? What are the antitrust implications of pipeline companies coordinating these decisions? How should compensation be addressed?
  • What information on emergency status is available in real-time to keep relevant government officials informed? What additional information might regulators require to make appropriate time-critical decisions in an emergency?
  • What types of events or contingencies is the industry already prepared to face? And what types of contingencies is the industry not yet prepared to face? What should our expectations be as to what is reasonable to accomplish and expect?

FERC will issue further details on the conference, including the agenda and a list of participants, as plans evolve. For additional information, please contact Carol Connors in the Office of External Affairs at