Congress Questions Delay of Natural Gas Pipelines
THE energy-dependent Northeast is looking to natural gas to help ease its reliance on imported oil, and the apparent slow pace of of a little known federal agency that must approve construction of interstate gas pipelines is drawing criticism in Congress. The Federal Energy Regulatory Commission (FERC) currently has a backlog of about 20 projects, which industry officials estimate could help the country ultimately reduce its dependence on oil by 750,000 barrels per day, or about one-tenth of current imports.
Despite recent assurances from the Department of Energy (DOE) and FERC that they are taking steps to expedite decisions on natural gas pipelines and transportation restrictions in response to the Iraqi crisis, the two agencies are becoming the focus of congressional impatience over the backlog.
Rep. Philip Sharp (D) of Indiana, chairman of the House Energy and Power Subcommittee, has scheduled a hearing for today in which he and other representatives - particularly from the Northeast - are expected to send a strong message to DOE and FERC to expedite decisions on these proposals.
A foreshadowing of that criticism came in an Aug. 6 letter from Mr. Sharp to FERC Chairman Martin Allday regarding the commission's decision to further delay construction of the Iroquois Pipeline, which would bring Canadian gas to the Northeast. The Iraqi showdown is a reminder, the letter said, ``that our nation is growing ever more dependent on oil imports, and that the Persian Gulf remains a volatile, treacherous and unpredictable place. Your decision helps maintain the Northeast's unacceptable dependence on imported oil.''
Additionally, on Aug. 15 four congressmen from the Northeast, Reps. Edward Markey (D) of Massachusetts, Joe Moakley (D) of Massachusetts, Norman Lent (R) of New York, and Ronald Machtley (R) of Rhode Island, wrote Energy Secretary James Watkins urging him to approve Canadian gas imports which would fill the Iroquois project, citing the Iraqi crisis and its effect on oil supplies as a major reason.
However, experts agree that for the short term, very little can be done to replace oil with natural gas. One reason is that gas prices in the first half of the year have been low. Energy analyst Adam Sieminksi says gas prices have been between $1.30 and $1.40 per thousand cubic feet, already providing incentives for companies that are able to use both gas and oil to cut oil use.
Michael German, senior vice president of the American Gas Association, notes that almost all of the estimated 150 million barrels of oil used in dual-fuel capable facilities have already been dropped in favor of gas. But gas industry officials say there may be ample room to maneuver in the next year.
Gas industry optimistic
``We could save 480,000 barrels per day within a year with a little additional gas pipeline capacity, which is already planned, and the installation of new equipment,'' Mr. German says.
The American Gas Association estimates that more than 325,000 barrels per day of oil could be displaced with natural gas in the Northeast if FERC were to approve four pipelines proposed for the region. Such numbers assume more fuel-switching and equipment conversions. The Iroquois Pipeline could replace about 100,000 barrels per day of oil. Fuel oil marketers caution that facilities relying on natural gas may find supplies tight in December as demand rises.