The Federal Energy Regulatory Commission, racing to complete preliminary work under Congress’ October mandate to begin permitting for an Alaska natural gas pipeline, issued a Notice of Proposed Rulemaking, including draft proposed regulations, on Nov. 15.
FERC’s proposed rule requests public comment on standards for creating an open season process that provides non-discriminatory access to capacity on any Alaska Natural gas pipeline project while ensuring economic certainty to support the construction of the pipeline and provide a stimulus for exploration, development and production of Alaska natural gas.
The commission’s proposed rule also requires that a public notice of an open season be issued by the project sponsor at least 30 days prior to the commencement of the open season through methods including postings on Internet web sites, press releases, direct mail solicitations, and other advertising. Next, the proposed rule lists the information about a proposed project that any notice of open season for an Alaska natural gas transportation project must contain. The proposed rule states that an open season for an Alaska natural gas transportation project must remain open for a period of at least 90 days. Finally, the proposed rule requires that capacity allocated as a result of any open season shall be awarded without undue discrimination or preference of any kind.
FERC said the Alaska Natural Gas Pipeline Act also outlines a specific timeline for the commission’s review and approval process for Alaska gas transportation proposals so that infrastructure may be in place to meet rapidly increasing energy demand. This timeline requires final commission action on any Alaska gas transportation proposal within 20 months after the commission determines that an application is complete.
The commission will conduct a one-day technical conference to gather public comments Dec. 3 in Anchorage.
The commission, which met the week of Nov. 8 with Alaska lawmakers and earlier with the Murkowski administration, was scheduled to issue draft proposed regulations for the line Nov. 18.
In October, Congress directed FERC to quickly permit the pipeline once certain requirements have been met. It also designated FERC as the lead agency for the National Environmental Policy Act process.
Wood will attend conference
FERC Chairman Patrick Henry Wood III and the three other commissioners plan to attend the technical conference in Alaska hoping to gain insight into how an open season on a gas pipeline that would transport Alaska North Slope natural gas to Lower 48 markets should be conducted, Tamara Young-Allen, a FERC technical affairs specialist, said Nov. 15.
Open seasons are held whenever a pipeline is built to allow gas producers and shippers to identify each other and demonstrate their interest in a pipeline to the government as well as come to terms with regulators on costs, tariffs and other considerations.
Young-Allen said FERC’s commissioners are open to any and all ideas about how the Alaska natural gas pipeline open season should be handled and are coming to Alaska to listen.
Alaska Gov. Frank H. Murkowski’s chief counsel John Katz and Alaska legislators have already met with FERC to indicate their willingness to work with the commissioners on moving the gas pipeline project forward and to ensure that Alaska’s interests are considered in federal rulemaking.
Legislature wants full disclosure
Rep. Ralph Samuels, R-Anchorage, who chairs the Legislative Budget and Audit Committee and Sen. Gene Therriault, R-North Pole, the committee’s vice-chairman, said Nov. 12 that they have presented a briefing paper to FERC outlining Alaska’s requests regarding informational criteria, timing and capacity allocation through Alaska open seasons.
Specifically, the paper requests full disclosure of information on the pipeline, potential expansions, and demand for pipeline capacity, as well as that capacity be allocated only through publicly conducted open seasons, with smaller shippers entitled to their full capacity requests. Additionally, the paper advocates that tariffs for both original and expansion capacity be calculated on a “rolled-in” basis, thereby eliminating discrimination in tariffs between shippers based on when they sign up for service.
“What we did is get our foot in the door of FERC’s public comment process to make sure Alaska’s voice is heard on access issues. The more access we have to a gas line, the more potential exploration, jobs, revenue, and related development we will see in the state. We want to encourage investment in natural resources in our state both now and for years to come,” Samuels said.
Therriault said all North Slope producers should have the opportunity to get their gas to market. “The regulations that are enacted today will have an effect on Alaska’s revenue potential for generations to come, making it extremely important that they be well thought out, implemented and take Alaska’s best interest to heart,” he added.
The briefing paper is available upon request from the Legislative Budget and Audit Committee, the lawmakers said.
Technical conference set for Dec. 3
The FERC technical conference is scheduled to be held 9 a.m. to 4 p.m. on Dec. 3 in the Municipality of Anchorage’s Assembly Chambers, downstairs from the Z.J. Loussac Library, 3600 Denali Street.
A complete copy of FERC’s draft proposed regulations for the Alaska natural gas pipeline may be viewed at the commission’s web site, http://www.ferc.gov/ under “What’s New.”
Interested parties are urged to nominate speakers for the conference by filling out a short form on the FERC web site by Nov. 26: http://www.ferc.gov/whats-new/registration/alaska-1203-speaker-form.asp . The specific agenda will be announced in a notice to be issued later.
Also, comments may be filed electronically via the eFiling link on FERC’s web site at http://www.ferc.gov. Commenters unable to file comments electronically must send an original and 14 copies of their comments to: Federal Energy Regulatory Commission, Office of the Secretary, 888 First Street N.E., Washington, DC, 20426.
The public comment period on FERC’s draft regulations is set to end Dec. 17 with the final regulations being adopted Feb. 10. Young-Allen said FERC put the gas line regulations on a fast track because the commission has only 120 days from the implementation of the Alaska Natural Gas Pipeline Act on Oct. 13 to develop the rules.
Young-Allen said the regulations will set out the standards of conduct for building the Alaska gas pipeline, and once the rules are final, FERC will await applications from would-be builders. The commission has received no applications to date, she added.
If an application is approved, the applicant will then be able to move forward, subject to FERC’s rules, with construction of the line, which has been described as the largest private construction project ever undertaken in the United States. It is expected to take 10 years to permit and construct.
