Natural Gas Quality and Gas Interchangeability
Quality and interchangeability issues are being addressed in individual pipeline and LNG proceedings before the Federal Energy Regulatory Commission (FERC). In June 2006, FERC issued a Policy Statement on Natural Gas Quality and Interchangeability that largely followed industry recommendations for implementing a process of developing pipeline-specific gas quality and interchangeability specifications (PL04-3). The policy statement is being implemented in individual proceedings, with shippers and pipelines negotiating modifications to pipeline tariffs as necessary to address gas quality issues. In October 2007, FERC posted on its website a report by the U.S. Department of Energy's National Energy Technology Laboratory regarding LNG Interchangeability and Gas Quality. This report makes several statements regarding the ability of appliances to handle a broad range of gas compositions without material impact that are of concern to AGA members. The AGA FERC Regulatory Committee and the Bulletin 36 Ad Hoc Committee are working together to raise these concerns with the appropriate staff at FERC.
Gas quality specifications should be designed to ensure that gas tendered to, and delivered by, the interstate pipelines is safe and reliable, and meets the requirements of end-use applications. Gas quality specifications should not unreasonably limit the development of new or expanded gas supplies, or limit the diversity of sources of gas supply. Changes to pipeline tariffs should be explored that would establish acceptable gas quality specifications for supplies delivered to the pipeline specifications that will meet reasonable end-use requirements and ensure system safety and integrity. The industry consensus is to do this through the control of hydrocarbon dew point, various components in the gas and interchangeability indices. The existing flexibility used by interstate pipelines to meet operational safety and integrity and end-use gas quality needs must remain as part of the industry-wide infrastructure to supply merchantable natural gas to customers.
AGA has formed two ad hoc task groups with industry-wide participation to revise AGA Report No. 4A, Natural Gas Contract Measurement and Quality Clauses, and AGA Research Bulletin No. 36, Interchangeability of Other Fuel Gases with Natural Gases. The work of these two ad hoc task groups will include issues related to the effects of various components in the gas supply, hydrocarbon dew points, and the merits and limitations of the various interchangeability indices. The revised AGA 4A is expected to be issued sometime during the 3rd quarter of this year. Work on Bulletin 36 continues as the task group awaits receiving data from several appliance testing programs currently underway.