It provided for the complete unbundling of transportation, storage, and sales; the customer the local gas distribution system now chooses its gas supplier and if it has options the pipeline s to transport its gas. In the current federal regulatory environment, only interstate pipelines are directly regulated as to the transportation of gas in interstate commerce.
Investor-owned local distribution companies LDCs are typically regulated by state public service commissions regarding the services they provide.
Natural gas producers and marketers are not directly regulated by the federal government as to rates and related matters. Interstate pipeline companies are regulated regarding the rates they charge, the access they offer to their pipeline facilities, and the siting and construction of new pipelines. Similarly, local distribution companies excluding most municipally owned public gas systems are regulated by state public service commissions, which oversee their rates and construction issues, and ensure that proper procedures exist for maintaining adequate supply to their customers.
In the late s and early years of the twenty first century, APGA has been largely concerned with attempting to ensure that the tariff rates for pipeline services are set at just and reasonable levels and that pipelines do not discriminate with respect to the terms under which they provide such services.
APGA has also been at the forefront of those seeking price transparency in the marketplace as a means of fostering more stable prices for natural gas. In addition, APGA has been seeking to promote the efficient and judicious use of natural gas to reduce the extent to which demand for the product outruns the available supply and drives prices to even more exorbitant levels. Skip to main content Press Enter. Sign in. Skip auxiliary navigation Press Enter. Suddenly, the FPC faced treating every producer — from big corporation to small wildcat operator— as an individual public utility.
To simplify its regulatory process, the agency devised a regional plan that set up temporary low-ceiling prices. When energy shortages took the national stage in , President Nixon announced he would push for natural gas price increases "to stimulate development of new reserves and ease the nation's fuel shortage. Although this doubled the s regional price, it remained below the market price.
Producers saw no incentive to explore for new resources and —even worse — saw no reason to sell to the interstate pipelines. Producers instead chose another option. Since intrastate sales and prices stayed exempt from the NGA, they were free to sell their natural gas at the market rate as long as it stayed in-state. While producer states mostly in the South had plenty of gas, consumer states in the North faced a crisis.
From through , schools and factories closed throughout the upper Midwest and Northeast due to natural gas shortages. The following year Congress passed the Natural Gas Policy Act, enabling FERC to begin the unpleasant task of untangling the regulatory knot-work that had all but strangled the interstate natural gas system.
In order to get gas flowing to all parts of the country once more, FERC set maximum price ceilings for all wellhead gas. Prices rose throughout the industry and reverberated all the way into the home. But higher prices soon lowered demand and by , natural gas prices were declining again. In , FERC ended maximum price ceilings for new wellhead gas , deregulating new gas wells.
Here at last was an incentive to explore for natural gas. While the order was voluntary, this converted pipeline companies from merchants of natural gas to common carriers, meaning pipelines would not take ownership of natural gas but merely provide the transportation service.
Local distributors would buy gas directly from producers and only pay the transmission price to the pipelines. Pipelines who participated in what was an open access program no longer needed approval from the FERC for each gas transmission , which allowed them to move gas more rapidly.
It also allowed pipelines to use interstate pipelines for intrastate transmissions. Thus, the new regulatory framework emerged. In short order, market centers were set up at pipeline hubs that allow interstate, intrastate and local distribution pipelines to physically connect.
This interconnection redirects natural gas from one line to another and as a result, local distributors now buy natural gas directly from the producers at market hubs at the market rate. If a local utility is buying on the spot market at a city gate market, it will pay a price which includes transportation costs.
The gas is then diverted to the distribution pipeline that serves the local utility. Between and , natural gas consumption rose by 17 percent, driven in part by lower prices, an expanding economy and construction. Pipeline expansion was one of the major factors contributing to price decline, bringing more gas up from the Gulf of Mexico and down from Canada into the northeastern U.
In alone, 41 natural gas pipeline projects were placed in service. The industry with the highest growing demand for natural gas was electricity generation. In , Texas utilities generated By , that amount had increased to Three decades later in , the residents of Baltimore, Maryland did the same, becoming the first city in the United States to harness the resource to illuminate their thoroughfares. While in its early incarnation natural gas was used almost exclusively for light, in Robert Bunsen of Bunsen burner renown pioneered new ways to utilize the thermal properties of natural gas.
In natural gas was first used to provide central heating and large-scale hot water supplies in London. Once natural gas was in common employ heating water, it was not so great a leap to use it beneath boilers in the creation of steam for industrial purposes. This paved the way for the use of natural gas in the generation of electricity, and so evolved an industry that today heats oceans of bath water and acres of casseroles, all while lighting our cities and powering the information age.
The total output of the turbine was 4 megawatts MW. Before this in , Sun Oil had used a gas turbine to generate air and electricity for private use at its chemical plant in Philadelphia. Clearly, Switzerland was a busy place for emerging natural gas technologies in the s. In , North America claimed its piece of the pie when a power plant in Port Mann, British Columbia became the largest gas plant in the world, operating with a MW capacity. Producing Natural Gas. Natural gas can be hard to find since it can be trapped in porous rocks deep underground.
Scientists use many methods to find natural gas deposits. They may look at surface rocks to find clues about underground formations. They may set off small explosions or drop heavy weights on the surface and record the sound waves as they bounce back from the rock layers underground.
They also may measure the gravitational pull of rock masses deep within the earth. If test results are promising, the scientists may recommend drilling to find the natural gas deposits. On average, 27 out of every exploratory wells produce gas. The others come up "dry.
On average, 80 out of every developmental wells yield gas. Natural gas can be found in pockets by itself or in petroleum deposits. After natural gas comes out of the ground, it goes to a processing plant where it is cleaned of impurities and separated into its various components.
Approximately 90 percent of natural gas is composed of methane, but it also contains small amounts of other gases such as propane and butane. Natural gas may also come from several other sources. One source is the gas found in coalbeds. Until recently, coalbed gas was just, considered a safety hazard to miners, but now it is a valuable source of natural gas. Another source of natural gas is the gas produced in landfills.
Landfill gas is considered a renewable source of natural gas since it comes from decaying garbage. The gas from coalbeds and landfills accounts for three percent of the total gas supply today, yet their contribution could double by the year Today natural gas is produced in 32 states, though just three states--Texas, Louisiana, and Oklahoma-produce 61 percent of the country's natural gas.
Altogether, the United States produces nearly 22 percent of the world's natural gas each year. In the United States imported 12 percent of its natural gas from other countries-mostly from Mexico and Canada. How does natural gas get to you, the consumer? Usually by pipeline. More than one million miles of underground pipelines link natural gas fields to major cities across the United States.
Natural gas is sometimes transported thousands of miles by pipeline to its final destination. A machine called a compressor increases the pressure of the gas, forcing the gas to move along the pipelines.
Compressor stations, which are spaced about 50 to miles apart, move the gas along the pipelines at about 15 miles per hour. Some gas moved along this subterranean highway is temporarily stored in huge underground reservoirs.
The underground reservoirs are typically filled in the summer so there will be enough natural gas during the winter heating season.
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