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Conference on Natural Gas Interchangeability Held


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FERC Holds Conference on Natural Gas Interchangeability: On Wednesday, February 18, 2004, the Federal Energy Regulatory Commission (FERC) held a conference to begin a dialogue with industry participants on policy issues arising from natural gas interchangeability. As used by the gas industry, interchangeability refers to the extent to which a substitute gas can replace gas normally used by a customer without unduly interfering with the operation of the customer’s natural gas equipment.

Participating in the proceedings was a coalition of industry representatives, including associations and consumer representatives such as the American Gas Association, the American Petroleum Institute, the Interstate Natural Gas Association of America, the Gas Process Consumers Group, the International LNG Alliance and the Natural Gas Supply Association.

The coalition acknowledged that a significant increase in liquefied natural gas (LNG) imports likely would require FERC to adopt new gas quality policies and standards, as the thermal content of LNG imports can vary significantly, depending on the country of origin. The coalition advocated timely solutions to the issues of reliability and commercial considerations posed by gas quality differences. Furthermore, the coalition argued that any solution should achieve balance by retaining operational flexibility for infrastructure operators while not limiting diverse supply opportunities.

FERC held the conference, in part acting on a recommendation included in the National Petroleum Council’s recent report, Balancing Natural Gas Policy—Fueling the Demands of a Growing Economy. In addition, several recent cases before the Commission have underscored the growing importance of quality and interchangeability issues for the natural gas industry. The Commission expressed a need to gather more information to evaluate what role it should take to address the impacts of natural gas interchangeability on the nation’s energy consumers and the companies regulated by the Commission.

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