Posted on 09/24/2002 9:43:28 AM PDT by Ernest_at_the_Beach
His government service includes both the Criminal and Civil Divisions of the U.S. Department of Justice, and serving in a civilian capacity as Chief of the Regulatory Law Division in the Army's Office of The Judge Advocate General.
Prior to entering Government Service, Chief Judge Wagner was in the private practice of the law with Kramer, Dye, McNabb & Greenwood in Knoxville, Tennessee.
Chief Judge Wagner has extensive experience in mediation and other forms of alternative dispute resolution. He has successfully resolved many large multi-party cases at the Commission and has given many lectures on the subject.
He has been an Administrative Law Judge at FERC and its predecessor, the FPC, since l974, and has been Chief Judge since l978.
Chief Judge Wagner has received numerous awards including the Department of the Army's highest award, the Decoration For Exceptional Civilian Service. He appears in four separate editions of Who's Who.
Not so. Natural gas pipelines are regulated by the Federal Energy Regulatory Commission. El Paso had a pipleline with a certified capacity. It was obliged by law and contract to make all that capacity available. From the judgement:
26. El Paso Pipeline had a certificated capacity during the relevant period of 3,290 MMcf/d to its California delivery points. El Paso Pipeline never requested authority to abandon any portion of that certificated capacity. Under these circumstances, El Paso Pipeline was under an obligation to make 3,290 MMcf/d available to its California delivery points.27. Further, under Section 16.3 of El Paso Pipeline’s ten-year settlement approved by the Commission (El Paso Pipeline Exhibit No. EPNG 14), El Paso Pipeline committed to no decrease in the quality or the quantity of gas during the term of the settlement. That service obligation was 3,290 MMcf/d to California.
28. By not making the 3,290 MMcf/d available El Paso Pipeline not only violated § 284.7 and § 284.9 of the Commission’s regulations, but also its commitment under the ten-year settlement. Since the average flow during the relevant period was only 2,594 MMcf/d, there was a withholding of 696 MMcf/d of capacity to the California delivery points.
http://www.ferc.fed.us/RP00-241-006-09-23-02.pdf
Apparently, a pipeline company is obliged to either run its line at capacity or have that capacity reduced.
47. The record is clear that El Paso Pipeline could have operated at or near MAOP without violating the Department of Transportation’s regulations and could have made available an additional 210 MMcf/d of capacity to its California delivery points. Not doing so was a violation of El Paso Pipeline’s certificate obligation to transport 3,290 MMcf/d to the California border. The Chief Judge can understand a reluctance to run a pipeline at the allowable and expected MAOP when it has just suffered a rupture in its pipeline which resulted in deaths. At the same time, he finds that El Paso Pipeline was under a duty to maintain its pipeline in a condition that would permit operation at or close to MAOP, if necessary, to meet its certificate obligations.
Very good analysis Cedar Dave!
At the time, it was natual gas prices that went crazy. I now that the Sumas border price skyrocketed and seemed strange. I do think that there was some strange things happening in terms of natural gas capacity, the basic gas price was pretty high. If El Paso points a finger to the gasoline pipeline in Bellingham that blew up and killed 3, I suspect they can raise a good issue of going to max pressure on equipment they didn't trust.
However, this is politics and not science! El Paso will need to fight this on a political/public relations basis rather than filling the equivalent to a request for a reversal.
I suspect that Wagner, if he acts as I suspect, is tossing a bone to California with this and is planning on a swift kick to California's collective groin on some electric issues.
This should be interesting to watch.
On the capacity issue:
Since the average flow during the relevant period was only 2,594 MMcf/d, there was a withholding of 696 MMcf/d of capacity to the California delivery points.
The record is clear that El Paso Pipeline could have operated at or near MAOP without violating the Department of Transportation’s regulations and could have made available an additional 210 MMcf/d of capacity to its California delivery points. Not doing so was a violation of El Paso Pipeline’s certificate obligation to transport 3,290 MMcf/d to the California border.
Why the 696 MMcf/din one place and 210 MMcf/d in another?
Damn the torpedoes! Full speed ahead!
Thanks for the PDF link to the judge's order.
If the Pipeline represents half of the total capacity into California then the per centage of total gas witheld would be %3.2 and %10.5. Certainly the gas price would go up and perhaps there wasn't enough gas to transport at the prices in the period previous to the period in question. I.E. Just the witholding of capacity would not seem to account for the large increase in prices .
Pipeline |
Current Capacity |
Capacity Additions |
2002 Total Capacity |
|
PG&E El Paso Transwestern Kern River Southern Trails |
1,920 3,290 1,090 700 -- |
200 500 -- 125 90 |
2,120 3,790 1,090 825 90 |
|
Total |
7,000 |
915 |
7,915 |
http://www.energy.ca.gov/naturalgas/natural_gas_pipelines.html
El Paso didn't create the situation, they just profited from it by making it worse.
Regardless, this current decision has nothing to do with pricing. It concerns the obligation of a pipeline to carry its rated capacity.
The fact that El Paso owns natural gas production as well as transmission simply gave them the motive.
So El Paso represents 47% of the 7000 MMcf/d capacity coming into California, and 210 MMcf/d of 7000 MMcf/d is 3% !
I don't see how that could cause the increase that California claims!
It's about time. El Paso is obliged to properly maintain its pipelines for safety and to provide the contracted capacity.
The U.S. Department of Transportation’s Research and Special Programs Administration (RSPA) today announced it is seeking the largest civil penalty ever proposed against a gas transmission pipeline operator in the history of the federal pipeline safety program.The $2.52 million civil penalty, proposed today by RSPA’s Office of Pipeline Safety (OPS), is against El Paso Energy Pipeline Group for safety violations related to the August 2000 pipeline failure in Carlsbad, N.M.
snip
RSPA cited El Paso for the following safety violations:
• Failing to ensure that qualified personnel perform required internal corrosion control procedures.• Transporting corrosive gas on numerous occasions without taking proper preventive and mitigative steps. This included failing to communicate to appropriate personnel when excessive water content was in the gas stream and when liquids and solids were found, and failing to perform necessary tests for corrosion.
• Failing to follow procedures for continuing surveillance of its facilities which would have led to action to control collection of liquid at low points, thereby mitigating conditions which led to the accident.
• Failing to take action to minimize the possibility of a failure recurrence following a similar incident in 1996.
• Not having an accurate elevation map for lines involved in the accident, which would have shown low points where liquid could accumulate and corrosion could occur.
California officials said the firm's price manipulation cost consumers $3.7 billion.I wonder how they arrived at that number.
"The body that passes government", (california) exponentially raised prices for us all in 2000.
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