El Paso cranks up public relations machine

You're my hero for posting all this stuff. This is the BEST information I have seen in two years of following the calpowercrisis threads.

The table you posted was the very same that I used to come up with the percentage of Kali's gas provided by EP. It shows El Paso's "current capacity" as 3290 MMcf/d, which exactly matches the information in post #35:

El Paso was bound by FERC regulations and its 1996 global settlement with its customers to deliver 3.29 Bcf/d of natural gas to the California border, but it "provided only 79% of the certificated capacity [or 2.594 Bcf/d] to its customers during the relevant period,"

I posted this table in the last thread What last thread? Did I miss something?

Glad to help provide some light. There are so many threads where people just argue without ever digging up the facts. With the Internet and Google, it doesn't take much time to find a lot of information. (Though some relevent facts in this matter are elusive).

What last thread? Did I miss something?

No, you were there.
http://www.freerepublic.com/focus/news/756374/posts

NGI's Daily Gas Price Index
published : August 27, 2001

CPUC: El Paso Merchant Profited by Withholding Capacity

El Paso Merchant Energy Co. (EPME), by its own admission, earned a pre-tax net profit of $184 million during 2000 and the first quarter of this year as a result of its control of 1.22 Bcf/d of capacity on affiliate El Paso Natural Gas, said the California Public Utilities Commission (CPUC) Friday.

The figure, however, does not take into consideration the $86.2 million that EPME earned from its equity ownership in California qualifying facilities, whose electric prices were tied to the inflated gas prices at the California border; EPME's profit from the higher prices for wholesale electricity (much of which was generated by gas) in the state; and EPME's profits for the capacity it held on Transwestern Pipeline (65 MMcf/d) and El Paso pipeline (156 MMcf/d) prior to acquiring the 1.22 Bcf/d, the CPUC said in an initial brief to FERC Chief Administrative Law Judge Curtis L. Wagner.

Wagner is presiding over the proceeding exploring charges that EPME had market power, and exercised it, to drive up delivered prices for natural gas to southern California beginning in mid-2000, as well as allegations that El Paso pipeline skewed the bidding process for capacity on its system to favor affiliate EPME over non- affiliate bidders [RP00-241].

The FERC judge called on EPME, El Paso pipeline, other parties and the CPUC, which initiated the complaint against the El Paso companies, to submit initial briefs in the case prior to his issuing an initial decision. Wagner is expected to rule on the affiliate and market-power abuse issues in early October (see Daily GPI, Aug. 23).

A key charge made by the CPUC was that EPME allegedly hoarded the capacity it held on El Paso pipeline to drive up prices to the southern California border, and its profits. For 180 days between June 1, 2000 and Nov. 30. 2000, the basis differential between the Southwest producing basins and California exceeded El Paso pipeline's variable cost by an average of $1.18/MMBtu, which the CPUC says should have made it profitable for EMPE to use its capacity. However, EPME utilized only 53% of its capacity on El Paso into the Southern California Gas (SoCalGas) delivery point during that time.

"In sharp contrast to El Paso Merchant, other large shippers utilized their firm capacity rights on El Paso to a much larger extent," the California regulators noted. SoCalGas used 85% of the capacity that it didn't release, Williams used 77%, and Burlington Resources used 85%, they said.

During the term of its contracts, which expired last May, EPME also made significantly fewer capacity-release awards compared to other firm shippers on El Paso pipeline, the CPUC noted. It "awarded released capacity in only 11% of the offers posted" for a total of 8 awards, while other releasing shippers averaged 97% success in awarding offers of released capacity," or 529 awards, it said.

"It is beyond dispute that El Paso Merchant's numerous, but unsuccessful, capacity- release offers were merely a cover-up for [its] actual intent to withhold firm capacity from the California market." NGI tried to obtain the initial briefs of EPME and El Paso pipeline from the companies Friday, but was unsuccessful. El Paso Corp. contends the briefs establish "conclusively" and "demonstrate unambiguously that El Paso violated no laws or regulations."

This hoarding of capacity led directly to "supracompetitive" gas prices for California, according to the CPUC. It estimated that the alleged illegal conduct on the part of EPME caused California consumers to pay an additional $400 million to $500 million for gas last year.

The CPUC blamed the alleged withholding for SoCalGas's lower storage levels last winter and the subsequent rise in the utilization of interstate capacity to the California border, which it contends led to the "substantial run-up in the cost of gas delivered to the southern California border." Last November, the "border price rose 81% in three trading days and the differential skyrocketed and increased by 162%." EPME, the agency continued, then "cashed in on the higher prices it had caused" by increasing the utilization of its El Paso capacity by about 77%.

"The evidence in the record clearly shows that El Paso Merchant exercised market power, widened the basis differentials, and significantly benefited from the higher natural gas prices it caused in California," the CPUC said. But EPME didn't act alone, the agency noted, adding that El Paso Corp. Chairman William Wise and John Somerhalder II, president of the El Paso Pipeline Group, were kept well informed of its marketing plans.

"In short, these affiliated companies were acting in concert to increase natural gas prices in California and to increase profits for their common shareholders."

This case "demonstrates exactly why an interstate pipeline's marketing affiliate should not hold firm capacity, let alone a substantial amount of firm capacity, on its affiliated, interstate pipeline," said the CPUC, adding that in the end the consumers of gas and power in California "were the victims of this market abuse."

NGI's Daily Gas Price Index
published : June 19, 2001

El Paso, Adversaries Spar over Level of 'Unavailable' Capacity

As the five-week-old hearing into whether El Paso Natural Gas manipulated gas prices in California last year winds down at FERC, a war of words has erupted over just how much transportation on the pipeline was unavailable to customers during 2000 for reasons other than operational factors.

The point is crucial to the case of California regulators, Pacific Gas and Electric and Southern California Edison, which claim that El Paso and its merchant power generators intentionally withheld capacity --- made it "unavailable" to customers for "unexplained" reasons --- to drive up gas prices in the state last year.

A witness for SoCal Edison last week estimated that, prior to the rupture on the pipeline last August in New Mexico, there was as much as 500 MMcf/d of "unavailable" capacity on El Paso that couldn't be explained away by operational factors. After the rupture, he said the figure dropped to about 200-400 MMcf/d. The estimates, the witness testified, excluded the capacity that was "unavailable" to the California market last year as a result of the August pipeline explosion, maintenance work and the increased demand of El Paso's east-of-California (EOC) shippers.

In his second appearance before the hearing, John Somerhalder, president of the El Paso Pipeline Group, yesterday countered that SoCal Edison's 500 MMcf/d estimate for unexplained, unavailable capacity failed to take into consideration three other factors. These included: a 185 MMcf/d reduction in El Paso's peak-day capacity due to production-area deliveries; an additional 196 MMcf/d capacity reduction due to higher, summer ambient air temperatures on the pipeline; and a further cut of roughly 200 MMcf/d due to El Paso's inability to run at maximum allowed operating pressure (MAOP) conditions, he said.

"When you consider the additional factors that I talked about," including the fact that "pressures were higher at certain times and lower at other times" and North Mainline shippers "were asking us to not move much gas to Topock, but [to] take it down to the South System...there is not [the] unexplained, unavailable capacity" on El Paso that SoCal Edison claims there was, Somerhalder testified.

That doesn't mean there wasn't any unavailable capacity on El Paso, he said. Somerhalder agreed that about 542 MMcf/d was "unavailable" to El Paso customers between July 1, 2000-March 31, 2001 due to the pipeline rupture in Carlsbad, NM, maintenance work and the growth in the demand of the pipe's EOC market.

The figure also reflected the "fairly significant" drop in capacity (about 450 MMcf/d) at El Paso's then "unhealthy" Cornudas Compressor Station in late July 2000, said Somerhalder, but he added this lasted for only a two-week period. "Very quickly we got that capacity back up," he noted. When the Carlsbad rupture occurred soon afterward, "it [Cornudas] was no longer the controlling factor" in the market.

This phase of the hearing has focused on on whether El Paso affiliates El Paso Merchant Energy Gas L.P. and El Paso Merchant Energy Co., which had held 1.22 Bcf/d of capacity on the pipeline up to last month, had market power and exercised it to manipulate gas prices in California last year. The hearing is scheduled to wrap up today (June 19), with rebuttals by lawyers for the California Public Utilities Commission (CPUC) and SoCal Edison.

Chief Administrative Law Judge Curtis L. Wagner Jr. announced yesterday that the second phase of the hearing will be much briefer, beginning July 12 and lasting until July 16 or 17. It will explore whether El Paso pipeline showed preference to its to merchant power affiliates in awarding them the 1.22 Bcf/d of capacity. The CPUC and SoCal Edison claim the pipeline skewed the bidding process in early 2000 to favor its affiliates over non-affiliate bidders.

Curtis said he plans to issue his initial decision in the case by Sept. 21.

Well, my mind is getting more and more boggled.

You and me both.

This last article (#44) has some useful info relevant to the discussion. Let me excerpt from two paragraphs.

A witness for SoCal Edison last week estimated that, prior to the rupture on the pipeline last August in New Mexico, there was as much as 500 MMcf/d of "unavailable" capacity on El Paso that couldn't be explained away by operational factors. After the rupture, he said the figure dropped to about 200-400 MMcf/d. The estimates, the witness testified, excluded the capacity that was "unavailable" to the California market last year as a result of the August pipeline explosion, maintenance work and the increased demand of El Paso's east-of-California (EOC) shippers.
In his second appearance before the hearing, John Somerhalder, president of the El Paso Pipeline Group, yesterday countered that SoCal Edison's 500 MMcf/d estimate for unexplained, unavailable capacity failed to take into consideration three other factors. These included: a 185 MMcf/d reduction in El Paso's peak-day capacity due to production-area deliveries; an additional 196 MMcf/d capacity reduction due to higher, summer ambient air temperatures on the pipeline; and a further cut of roughly 200 MMcf/d due to El Paso's inability to run at maximum allowed operating pressure (MAOP) conditions, he said.

These two quotes tell me that the the mandated MAOP reduction was brought up at the evidentiary hearing and that, one way or another, it was factored in to the calculations that Chief Judge Wagner made.

The biggest question I have right now is whether the El Paso piplelines had 1.1 Bcf/d capacity or 3.3 Bcf/d. In other articles they mention that El Paso Merchant, which is a natural gas provider, had contracted with 1.22 Bcf/d of capacity from El Paso Pipeline Group. Yet there were other suppliers also using El Paso pipelines. Either the combined capacity of the three lines we've been discussing was 3.2 Bcf/d, or there are other pipelines that El Paso controls.

This is becoming somewhat more clear this morning. El Paso has two major line systems, the North Mainline which seems to pass thru flagstaff AZ and terminate at Topoc, CA, and the South Mainline which passes thru the Texas Panhandle, then Southern NM and AZ, and terminates at Erhenberg, CA. [map here]

Also, from this map, it looks to me like the Topoc Hub supplies Northern and Central California, and the one in Blythe suppies Southern California.

The answers to some of these questions may be here: Natural Gas Intelligencer, July 31, 2000:

Basis Blowout at SoCal Border Shocks Market

A basis blowout of immense proportions has occurred between Rocky Mountain region supply basins and the Southern California border this month and it appears to be expanding as we enter August, leading to widespread speculation and controversy in the industry about its causes.

The heat in the Southwest and the soaring power market in California over the past few weeks undoubtedly have a lot to do with the extreme natural gas prices at the border. Gas demand for electric generation in California has grown in "double digits" this year, said El Paso Natural Gas President Patricia Shelton, "and I know there is less hydro [available to the market]. And I know in the east-of-California market there's a lot of electric generation demand also. But beyond that, I [can't speculate]."

"What we're seeing is that demand has increased by about 300 MMcf/d over last year," said Shelton. However, SoCal Border prices between $4.60 and $4.70/MMBtu for today's flow are about $2.30 more than prices at the same time last year and are by far (40-50 cents) the highest spot gas prices in the nation, even higher than PG&E citygate prices in Northern California. Furthermore, the basis spread between the border and Rocky Mountain and southwestern supply points has ballooned to more than $1/MMBtu from 33 cents during July 1999. Basis, which is about 46 cents more than current maximum transportation rates on El Paso Natural Gas, is much wider than market fundamentals warrant, according to many observers.

After blowing out to an average of 36 cents in 1998, the bidweek price spread between the San Juan Basin (El Paso Blanco) and the Southern California border narrowed to an average of 26 cents last year and has averaged 28 cents since the beginning of this year through June bidweek. In June, the spread widened to 48 cents. During July bidweek it averaged 74 cents, and since July 1 the daily basis spread has average 94 cents. It went from an average of 82.3 cents/MMBtu from July 1 through July 12 to average of 1.03/MMBtu since July 13. Meanwhile, El Paso Natural Gas' maximum firm transportation rates are about 54 cents including the current cost of the 3.88% in-kind fuel charge.

"Someone is trying to artificially set the border high in an attempt to widen the border-basin basis," said one marketer, echoing the comments of many others. "There are fundamental factors in the state of California that are already pushing in a certain direction and that has permitted them to do that," he said. "Without the fundamentals already pointing in this direction, would they still be able to push things around? Probably not."

Another unusual phenomenon that has occurred is the divergence of the Topock, AZ, border prices from the rest of the border points. There are four main Southern California border delivery points: Ehrenburg, which is El Paso Natural Gas' south mainline into SoCalGas only; Needles, which is Transwestern Pipeline into both SoCalGas and PG&E; Kern River Station, which is PG&E into SoCalGas; and Topock, which is El Paso's north mainline into both SoCal and PG&E.

Spot gas at Topock has been trading at a premium this month and for August delivery compared to the other border points and general border-non-specific gas, and this is causing problems in the market, said one gas trader. "If we either trade gas at a border non-specific point or pull gas out of in-state storage and try to hedge that with a published SoCal Border number, our hedge gets busted because there is a 10 cent differential in the price.

"That's where this whole thing unravels," he said. "Why are Ehrenburg, Needles, storage gas and the other points discounted off of Topock this month during a strong demand period? If the fundamental reason was because the load out west was so strong, then the other points would be trading at a premium because gas flows better through those points." Topock is limited to about 540 MMcf/d, whereas Ehrenburg can handle up to 1.2 Bcf/d, he noted.

El Paso Natural Gas has come under a lot of fire because of its capacity allocation methods, particularly at Topock. (See NGI, July 10) The pipeline allows anyone who owns capacity on its system to use Topock as a primary delivery point, which overloads the location and causes a significant portion of nominations to be curtailed on a regular basis. However, that leads one to believe Topock would be a less attractive delivery point compared to the others because of the likelihood that much of what is nominated to Topock will be cut.

Some have questioned, however, whether some traders may have developed a gaming strategy based on not having to deliver contracted volumes. An end user might favor a Topock over a non-Topock delivery because if and when his capacity is cut, he may be able to turn around and buy second cycle gas at 10 to 20 cents less than he originally paid. "We were forced to unload some gas into Erhenburg at $4.50 that was originally sold (but later cut) at $4.70 at Topock," a marketer said, adding it is not unusual for 30% to 40% of nominations at Topock to be cut.

Several other traders hypothesized that Topock might be trading at a premium because it gets exclusive treatment on EnronOnline, which boasts up to 2,000 mainly gas and power transactions each day and has done $90 billion in business since Jan. 1. "You always have a Topock buyer in EnronOnline," one source noted.

"EnronOnline has come out and publicized the price where they will buy and where they will sell, and no one has really done it like that before," he added. "Basically they are saying the market is this..... and they have backed that up with the willingness to transact."

"Everyone who does business in the West is looking at EOL," another marketer said.

"The reason Topock is so high is that the quantity of basis and financial transactions is heavily weighted toward Topock," said yet another observer.

Others speculate that the 1.5 Bcf/d of firm transportation capacity on El Paso Natural Gas held by El Paso Merchant Energy has something to do with the basis spread. When Dynegy held that space several years ago, it frequently was accused of holding capacity off the market in an attempt to drive up the spread. However, one source claims El Paso Merchant currently is having difficulty finding a buyer for its capacity.

Harvey Morris, an attorney with the California Public Utility Commission, said he is very interested in this topic. He believes putting so much firm transportation capacity into the hands of one market player enables not only that player, but also many others to manipulate prices to a great degree.

"We have a complaint against El Paso and El Paso Merchant Energy about the same anticompetitive conduct we were worried that Dynegy had done," said Morris. "Obviously it is getting worse." (See NGI, April 10)

The large gas marketers have grown even larger and are much more able to wield market power, "and that is particularly possible when one market player, El Paso Merchant, has entered into a giant arrangement and the others can now take advantage of it. The issue isn't can you get gas to market; the issue is when one big player withholds capacity or jacks up the price for that capacity, the fight for the remaining capacity goes up likewise. When one major player is doing a lot of artificiality in the marketplace then you cause a snowballing effect among the prices from everyone else. El Paso Merchant is the artificial player right now."

The current price situation "doesn't make sense," Morris noted, "because it's not like we're using up all the molecules on all the interstate pipelines to California, and we're still in a physical excess pipeline capacity situation."

The CPUC's complaint against the El Paso Natural-El Paso Merchant Energy contract is pending at FERC. Morris said the Commission recently granted discovery, which will take place over the next few weeks. The CPUC intends to make a decision on where it plans to take this case by the end of August. Its appeal of the El Paso-Dynegy decision also is pending in the U.S. Court of Appeals.

(Note to Price Survey Participants: NGI is investigating the possibility of changing its coverage of the Southern California border in its price tables by adding two additional pricing points: Southern California Border/Topock and Southern California Border/Non-Topock. NGI would continue to publish a Southern California Border Average. NGI is asking for cooperation in specifying the border delivery point when reporting transactions. It would like to make these additions as soon as possible. NGI also welcomes input on this subject. Please call Dexter Steis at 703-318-8848).

Rocco Canonica

Excellent work. Though there is still a shortfall.

Topock is limited to about 540 MMcf/d, whereas Ehrenburg can handle up to 1.2 Bcf/d, he noted.

We're only halfway to the 3.2 Bcf/d that El Paso supposedly handles.

This may be the explanation for the mismatch in capacities. From TESTIMONY OF GAY FRIEDMANN, SENIOR VICE PRESIDENT, LEGISLATIVE AFFAIRS, INTERSTATE NATURAL GAS ASSOCIATION OF AMERICA (INGAA) BEFORE THE HOUSE GOVERNMENT REFORM SUBCOMMITTEE ON ENERGY POLICY, NATURAL RESOURCES AND REGULATORY AFFAIRS OCTOBER 16, 2001

Most interstate pipelines delivering natural gas to California end at the state line. Currently, these interstate pipelines have the capacity to deliver more natural gas to the border of California than can be taken away by intrastate pipelines in the State. While interstate natural gas pipeline facilities are regulated by the Federal Energy Regulatory Commission, these intrastate pipelines are not regulated by FERC but rather by the California Public Utility Commission (CPUC). They are not required to be "open access" like FERC-jurisdictional pipelines and the CPUC has the exclusive authority for approving new intrastate capacity expansions.
This mismatch between capacity at the Southern California border and the capacity within the SoCal Gas system is the fundamental problem in California. Unfortunately, the State of California has a long history of discouraging the construction of interstate natural gas pipelines in the State. The only interstate pipelines currently operating in California are Mohave and Kern River. These facilities were built in the late 1980s and early ‘90s mainly to serve oil fields in Southern California. These pipelines were vigorously opposed at that time by the CPUC and the California utilities. (See the attached chart.)
As the California Energy Commission has reported, the higher demand, coupled with an inadequate natural gas infrastructure on the SoCal Gas systems, limited the ability of California to receive natural gas. This was a factor that contributed to high prices for natural gas experienced in California in late 2000 and early 2001. This insufficient receipt capacity in California limited the flow of natural gas on interstate pipelines serving California. The resulting high prices reflected at the California border were mainly the result of a premium being paid by non-firm capacity customers to obtain transportation on the intrastate systems. When demand (for capacity) exceeds supply, price is the means to rationalize the market.

So the "unused capacity" on the El Paso lines may have been due to the fact that California couldn't accept any more.

This mismatch between capacity at the Southern California border and the capacity within the SoCal Gas system is the fundamental problem in California. Unfortunately, the State of California has a long history of discouraging the construction of interstate natural gas pipelines in the State. The only interstate pipelines currently operating in California are Mohave and Kern River. These facilities were built in the late 1980s and early ‘90s mainly to serve oil fields in Southern California. These pipelines were vigorously opposed at that time by the CPUC and the California utilities. (See the attached chart.)

Now that is revealing!

Lots of updates on this thread!

ping!

Enron gets some mention in this lengthy technical thread!

Did a fast look using "find" ( I'm cooking... ) and see what you mean... they just keep popping up in odd places.

Thanks for the re-ping. There is more info in this thread regarding California Natural Gas than ever before. It's worth a read.

The "attached chart" is well worth looking at.

Once again, it seems California has created the problem that it is blaming others for: Lack of natural gas.

So the "unused capacity" on the El Paso lines may have been due to the fact that California couldn't accept any more.

Absent any numbers, I don't believe this. The capacity that went unfilled was to the border, not beyond. If it was due to infrastructural issues like insufficient intrastate pipelines, it would not have been a temporary problem.

Once again, it seems California has created the problem that it is blaming others for: Lack of natural gas.

A) the principle objections listed in your link of #49 were from competing pipeline owners and utilities. There is lots of evidence that new pipelines were not built prior to 2000 because of low gas prices. There is also lots of evidence that California two principle utilities acted anticompetitively to protect their businesses, even at the ultimate expense of their own long term interests. But that is not the topic of this discussion.

B) the issue we're discussing is El Paso's management of the existing capacity of their pipelines during the California Natural Gas crisis of 2002-2001. If you want to blame states for using more energy than they mine, there is lots of blame to go around. The case against El Paso is that one arm of the company, a pipeline owner, helped other arms of the company that are in the natural gas marketing business by restricting the supply of gas from other suppliers into the state at a time of shortages. This would violate several laws.

The FERC will be making its decision based on Chief Judge Wagner's recommendation withing the next weeks. I'm hoping that whatever th result of that decision they will publish enough hard data so that we laymen can make up our own minds.

Though I think it is a red herring, here is another article about the supposed intrastate bottleneck.

NGI's Daily Gas Price Index
published : June 18, 2001

EIA, CEC at Odds Over Intrastate Capacity Shortfall in CA

The Energy Information Agency (EIA) and the California Energy Commission (CEC) both agree there is a bottleneck where the interstate and intrastate grids meet in California. However, the two agencies are miles apart on the size of that bottleneck.

The limited take-away capacity of California intrastate pipes limits the amount of gas that can be delivered by interstate pipelines, according to a new EIA report: Electricity Shortage in California: Issues for Petroleum and Natural Gas Supply. EIA calculates the total constraint to be 590 MMcf/d. The CEC, however, estimates that only 200 MMcf/d is left at the border.

The EIA's findings come amid continuing investigations by FERC into the California energy crisis and the recent record spikes in natural gas prices. Over the next three and-a-half years, 11 new pipelines projects or expansions are expected to enter service to transport gas into and throughout the state, the EIA said. That begs the question: will the projects all succeed and will they solve the problem?

On the PG&E system, interstate pipeline capacity levels exceed current customer needs even on peak days, according to the EIA. "PG&E's daily requirements during the summer are usually below the certificated capacity at the northern California border (at Malin, OR, from PG&E Transmission - NW) by 20-to-30 MMcf/d, while during the winter season that rises to 90+ MMcf/d." Still, PG&E plans to upgrade and expand its system in the near future to accommodate a planned increase in capacity on the PG&E Transmission - NW system of more than 300 MMcf/d in 2002. Citing that demand will grow sufficiently by then to justify the expansion, PG&E said it has no plans, however, to increase its capacity on its southern route, which transports gas into California from Arizona.

The EIA reported that the SoCal system, on the other hand, is often operating at or above full capacity. The high spot gas prices currently posted at southern California citygates seem to indicate to the EIA a lack of adequate pipeline capacity from the Southwest into the state. "Although it has been speculated that SoCal may be hesitant to expand its system because, once the hydropower resources return to normal (most likely in 1 to 2 years), less natural gas will be needed for electric power generation, SoCal has in fact announced several projects to expand delivery capacity within the State," the EIA report said.

SoCal has recently filed for two expansion projects, both to be completed in late 2001. The first project would increase take-away capacity at three critical points on its system. Although capacity would only reportedly increase by only about 50-60 MMcf/d at each point, one would increase access to growing California gas production while the other two would upgrade currently constrained interconnections with the interstate network, the EIA said. The second project involves the building of a new 200 MMcf/d, 32-mile lateral that would link the southern part of the SoCal system with an interconnect with the Kern River-Mojave Pipeline located on the northern part of the SoCal system. Kern River announced it was soliciting shippers for the project earlier last week (see related story this issue).

EIA estimates that at least six projects have been proposed to bring additional pipeline capacity into California, but only two will be able to have immediate impact on the gas situation in the state. The Kern River Transmission Co. 2001 California Emergency Action Expansion (135 MMcf/d) and the El Paso Line 2000 Project (230 MMcf/d) are slated for completion this summer. Most of the other proposals will not have an impact on the California capacity market until 2002 or later.

Meanwhile, the EIA said the interstate natural gas pipelines serving California have adequate capacity to meet current demand within the state, although all but Kern River and Mojave have been operating at full capacity much of the time during the past several months. "The interstates have the capability to deliver more than 7.3 Bcf/ d to the state if needed," the report said. "According to the CEC, the major in-state natural gas service providers, PG&E and SoCal Gas, are fully utilizing their receipt capacity at the state border."

I dunno. But the 3.29Bcf/d is listed as "capacity" in the table you posted. It still seems that the El Paso mainlines have more "capacity" than California can handle. That makes sense, since there are other states along the mainlines using the gas as well as Kali.

And we haven't even discussed the issue of NG storage in California. The State of California was buying up natural gas at one point, but nothing has ever been heard about that program again. Personally, I don't know whether the state ever did or did not buy any gas.

And another thread in this tapestry is the Defense Production Act, where suppliers were ordered by the clinton adminsistration (renewed by the new Bush Administration) to send gas to Kali even though they might not get paid. National Defense, you know...

I still haven't heard El Paso's comments on that program.

I think I found it. The capacity of El Paso lines going to Topock is 2.08 Bcf/d, not .54 Bcf/d.

http://www.eia.doe.gov/emeu/steo/pub/special/california/june01article/canatgas.html>

Table 6-1. Key Natural Gas Pipeline Capacity Levels into the State of California, by Location and Pipeline

Region/ Delivering Pipeline			Interstate Delivery Capacity ¹ (MMcf/d)	Receiving Pipeline	Intrastate Receipt Capacity ² (MMcf/d)	Shortfall in Receipt Capacity (MMcf/d)

Southern California
	*Topock, AZ.*
		El Paso Natural Gas Co	540	SoCal Gas Co	540
		El Paso Natural Gas Co	1,140	PG&E Gas Co	1,140 ³
		El Paso Natural Gas Co	400 ⁴	Mojave Pipeline Co	400
		Transwestern Pipeline	225	PG&E Gas Co	0 ³
		Transwestern Pipeline	190	SoCal Gas Co	50 ⁵
		*Subtotal Topock, AZ.*	2,495		2,130	365
	*Ehrenberg, AZ.*
		El Paso Natural Gas Co	1,210	SoCal Gas Co	1,210	0
	*Needles, CA.*
		Transwestern Pipeline	750 ⁶	SoCal Gas Co	750	0
	*CA/NV line*
		Kern River Trans Co	750 ⁷	Kern River Transmission Co	700	50
		*Subtotal Southern California*	5,205		4,790	415

Northern California
	*Malin, OR.*
		PG&E Gas Transmission - NW	1,970 ⁸	Pacific Gas & Electric Co	1,905
		PG&E Gas Transmission - NW	110 ⁹	Tuscarora Pipeline	0
		Subtotals Northern California	2,080		1,905	175

		Total California	7,285 ¹⁰		6,695	590

¹ Capacity levels shown in this column are based upon data independently compiled by EIA from company sources. In many cases the design capacity (as listed on the company's web site, for instance) for a particular delivery point is greater than that listed here due to operational variations on the pipeline system and/or contractual volume levels. For example, Kern River Transmission's CA/NV State line capacity is listed as 780 MMcf/d on its web site vs 750 MMcf/d level reported as the average by other sources. ² Capacity levels shown in this column are based upon information made available in the California Energy Commission's May 2001 study of "Natural Gas Infrastructure Issues (Draft)". ³ PG&E has an interconnect with two interstate pipeline companies at Topock, Arizona (El Paso Natural Gas Co. and Transwestern Pipeline Co.). PG&E's 300 Line (from Topock, Arizona to Kern River Station near Kramer Junction, California) can carry only 1,140 MMcf/d out of Topock, AZ, but could receive as much as 1,365 from El Paso and Transwestern (1,140 + 225 MMcf/d) if the Line 300 were expanded. ⁴ The Mojave system is supplied by the El Paso System (which can deliver up to 400 MMcf/d) and Transwestern (150 MMcf/d) at Topock, Arizona, although only a maximum of 400 MMcf/d can be delivered at one time and carried into California. ⁵ Includes the receipt capacity reported for the Hector Road/Mojave Pipeline interconnect within California. ⁶ In the California Energy Commission's report the capacity for the "Transwestern at Needles" is reported as 1,090 MMcf/d but does not list any corresponding receipt capacities for Transwestern at Topock, for either SoCal, PG&E, or Mojave. ⁷ Non-winter average capacity level. Summertime capacity is 700 MMcf/d while during the winter months Kern River Transmission capacity can be as high as 800 MMcf/d. ⁸ Summertime capacity level. Amount that can be delivered to Malin, Oregon during the winter months drops due to increased demand for natural gas in the States north of California. ⁹ About 90 MMcf/d of the 110 MMcf/d capacity entering California on the Tuscarora Pipeline feeds into Nevada. However, the California Energy Commission's report does not include Tuscarora in its list of Interstate suppliers to the State. ¹⁰ The California Energy Commission's report presents 7,040 MMcf/d as the total interstate natural gas pipeline delivery capacity compared with the EIA's 7,125 MMcf/d (7,285 MMcf/d adjusted for Tuscarora's 110 MMcf/d and Kern River's 750 vs 700 summertime capacity), a difference of 85 MMcf/d.

Note: MMcf/d = million cubic feet per day.
Note: Actual capacity levels on any given day will vary due to operational conditions and to such variables as ambient temperature and elevation.

Sources:
Interstate pipeline capacity: Energy Information Administration, EIAGIS-NG Geographic Information System, State Border Capacity Database;
Intrastate pipeline capacity: California Energy Commission, "Natural Gas Infrastructure Issues," Draft, May 2001.

From the same page as the table above:

Interstate pipeline capacity into California is estimated by EIA to be 7.3 billion cubic feet per day (Figure 6-2, Table 6-1).[6] This compares to the California Energy Commission (CEC) estimate of 7.0 billion cubic feet per day.[7] There appears to be an imbalance between the ability of the interstate gas pipeline system to deliver gas to California and the in-State pipeline capacity to receive gas at the border. The CEC has estimated the imbalance at 300 million cubic feet per day (MMcf/d), or about 4 percent of interstate delivery capacity. EIA estimates that the shortfall in receipt, or take-away, capacity is 590 MMcf/d, or 8 percent of EIA's estimated interstate delivery capacity (Table 6-1). The EIA estimate was derived by comparing interstate capacities at specific border crossings with the CEC estimates of intrastate receipt capacity.
[snip]
The El Paso line that was disrupted by an explosion last August, although not fully operational, does not result in less gas moving into the State. According to a company spokesperson, shippers are purchasing their gas at other places on the El Paso system and the same amount of gas is going into California as before the disruption, only by different routes[12].
[snip]
What about natural gas pipeline capacity levels within the State itself?
In California, there is an imbalance between the ability of the interstate gas pipeline system to deliver gas to the California border and the in-State pipeline capacity to receive gas at the border. This imbalance means the ability of take-away capacity at the State border constrains the amount of gas that can be delivered into California by interstate pipeline companies. The California Energy Commission estimates that at least 200 MMcf/d less gas can be picked up at the State border than can be delivered to the State. EIA estimates the total imbalance at about 590 MMcf/d (Table 6-1).
On the PG&E system, which serves northern California above Kern County, capacity levels are in excess of current customer needs even on peak days. According to a company spokesperson, PG&E's daily requirements during the summer are usually below the certificated capacity at the northern California border (at Malin, OR, from PG&E Transmission - NW) by 20-to-30 million cubic feet per day (MMcf/d), while during the winter season that rises to 90+ MMcf/d. Nevertheless, PG&E plans on upgrading and expanding its system in the near future to accommodate a planned increase in capacity on the PG&E Transmission - NW system of more than 300 MMcf/d in 2002 (Table 6-2). The company believes demand will grow sufficiently by then to justify the expansion. It has no plans, however, to increase its capacity on its southern route, which transports gas into California from Arizona, since the current capacity on that section is adequate to meet current customer needs.
The SoCal system, on the other hand, is often operating at or above full capacity. The high spot gas prices currently posted at southern California citygates seem to indicate a lack of adequate pipeline capacity from the Southwest into the State. Although it has been speculated that SoCal may be hesitant to expand its system because, once the hydropower resources return to normal (most likely in 1 to 2 years), less natural gas will be needed for electric power generation, SoCal has in fact announced several projects to expand delivery capacity within the State. SoCal recently filed for two expansion projects, both to be completed in late 2001 (Table 6-2). The first project would increase take-away capacity at three critical points on its system. Although capacity would increase by only about 50-60 MMcf per day at each point, one would increase access to growing California gas production while the other two would upgrade currently constrained interconnections with the interstate network. The second project involves the building of a new 200 MMcf/d, 32-mile lateral that would link the southern part of the SoCal system with an interconnect with the Kern River-Mojave Pipeline located on the northern part of the SoCal system.