Regulation

PL04-3 (Policy Statement on Gas Quality and Interchangeability)

The Federal Energy Regulatory Commission (FERC) rejected calls to establish hard and fast rules or specifications for the gas quality and interchangeability issues that have surfaced recently in relation to LNG imports and economic conditions that have affected the degree to which natural gas is processed before it reaches interstate pipelines. 

Instead, FERC announced a policy that consists of five principles:

  • only the quality and interchangeability specifications in FERC-approved gas tariff can be enforced;
  • pipeline tariff provisions need to be flexible to accommodate the evolving nature of the science, and to permit pipelines to balance safety and reliability concerns, on the one hand, with maximizing gas supply, on the other;
  • pipelines and their customers should develop specifications based on technical requirements;
  • pipelines and their customers should negotiate such technical solutions based on guidelines developed by a multi-segment industry group (so-called “NGC+” guidelines); and
  • FERC will consider gas quality disputes on a case-by-case basis. 
(See PAGE NAME for a full discussion of Gas Quality and Interchangeability.)