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NARUC Staff Subcommittee on Accounting and Finance

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National, nonprofit trade association serving the interests of 195 investor ... natural gas bills prepared by Senator Lamar Alexander (Tennessee) S.726 and S.727 ... – PowerPoint PPT presentation

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Title: NARUC Staff Subcommittee on Accounting and Finance


1
National Energy Policy Legislation
  • NARUC Staff Subcommittee on Accounting and
    Finance
  • Salt Lake City, Utah
  • September 19, 2005
  • Jeffrey M. Petrash
  • American Gas Association
  • Washington, D.C.

2
American Gas Association
  • National, nonprofit trade association serving the
    interests of 195 investor-owned and municipal
    natural gas utilities
  • Actively advocates for natural gas utilities in
    Congress, before the Executive Branch of the
    Federal Government, and before the Federal Energy
    Regulatory Commission
  • Does not represent the interests of natural gas
    producers or interstate natural gas pipelines

3
American Gas Association Issues
  • Supply, demand, and prices
  • Infrastructure to meet demand
  • Assistance to low-income consumers
  • Energy efficiency
  • New technologies

4
Natural Gas Supply And Demand
  • Natural gas demand is growing and will continue
    to grow
  • Natural gas supply is having difficulty keeping
    pace

5
(No Transcript)
6
Source Environmental and Energy Analysis
7
Natural Gas Supply Limited By Politics, Not By
Geology
8
Major Portions of the Gas Resource Base Are Not
Accessible
21 TCF
346 TCF
40
100
31 TCF
100
RestrictedPercentage
43 TCF
56
Approximately 29 trillion cubic feet (TCF) of the
Rockies gas resources are closed to development
and 108 TCF are available with restrictions.
9
National Energy Policy Bill
  • Process began in early 2001
  • Senate Republican and Democratic bills in 2001
  • Vice President Cheneys National Energy Policy
    Development Group issues report in May, 2001
  • Change in control of the Senate in Spring, 2001
  • House passes H.R. 4 in August 2001
  • September 11, 2001
  • The Daschle gambit
  • Senate passes H.R. 4 in April 2002 after more
    than 40 days of floor debate

10
Comprehensive National Energy Policy Bill2002
Conference (N.B. An Election Year)
  • Conference process is to reconcile House and
    Senate bills
  • Conference stretched over June-November, 2002
  • Ultimately conference deadlocked
  • ANWR
  • Electricity title
  • Ethanol
  • Renewable portfolio standard

11
Comprehensive National Energy Policy Bill2002
  • The conference process failed to produce a
    comprehensive national energy policy bill
  • But pipeline safety was split off and passed
    separately in November 2002
  • Pipeline Safety Improvement Act of 2002

12
National Energy Policy Legislation 2003
  • Continuation of 2001-2002 process
  • House bill approved April, 2003, by a vote of
    247-175
  • Senate debates in the summer for two months, with
    no result

13
National Energy Policy Legislation 2003
14
National Energy Policy Legislation 2003
  • Crazy Ivan(??????? Ivan)Republican Senate
    adopts 2002 Democratic bill
  • Northeast Blackout
  • Conference produces a November 2003 conference
    report based on House-passed bill and Senate
    Republican bill
  • Approved in the House
  • Failed in the Senate by two votes

15
National Energy Policy Legislation 2004
  • Hopes that two more votes can be found to clear
    bill in the Senate
  • In fact more Senate votes would probably defect
    if a vote were held

16
(No Transcript)
17
2004-2005 Three-Way Standoff
  • House
  • ANWR
  • MTBE liability waiver
  • Senate
  • No ANWR
  • No MTBE liability waiver
  • White House
  • ANWR
  • Bill costs too much

18
2004 Comes and Goes With No Action (Almost)
19
A Bright Spot in 2004
  • Congress passes a series of bills that include a
    number of provisions deemed essential to
    construction of an Alaska natural gas pipeline
  • Loan guaranties and favorable tax treatment
  • A number of procedural provisions

20
Comprehensive National Energy Policy
LegislationHouse2005
  • Three House Committees approve bills in April
  • Energy and Commerce (39-16)
  • Resources (voice vote)
  • Ways and Means (26-11)
  • House approves a bill April 20, 2005 (249-183)
  • Bulk of the bill is identical to H.R. 6
    conference report from 2003

21
Comprehensive National Energy Policy
LegislationSenate2005
  • Energy and Natural Resources Committee approves a
    bill 22-1 in May, 2005
  • A blend of prior energy bill and natural gas
    bills prepared by Senator Lamar Alexander
    (Tennessee)S.726 and S.727
  • Senate approves bill June 28, 2005 (85-12)

22
Comprehensive National Energy PolicyConference20
05
  • Conference to reconcile House and Senate bills
    begins early July, 2005
  • Conference Committee produces a conference report
    July 26, 2005
  • House approves July 28, 2005
  • Senate approves July 29, 2005

23
Comprehensive National Energy Policy2005
  • President signs the bill at Sandia National
    Laboratory in New Mexico (August 8, 2005)
  • Domenici-Barton Energy Policy Act of 2005, P.L.
    109-58, 119 Stat.594

24
Why Now?
  • Energy prices generally
  • Gasoline prices particularly
  • ANWR
  • MTBE
  • Not an election year

25
Natural Gas Provisions
26
Natural Gas ProductionPermitting
  • Expeditious compliance with NEPA, streamlined
    procedure for NEPA, require best management
    practices, improve enforcement activities, and
    authorizes additional funds for processing
    applications (362, 390)
  • Deadlines for processing applications under the
    Mineral Leasing Act (366)
  • Review of onshore leasing practices (361)

27
Natural Gas ProductionPermitting
  • MOUs on leasing practices and utilities on public
    lands (363, 372)
  • Steps to ensure timely action on leases and
    permits (362)
  • Rocky Mountain pilot project to improve federal
    permitting (365)

28
Natural Gas ProductionIncentives
  • Royalty relief for ultradeep wells (20,000 feet)
    in shall Gulf waters (200 meters) (344)
  • Royalty relief for deepwater wells in Gulf (345)
  • Two-year amortization for geological and
    geophysical costs (1329)

29
Natural Gas ProductionOther
  • Royalty-in-kind program (342)
  • Hydraulic fracturing fix (322)
  • Federal Water Pollution Control Act fix (323)
  • DOE study of natural gas supply and demand
    (1818)
  • Interior to identify restrictions and impediments
    to development (364)

30
Natural Gas ProductionOther
  • Orphaned, abandoned, and idled wells program
    (349)
  • Study of impact of coalbed methane development on
    land and water in Intermountain West (1811)
  • Coastal zone impact assistance (384)
  • Comprehensive inventory of oil and gas resources
    under Outer Continental Shelf (357)
  • Stay tuned!

31
Natural Gas ProductionMarching To The Rear
  • Withdraws land from leasing in Finger Lakes
    National Forest (370)
  • Bans drilling under the Great Lakes (386)

32
Natural Gas InfrastructureLNG
  • Confirms exclusive FERC jurisdiction over LNG
    siting (311)
  • Codifies Hackberry doctrine (311)
  • Confirms state jurisdiction under CZMA, CAA, and
    FWPCA (311)
  • Designates FERC as lead agency and allows it set
    deadlines for state and federal agencies
    reviewing under federal law (313)
  • States may perform safety inspections but not
    enforce safety requirements (311)
  • FERC must require emergency response plans (311)
  • At least three LNG forums to be held (317)
  • DOE study of open-rack vaporization systems
    (1828)

33
Natural Gas Infrastructure
  • Designates FERC as lead agency and allows it set
    deadlines for state and federal agencies
    reviewing under federal law (313)
  • FERC record is the consolidated record for
    federal authorizations (313)
  • Court review of failure of federal or state
    agencies to act under federal law (313)
  • CZMA fixes (381, 382)

34
Natural Gas Infrastructure
  • Accelerated depreciation for new LDC facilities
    (1325)
  • Confirms accelerated depreciation for gathering
    facilities (1326)
  • Enhances FERC authority to permit market-based
    rates for new storage facilities (312)
  • DOE study of storage capacity (1801)
  • Requires updating values for royalties on
    crossing federal lands (367)
  • Designation of energy corridors on federal lands
    (368)

35
Natural Gas Energy Efficiency
  • Study of Total Energy Efficiency (1802)
  • Tax credit for existing homes (1335)
  • Contractors tax credit for new homes (1332)
  • Manufacturers tax credit for refrigerators,
    dishwashers, clothes washers (1334)
  • Deduction for commercial buildings (1331)

36
Natural Gas New Technologies
  • Oil and gas RD (965, 966, 967)
  • RD on methane hydrates (968)
  • Royalty incentives for methane hydrates (353)
  • Tax credit for fuel cells and microturbines
    (1335, 1336)
  • Study of distributed generation (1817)

37
Natural Gas Consumers
  • Increases LIHEAP authorization to 5.1 billion
    (121)
  • FERC directed to facilitate market transparency
    and may require price reporting (316)
  • Prohibits market manipulation in purchase of sale
    of natural gas or transportation (315)
  • Increases penalties under Natural Gas Act and
    Natural Gas Policy Act (314)

38
Electricity Provisions
39
ElectricityBig Ticket Items
  • Mandatory FERC electric reliability standards
    (1211)
  • Backup FERC electric transmission siting
    authority (1221)
  • Repeals PUHCA (1261-1277)
  • Repeals the PURPA put (1253)
  • Expands FERC merger review authority to include
    generation (1289)

40
ElectricFERC Rate Issues
  • FERC may require unregulated transmission
    entities to follow open-access rules (1231)
  • Protection of native load (1233)
  • Study on benefits of economic dispatch (1234)
  • FERC rulemaking regarding incentive-based rates
    for electric transmission (1241)

41
ElectricityFERC Market Rules
  • FERC directed to facilitate market transparency
    and may require price reporting (1281)
  • Prohibits filing false information (1282)
  • Prohibits market manipulation (1283)
  • Increases penalties under the Federal Power Act
    (1284)
  • Changes FERC refund effective date (1285)
  • Refund authority for market-based rates (1286)

42
ElectricityPURPA Proceedings
  • PURPA proceedings on net metering and smart
    metering (1251, 1252)
  • PURPA proceeding on interconnection (1254)

43
Coal Provisions
  • Clean coal initiative (401-404)
  • Clean power projects (411-417)
  • Coal gasification (414)
  • Petroleum coke gasification (415)
  • Coal leasing (431-438)

44
Nuclear Provisions
  • Reauthorizes Price-Anderson Act (601-610)
  • Next generation nuclear plant project (641-645(
  • Nuclear security (651-657)
  • Numerous other provisions (621-639)

45
Hydroelectric Provisions
  • Licensee may propose alternative conditions
    (241)
  • Hydro production incentives (242)
  • Hydro efficiency improvement (243)

46
Renewable Provisions
  • Assessment of renewable energy resources (201)
  • Federal purchase requirement (203)
  • Geothermal provisions (221-237)

47
Hydrogen (Title VIII)
48
Research and Development (Title IX)
49
Ethanol (Title XV)
50
Climate Change (Title XVI)
51
Questions?
52
Thank You!
  • jpetrash_at_aga.org
  • 202.824.7231
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