Response to Representative Roberta E. Latta's 6/19/15 letter regarding BTU content of natural gas and their impact on certain classes of end-users.

20150723-0014 FERC PDF (Unofficial) 07/22/2015 FEDERAL ENERGY REGULATORY COMMISSION WASHINGTON, DC 20426 imW4S OFFICE OF THE CHAIRMAN July 22, 2015 ILeaMfh. - TrRLTC ~ The Honorable Robert E. Latta U.S. House of Representatives Washington, D.C. 20515 Dear Congressman Latta: Thank you for your letter dated June 19, 2015, concerning the Btu content of natural gas and its impact on certain classes of end-users. By way of background, the Btu content of natural gas produced in the United States can vary extensively from region to region. The Btu content of natural gas can sometimes vary significantly even within a very small area, or from well to well within an area. This variation in natural gas quality can pose significant challenges to pipelines transporting natural gas to ensure that they meet the needs of producers who wish to transport their natural gas to market and the needs of end-users who seek adequate supplies of natural gas to meet their requirements. Natural gas is transported within the United States on a combination of intrastate and interstate natural gas pipelines, the latter of which are jurisdictional to the Commission. Interstate natural gas pipeline tariffs typically contain provisions that specify the quality of natural gas that can be transported, including the Btu content which is normally set as a range with an established minimum and/or maximum level. The challenge of establishing a suitable range is compounded by the fact that the interstate natural gas pipeline grid is highly interconnected, meaning that natural gas produced from many different areas with different Btu contents may traverse any given pipeline. This mix can quickly change on a given pipeline as natural gas moves around the country. Put differently, the system requires some flexibility to accommodate movements of natural gas of different quality, including varying Btu content. To achieve the necessary gas quality to comply with the standards set forth in interstate natural gas pipeline tariffs, producers and other shippers frequently must process their natural gas to, for example, remove high-Btu natural gas liquids from the natural gas stream. The primary tool that pipelines have to control Btu content once varying sources of supply have been nominated on their systems is to blend natural gas of varying qualities to achieve the desired range. As described more fully below in the responses to your specific questions, the Commission has recognized that pipeline tariff provisions on gas quality and 20150723-0014 FERC PDF (Unofficial) 07/22/2015 interchangeability need ...