Natural Gas Plan Needed To Provide Greater Protection for High-Priority and Critical Uses

Conventional sources of natural gas supplies are being depleted. Federal natural gas legislation clearly shows Congress' intent to ensure the efficient use of natural gas over the long term. It has had very limited success in previous attempts to restrict consumption and growth in the natural gas market through means of a coal conversion program and an end-use curtailment policy. Natural gas policies and strategies have been implemented at the State and local levels and by interstate pipeline companies to meet their economic self-interests and local needs. GAO reviewed the natural gas policies in nine States.

Some of the States reviewed had no curtailment policy or controls. Some issued no curtailment guidelines for utility companies under their jurisdiction but approved end-use curtailment plans on a case by case basis. One State directed utilities to file curtailment plans and suggested they follow the Federal priority-of-service categories but approved the utilities' plans whether or not such priorities were followed. The other States had developed a single statewide curtailment plan that local utilities were required to adopt and follow. The final use of natural gas did not necessarily conform to the Federal prioritized system of curtailment. Federal authority to control or regulate natural gas did not extend beyond delivery to utility companies. Federal efforts to control the attachment of new customers has been jurisdictionally limited. Of the 22 utility companies included in the GAO review, 18 were seeking new customers. GAO found that 75 of the 78 large industrial end-users contacted had installed an alternate fuel capability as a result of prior natural gas shortages. Of the large industrial end-users, 22 believed that future natural gas supplies would be adequate. GAO reviewed the growth of new hookup policies of three interstate natural gas pipeline companies and noted that all three were permitting their distributers to attach new customers. Two of the companies were not promoting gas for industrial boiler use.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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