Table 213 Natural Gas Interstate Pipeline Specifications

Contaminants may not exceed the following levels:

20 grains of elemental sulfur per 100 cubic feet

1 grain of hydrogen sulfide per 100 cubic feet

7 pounds of water per million cubic feet

3 percent of carbon dioxide by volume

Other impurity (i.e. oxygen, nitrogen, dirt, gum, etc.) if their levels exceed amounts that the buyer must incur costs to make the gas meet pipeline specifications.

Source: Handbook on Gas Contracts, Thomas G. Johnson, IED Press, Inc. Oklahoma City, OK. 1982, page 63

Source: Handbook on Gas Contracts, Thomas G. Johnson, IED Press, Inc. Oklahoma City, OK. 1982, page 63

Figure 21.8 Typical Natural Gas Basis Differentials between Hubs and Major Market Points.

directly from the long haul transporter to the consumer. There are hundreds of distribution companies in the country. Some are investor owned utilities while many are municipality owned and operated. Some are co-ops formed for distributing the gas.

The trade association representing this group of gas companies almost exclusively is the American Gas Association, headquartered outside of Washington, DC. Information and data on the industry as a whole, and on distribution companies can be obtained from this organization. Its address and web site are listed in Table 21.4.

The local distribution company is usually regulated by the state regulatory agency such as the Public Service Commission. It may also be under local regulation by the city or municipality it serves. This group of natural gas transporters is yet to be deregulated throughout the country. Some states, Georgia the most notable, have passed new regulations much like the decontrol of the national pipelines. In these locations, the transporter is strictly a mover of gas and has no merchant function. It may have a subsidiary or affiliated company doing the merchant function or marketing of the gas. The eventual result of deregulation at this level will be for local distribution companies to offer open access to their transportation facilities. Each state will have to make its decision as to whether the LDC is freed from the merchant role or retains it if only in part along with offering open transportation for other merchants to move gas to the final consumer.

The odorizing of natural gas so that its presence can be detected easily since natural gas as such is an odorless gas, is usually done by the local distribution company before distributing the gas. The odorant is a sulfur containing hydrocarbon with an obnoxious odor that can be detected by human smell even when used in very small, minute quantities in the gas. While it is commonly thought all natural gas must be odorized when it is sold to the user, this is not necessarily correct. Gas going to industrial uses where the sulfur containing material giving the odor could be harmful to the process need not be odorized. There are both federal and state regulations governing the odorization. In buying natural gas, the buyer should insure the contract includes provision for adding the odorant and whose responsibility it is for proper addition and monitoring.

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