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Industry Must Win Over Public, Warns Hebert  
Date: November-09-2000


The interstate pipeline industry — as well as the gas industry as a whole — needs to do a better job of public relations if it is to convince landowners as well as local and state governments of the need for new capacity, according to FERC Commissioner Curt Hebert.

In a speech before the Interstate Natural Gas Assn. of America (INGAA) Foundation’s annual meeting in Monterey, Calif., Hebert said that equally important is for the industry to convince Wall Street that it’s worth investing in infrastructure.

But that task has become more difficult in an election year, said Hebert. Despite the need to ensure deliverability and adequacy of supply response, meeting America’s "growing appetite" for energy has become more difficult as politicians call for introducing price caps or soft caps.

Hebert had in mind measures introduced by FERC on Wednesday to deal with the price situation in the California power market. That sort of measure, he said, sends the wrong signal to the market.

Hebert also held the current administration responsible for creating a diminished view of the energy industry as a whole.

Indirectly, said Hebert, the election campaign has been responsible for tarnishing the industry’s image. The public, he said, fails to distinguish between different sectors of the industry.

"Americans don’t really understand Big Oil," he said. "They see everyone ... as one: the pipelines, the [local distribution companies], the electric companies. People kind of lump energy into one category ... as Big Oil."

If the election yields a victory for a Democratic administration, Hebert implied, "you’re going to inhibit or stop any and all additional pipelines that are even somewhat controversial." That will further exacerbate a situation where there is already insufficient supply and deliverability.

Ironically, said Hebert, such a scenario would guarantee profits only for major production companies. "Is that under a Bush scheme or under a Gore scheme?" Hebert asked. "That’s under a Clinton-Gore scheme. More competition would spread the wealth out."

While Hebert stopped short of explicitly endorsing a new Alaskan pipeline route, he asked which administration would be most likely to make the right decision.

Both the industry and politicians are faced with some hard choices, said Hebert. "There are almost two choices we can make at every juncture," he said. When considering whether to open the Alaska National Wildlife Refuge (ANWR) to exploration, "I don’t want to drill — but it comes down to choice, doesn’t it?"

In the case of ANWR, said Hebert, it’s a choice between keeping that part of Alaska’s North Slope off limits, or becoming more or less dependent on Saudi Arabia. There are ways that ANWR can be brought to market while leaving a "small footprint" on the environment. Hebert recalled the astonishment of other commissioners when they viewed Alaska energy projects from the air.

Regulators, as well as politicians, he hinted, need to muster the political courage to tackle new pipeline projects.

While Hebert blamed election-year politics for clouding the need for new pipelines, he didn’t let the industry off the hook either. He chastised the industry for a failure to engage the public in developing new projects. "Pipelines need to do a better job of public relations," he concluded. "Quit sending people like me."

Reprinted from Gas Daily with the permission of the publisher, FT Energy, 1600 Wilson Blvd., Suite 520, Arlington, Va. 22209. For subscription information, phone 800-424-2908 or browse www.gasdaily.com


Author: Gas Daily





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