Builder Seeks Swift Approval for Gas Pipeline : OK May Help Kern River Sign Up More Customers

Developers of a proposed natural gas pipeline into California applied Friday for streamlined federal approval, which would remove a major obstacle to construction and stiffen the competition with a major rival.

The Kern River Gas Transmission Co., which is proposing a 902-mile line from Wyoming to Kern County, applied for a speeded-up certificate from the Federal Energy Regulatory Commission, the company said. Approval could come in as little as 90 days, said Gary Cheatham, a vice president with Kern River partner Tenneco Inc.

Until now, the Kern River project has been delayed while waiting for approval of a more traditional certificate from the FERC in an application filed in 1985. A rival project proposed by Wy-Cal Pipeline received a streamlined certificate in January and has been using that as a selling point in the competition for customers.

Keen Competition

“It certainly breaks a deadlock for Kern River, and could possibly speed construction,” said Ellen Beswick, publisher of the industry newsletter Natural Gas Intelligence.

Competition is keen among Kern River, Wy-Cal and several other developers to build a pipeline into California to meet an expected boom in demand for natural gas. Oil producers need the gas to produce steam to help extract thick oil underlying Kern County. Impending clean-air regulations will also increase the demand by utilities for cleaner-burning gas over fuel oil, particularly in light of recent spot gas shortages.

Among other things, a streamlined FERC certificate differs from a more traditional one by placing liability for up-front costs on a pipeline’s developers rather than on ratepayers. Officials at Wy-Cal, which is proposing a 1,000-mile pipeline that would follow a route similar to Kern River’s, said that Kern River’s decision to file for a streamlined certificate came as no surprise but added that they had not yet seen the filing.

Last month, Wy-Cal officials admitted that they would lose an advantage if Kern River received a streamlined FERC certificate. Wy-Cal has fewer customers committed to pipeline space than Kern River. But the officials added that Wy-Cal would still have the advantage of several months’ lead on Kern River, and that they would not be deterred by Kern River’s action.

Kern River had been expected to make the filing since June, when the company announced that it would merge part of its pipeline with the Mojave Pipeline Co., which proposed a 384-mile line from Topock, Ariz., to Kern County. Friday’s filing came out of a settlement among Mojave, Kern River and Southern California Gas Co. in June.

Under the settlement, Mojave and Kern River would operate separate pipelines into Daggett, Calif. There, the two pipelines would merge into a single line feeding Kern County, where oil producers would use the natural gas to generate steam to recover the highly viscous oil. Southern California Gas would be allowed to connect its in-state pipelines to either Mojave or Kern River lines.