News 
2007
| Statement: February 15, 2007 | 
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| Docket Number: CP06-12-000 et al. & CP05-420-000 | |
Chairman Joseph T. Kelliher's statement on Gulf LNG Energy, LLC & Bayou Casotte Energy LLC
"I called these orders for discussion so that the staff could brief the Commission on
the status of applications for authorization for liquefied natural gas (LNG) import
facilities.
The North American natural gas market is changing, and changing fundamentally.
The plain fact is that North American gas supply is no longer adequate to meet North
American gas demand. That is true even assuming the eventual construction of an
Alaskan natural gas pipeline. Our gas market is no longer a U.S. gas market, and
increasingly is no longer a North American market. Instead, we are becoming part of
a broader international gas market. There are implications to that development,
some of which we can appreciate.
There is significant concern about the adequacy of natural gas supply, overall price
levels, and price volatility. In the context of the internationalization of our gas
markets, we can take action to assure adequate supply and reduce price volatility.
We can increase gas supply through expanding LNG import capacity. We can
increase gas storage capacity, which serves as a physical hedge. We can assure
greater price transparency. We can police the markets, enforcing the antimanipulation
rule. The Commission has a good record in all of these areas.
However, it is important to recognize the relationship between infrastructure and
supply and between infrastructure and price. Infrastructure is the ability to produce
energy supply and move it to where it is most needed. If energy infrastructure is
inadequate, the predictable result is higher prices and greater price volatility.
Of course, that does not mean all proposed energy infrastructure projects must be
approved. It does suggest, however, that uniform opposition to energy
infrastructure proposals may come at a cost, in the form of higher energy prices and
greater volatility."
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