The Pipeline Business
Stephen P. Reynolds
President & CEO
Pacific Gas Transmission Co.
Standardization has been an issue in every industry since the beginning of the Machine Age. As products continue to evolve, we need something like GISB to help find a prudent and appropriate level of standardization. We should take care, however, not to let standardization stifle product development or business opportunities.
Something like GISB creates the forum for industry debate on what needs to be done. What we don't need is a series of edicts telling the industry what it has to do.
Beverly A. Wharton
President, Gas Division
MidAmerican Energy Co.
We agree with the FERC that a standardization of EBBs is necessary, but feel that progress so far has been slow and unfocused. The pipelines to date have been pursuing individual paths, which has caused confusion, incompatibility, and additional administrative effort for interested parties. The problem appears to be resolved to some extent by commercial services that offer a one-stop call for access to various pipeline EBBs. Standardized EDI is still needed to link existing pipeline bulletin boards for efficient and effective operation of the natural gas industry. The FERC needs to step up its efforts to get GISB and other industry players to advance in this area quickly.
Bernard J. Kennedy
Chairman, President, & CEO
National Fuel Gas Co.
As a customer of five pipelines, National Fuel can see how further standardization would decrease the amount of time required for pipeline transactions. It would clearly improve our efficiency if we did not have to maintain familiarity with the unique features of five separate bulletin boards or, for that matter, five separate tariffs. However, further standardization would entail additional costs for the pipelines, and these costs are ultimately absorbed by their customers. The details of the transportation and storage services offered by the pipelines differ in significant respects, and pipeline investment in information systems to support these various services is in some cases substantial. The issue is therefore quite complex.
But is the game worth the candle, or more accurately, is the balance of the game worth the candle? As a general matter, we do not believe that the FERC should attempt to assess the relative costs and benefits of each of the many opportunities for further standardization of EBBs and EDI. Nor should the FERC mandate its conclusions. GISB, which emerged out of the various working groups established under FERC oversight, is in a position to make a significant contribution to the industry, albeit in an advisory capacity. For the most part, however, the amount of progress we see toward standardization, and the pace of that progress, will be determined by the market (em as it should be. Competitive pressure will force the pipelines with the least efficient systems to modify them or devise new ones, and to develop systems that are more compatible with each other. Meanwhile, third parties will offer services that make it easier for pipeline customers to transact business with multiple pipelines. This is clearly happening now. In the marketplace, inefficiency creates opportunity, so what needs