At the depths of last winter's cold and freeze, as policy makers took hundreds of emergency steps to get natural gas to those parts of the country shivering the most, government officials and pipeline executives worried that the intricate natural gas pipeline system would not be back in shape for the 1977-78 heating season.
So much gas was withdrawn from storage facilities because of the unusually strong demand last winter that policy makers feared the pipelines would not be able to replenish their stores adequately before cold weather returned.
But although those fears seemed valid last February, they now appear to be unfounded. According to preliminary figures gathered by the Federal Power Commission, natural gas pipelines have slightly more gas in storage now, coming off the coldest winter in a century, than they did a year ago, coming off an exceptionally mild winter.
That does not mean that there are ample supplies of natural gas to deal with a cold winter, officials are quick to point out. Supplies are not much greater than they were a year ago. Another winter like the last one again would cause officials and the gas industry to scramble to get gas supplies where they are needed and would trigger industry cutoffs and fresh appeals to conserve.
Storage facilities are critical to the operation of the natural gas distribution system. Natural gas comes out of the ground at roughly the same rate in February, when it is in high demand for heating, as it does in July, when demand is low. Gas pipelines which gather the gas in producing areas and ship it to consuming areas, put the excess summer gas in storage and draw it out in winter when demand often is greater than the rate at which gas comes out of the ground.
By last June 1, natural gas pipelines had about 1.027 trillion cubic feet in their 400 or so storage fields across the country. By the start of the winter heating season last November, they had built their stores up to 1.74 trillion cubic feet of gas roughly 10 per cent of the nation's gas use for a year.
According to preliminary Federal Power Commission data, natural gas pipelines already have slightly more gas in storage than they did a year ago. On June 1, 1977, with five more months to add to their storage, the pipeline companies which report to the Federal Power Commission had stored 1.076 trillion cubic feet of gas, 49 per cent more than the 1.027 trillion cubic feet in storage on June 1, 1976.
The Federal Power Commission regulates pipeline companies that gather gas in one state and ship it for consumption in another state. The FPC also regulates the price producers receive for gas that is sold in a different state than that in which it is produced.
Gas that is consumed in the same state in which it is found -- so called intrastate gas -- is not regulated by the federal agency. Intrastate gas sells for a much higher price than the regulated gas. The maximum federal price is $1.45 per thousand cubic feet, but unregulated gas sells for as much as $2.25 to $2.50 per thousand cubic feet.
Last winter, as gas supplies dwindled, the government made special provisions for interstate pipelines to buy gas at higher prices (up to $2.25) from intrastate pipelines and producers. Pipelines and utilities can buy this high-priced gas until July 31.
Jerry McGrath, an official with the Interstate Natural Gas Association of America, the trade association of interstate pipelines, said that the availability of this unregulated gas has made it possible for beleaguered pipelines to rebuild their reserves.
Although last winter was one of the coldest on record, most of the extreme cold came before mid-February. March and April were unseasonably warm months.
As a result, while pipelines were squeezing every cubic foot of gas they could get from their storage fields in January and February (at some points getting close to the point where they would lose pressure in the storage fields and the pipelines), by March they were replenishing their dissipated inventory.
Several factors enabled pipelines to restock at a faster pace than anyone thought possible last February. The weather turned around quickly from unreasonably frigid to unseasonably warm. Industrial customers who were cut off when the weather got cold were never turned back on, increasing the amount of gas that pipelines could store. And the special sales of intrastate gas at $2.25 per thousand cubic feet further boosted available supplies, as did a cautious, conservationist role by gas consumers.
Nevertheless, one FPC official cautioned that the agency's figures are preliminary. The country will not know until Nov. 1 whether it has as much or more gas in storage as it did at the start of the 1976-77 heating season.
Furthermore, while the country as a whole has more gas in storage than it did last year at this time, the East Coast pipelines had 4.8 per cent less than a year ago, while midwestern pipelines had 14.2 per cent more gas in storage. Western pipelines have increased their storage by 1.9 per cent, and Southern pipelines have boosted storage amounts by 15.2 per cent.
The South, however, has limited storage capability.Last year, only 9 of the 400 storage fields were in the South, which is why that area of the country was hit harder than most by the huge peaks in demand.
Although pipelines as a whole are in better shape than last year, INGAA's McGrath said, "We still have a natural gas shortage: A lot of industries are still faced with cutoffs, and pipelines are supplying gas significantly below their rated capacity."
Because of the higher intrastate prices, producers are refusing to commit gas reserves to the federal market. The only way Congress could coax many intrastate producers to sell, even at the high $2.25 price, was to pass a special law last year pointedly saying that there was no way these intrastate producers could become subject to federal controls if they sold their gas on an emergency basis to hard-hit interstate pipelines or local gas utilities.