The course will describe the key elements of the natural gas supply chain, infrastructure, and operations of natural gas utilities, with extensive discussions on regulation of natural gas utilities by State Public Utility Commissions (PUCs), State Authorities, Federal Energy Regulatory Commission (FERC), and Pipeline & Materials Safety Administration (PHMSA). It will include an overview of the domestic natural gas industry, with emphasis on shale gas, pipelines, underground and surface storage, and liquefied natural gas imports and exports. We will also discuss how FERC sets interstate pipeline transportation and storage rates and the role of peak shaving plants. 

Since natural gas utilities actively purchase and transport wholesale natural gas to serve their customers, the course will cover how gas is priced in bidweek and daily markets, pipeline nominations, and how natural gas utilities can physically and financially hedge their gas supplies and price volatility. Finally, decarbonization of natural gas is a growing challenge of the natural gas industry, so we will discuss decarbonization via renewable natural gas, hydrogen blending, methanation, and responsibly sourced natural gas. 

Learning Outcomes  

• Determine how local distribution companies (LDC’s) fit in the natural gas supply chain
• Review natural gas utility activities in the physical natural gas markets, pricing mechanisms, and how LDCs can hedge gas supply and price volatility
• Discuss pipeline transportation and the increased role of Asset Managers in managing LDC gas supply, delivery, and pipeline capacity  
• Assess existing and new FERC and PHMSA requirements affecting natural gas utilities
• Identify technologies and techniques that LDCs can use to decarbonize natural gas

MONDAY, MARCH 13, 2023

Local Distribution Companies

• Mission and Function
• Types of Natural Gas Utilities and Sizes
• Infrastructure
• Customer Classes
• Delivery of Natural Gas to its End Point
• Components of Residential Natural Gas Prices
• Regulators: State PUCs, FERC, and PHMSA
• LDC Regional Growth Trends

The Natural Gas Supply Chain

• Upstream, Midstream, and Downstream Facilities and Activities
• Major Players and Who Regulates Them
• Important LDC Activities
• New Markets (CNG and LNG Vehicles) and Others

State and Federal Jurisdictions

• Overview of State Regulation of Natural Gas Utilities
• FERC Regulation
• FERC Regulation of Pipelines, Storage, LNG Terminals, and LNG Peak Shaving Plants
• Overlapping State and Federal Jurisdictional Provisions Under FERC, CFTC, and PHMSA

PHMSA Safety Laws and Regulations

• Recent Laws
• Framework of Federal Pipeline Safety Program
• New Regulations
• Methane Reduction and Leak Detection

Important FERC Forms for Natural Gas Utilities

• Form No. 549B: Index of Customers
• Form Nos. 2, 2A and 3-Q: Major, Non-Major, and Quarterly Reports of Natural Gas Pipelines
• Form No. 552: Annual Report of Natural Gas Transactions
• Form No. 549D: Quarterly Transportation & Storage Report for Intrastate Natural Gas and Hinshaw Pipelines

The Natural Gas Supply Chain

• Upstream, Midstream, and Downstream Facilities and Activities
• Major Players and Who Regulates Them
• Important LDC Activities
• New Markets (CNG and LNG Vehicles) and Others

FERC Rate Making

• Overview and Approach
• Section 4 and Section 5 Rate Cases
• Recent Cases with Implications for Natural Gas Utilities

Natural Gas Pipelines and Storage Facilities

• Locations
• Top 10 Natural Gas Pipeline and Storage Companies
• Role of Shippers and Purchasers
• How Pipelines Operate; Nominating Gas
• LNG Peak Shaving: The Other Storage Option

Pipeline Capacity Releases and AMAs

• Background and FERC Order 712
• Why It’s Important
• Growth of Capacity Releases and AMAs

TUESDAY, MARCH 14, 2023

Decarbonizing Natural Gas

• Challenges, Techniques, and Technologies
• Renewable Natural Gas
• Hydrogen Production and Blending
• Methanation
• Responsibly Sourced Natural Gas
• Green Natural Gas and Role of Offset

Physical Natural Gas and Financial Gas Market

• Overview
• Key Differences
• Forwards and Futures

Physical Natural Gas: Buying and Selling

• NAESB Contracts
• Where Can Physical and Natural Gas Be Bought and Sold
• Bidweek (Next Month Gas)
• Daily Gas
• Intraday
• Weekend Gas Markets

Natural Gas Pricing

• What’s Driving Natural Gas Prices?
• How Is Natural Gas Priced?
• Role of Index Publishers and Price Discovery
• Natural Gas Indices and Fixed Price Deals
• Major Trends on How Sellers and Purchasers Price Physical Natural Gas
• Examples of Physical Natural Gas Purchases
• Recent FERC Concerns with Natural Gas Index Use and Liquidity

Hedging with Natural Gas

• What Hedging Really Is
• Should You Use Financial Hedge? Are You Allowed to Hedge?
• How Natural Gas Utilities Physically Hedge Natural Gas
• How Natural Gas Utilities Financially Hedge Natural Gas
• Examples of Hedging Natural Gas Purchases

Natural Gas Markets: Regulatory Perspectives

• Who’s Watching the Natural Gas Industry and Markets for Manipulation?
• FERC, Commodity Futures Trading Commission, and States
• What Gets FERC’s Attention in the Natural Gas Markets
• FERC’s Hotline
• Fines and Penalties Assessed by FERC

Tom Russo, Principal, Russo on Energy, LLC

Tom Russo is an Energy and Environmental expert with unique FERC regulatory skills in oil, natural gas and liquefied natural gas infrastructure, NEPA environmental impact assessment and in how energy markets, prices and physical/cybersecurity affect infrastructure investments.

Prior to founding Russo on Energy LLC in May 2015, Mr. Russo worked for over 30 years as a Manager and Sr. Energy Industry Analyst at the Federal Energy Regulatory Commission (FERC). During that time, he amassed experience in the natural gas and crude oil markets and its regulation by the FERC. Mr. Russo thoroughly understands the Natural Gas Act, Natural Gas Policy Act, and Interstate Commerce Act which are applicable to natural gas and oil pipeline transportation.

Mr. Russo is also an adjunct professor at the George Washington University’s Elliott School of International Affairs. He teaches Global Energy Markets and Global Energy Security to undergraduate and graduate students. He actively conducts independent research on oil, natural gas, and power matters and writes an Energy and Environmental column for the Climate & Energy Journal.