Negotiations to settle a natural gas trade dispute between California regulators and Canadian producers have reached an impasse, a Canadian official says.
Brian Frank, director of gas exports for the Canadian energy department, said negotiators have been unable to reach agreement on several important points.
"We still have a number of outstanding differences that have to be resolved," Frank said. "We all agree on how we envision the market. Our differences relate to how we are going to get there."
Frank declined to give details on the areas of dispute but said the Alberta government and the California Public Utilities Commission are moving further apart. He said negotiators on both sides still want a settlement but no target date to reach one has been set.
CPUC has ordered that the Alberta-California pipeline be opened to all gas shippers this fall. A pool of 190 Canadian gas producers says that would violate contracts giving them 75% of pipeline capacity. CPUC also wants the system open to more lower priced spot gas sales.
The commission has ordered Pacific Gas & Electric Co. to renegotiate agreements with producers by Oct. 1. More than 500 contracts and gas sales worth as much as $1 billion/year are involved.
In a recent decision, CPUC forced Southern California Gas Co., to drop proposed contracts with its suppliers because the commission said price cuts were not large enough.
Governments at the federal, state, and provincial levels in Canada and the U.S. are participating in talks to resolve the dispute. The parties agreed on a set of general principles and objectives 2 months ago, but little progress has been made since then.
Meanwhile, activity is accelerating on a $1.6 billion construction program to expand capacity of the Alberta-California gas pipeline system by 75%.
Pacific Gas Transmission Co., San Francisco, said about 3,000 workers are involved in California, Idaho, and Washington state. PGT said it is spending $3 million (U. S.)/day on construction, and the workforce will increase to 5,000 within a month on the 839 mile line.
Alberta Natural Gas Co., Calgary, said it expects approval soon from the National Energy Board for a $224 million project with Foothills Pipe Lines Ltd. in Alberta and British Columbia to connect with the PGT project.
The new lines will add 903 MMcfd of capacity for delivery to markets in California, Idaho, Washington, and Oregon.
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