Friday, April 30, 2004

Natural gas impurities raise safety concerns

By Brad Foss
The Associated Press

It used to be that natural gas producers would strip out traces of propane and butane before piping the desired fuel - primarily methane - to power plants and utilities. The impurities were actually worth more than the natural gas itself, so collecting them gave producers a nice side business.

But today, with gas supplies tight and valued at twice their historical average, many producers want to pump as much as they can - impurities included.

The result is a fuel cocktail that many power plants and home appliances weren't designed to handle, presenting safety, environmental and reliability concerns.

Industry officials frustrated by the increasingly inconsistent quality of natural gas have warned federal regulators about potentially dangerous levels of carbon monoxide emissions in homes, increased pollution from power plants and needless wear and tear on gas turbines and home appliances.

With as much as a third of the natural gas from the lower 48 states no longer processed to remove propane, butane and other liquid hydrocarbons, "it can lead to a number of consequences - all of which are bad," according to Keith Barnett, vice president of fundamental analysis at American Electric Power Inc., one of the largest producers of electricity.

In New York, the utility Key-Span Energy was forced to shut a plant several times in 2003 after receiving unprocessed fuel that differed significantly from "what the plant was originally designed to handle," according to a filing with the Federal Energy Regulatory Commission.

The characteristics of natural gas are also changing as high prices attract more imports and domestic drillers find new sources of fuel in unconventional geologic formations once deemed too costly to tap.

Such is the case in Utah, where Quester Gas Co., has been urging some customers to spend $100 per home to adjust settings on older furnaces and water heaters. The company is concerned that the carbon-dioxide rich gas it is siphoning out of coal seams might emit dangerous levels of carbon monoxide without the changes.

'In the learning phase'

Several industry officials said it is too soon to know just how severe the problems may be.

"This is not a panic situation by any stretch of the imagination," insisted Lori Traweek, senior vice president of operations and engineering at the American Gas Association, which represents local gas distribution companies. "There has to be comfort in knowing that this issue is being addressed."

Yet other industry officials were more cautious, stressing the need for more research into the potential safety and reliability risks.

"We're still in the learning phase," said Mark Kendall, vice president of technical affairs at the Gas Appliance Manufacturers Association, an Arlington, Va., trade group that will hold a conference on the issue in June.

Concerns at the trade group, Kendall said, are excessive carbon monoxide emissions, as well as excess soot and other damage to gas stoves, water heaters and furnaces that could reduce their lifespans by as much as 50 percent.

Meanwhile, the National Petroleum Council, a group of energy executives that advises the Energy Department, urged the government in September to address the issue of natural gas standards in preparation for rising imports of liquefied natural gas, or LNG.

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