Ruby LLC
Ruby LLC doubts that GTN will remove pipeline assets from service if the Ruby Pipeline is built. First, GTN's FERC-approved tariff authorizes GTN to backhaul gas from Malin (where Ruby will deliver gas) to Oregon and Washington. Ruby LLC believes the backhauls will undercut GTN's incentive to abandon part or all of its system.
Second, if demand in the Pacific Northwest for Rockies gas strengthens as GTN claims it will for gas-fired generation and other purposes, and the volume of WCSB gas flowing on GTN to Malin drops significantly, it may be possible to reverse flow on GTN so that gas delivered at Malin by Ruby can be transported north on GTN via forward haul. Ruby LLC notes that a GTN affiliate, the North Baja Pipeline, recently installed facilities to reverse flow on its system.
Third, removal of interstate pipelines from service requires that FERC find, under Section 7(b) of the Natural Gas Act, "that the present or future public convenience and necessity permits such abandonment."72 GTN has claimed that its looped pipeline will be needed to transport Arctic gas to California. Ruby LLC doubts that FERC, in the face of large quantities of gas from Arctic sources that GTN predicts will become available, will find that the "public convenience and necessity permits" the abandonment of one of GTN's main pipelines.
Finally, GTN's parent company, TransCanada, has proposed to build a pipeline from Alaska to North American markets. Ruby LLC finds it implausible that TransCanada would spend billions of dollars to transport gas from Alaska's North Slope and simultaneously abandon the GTN pipeline facilities needed to deliver the same Alaskan gas to one of the largest markets in North America.
We agree with Ruby LLC that it is speculative whether GTN will redeploy, idle, or abandon a portion of its pipeline facilities serving California. It is also questionable whether it would be cost effective for GTN to remove half of its pipeline capacity from service as GTN suggests it may do. For the preceding reasons, we conclude that GTN's suggestion that it might redeploy, idle, or abandon half of its capacity serving California if Ruby is built does not warrant a rejection of PG&E's application.
72 15 U.S.C. § 717f(b).
