Slide 11 of 17
Notes:
As you can imagine, there is a continuum of events that can occur:
1. On the lesser side, a meter goes out, throughput at a processing plant is slowed due maintenance, or a leak on a feeder line is discovered. 5 such events having no discernable impact on supply occurred this past August, though we expect many more went unreported.
2. In the middle of the continuum is extensive maintenance, smart pigging, or a processing plant that suffers an explosion and the flow of natural gas is decreased. In response, gas companies must issue consumption restrictions such as penalties for unauthorized overpulls or OFOs which goes beyond reestablishing the limit a customer is able to pull from the system on a given day to require that a customer cannot take more than 1/24th of the daily volume in any given hour. In addition, economic incentives can induce gas companies to reroute supplies to the affected area. 12 such events were reported in August, a fairly typical rate.
3. On the serious side, a hurricane can close some major sectors of the Gulf of Mexico reducing supplies to the East Coast or a pipeline rupture can cause a pipeline to be out for a number of weeks as the situation is investigated, similar pipelines are inspected, and repairs get underway. Shortfalls can persist despite industries' best efforts.
One such event occurred August 19, 2000.
