Despite a considerable amount of hand wringing, second guessing, and political pressure from various quarters during the period following the issuance of Order 636, Order 636-A is fundamentally a reaffirmation of the basic precepts that the Commission had articulated throughout the rulemaking process. Order 636-A tinkers around the edges, makes a handful of substantive changes, but in the end clings faithfully to the original basics of the Mega-NOPR.
While the current state of the marketplace is not favorable for producers, the structural changes and competitive environment encouraged by Orders 636 and 636-A promise to assist the producing industry over the long term.
Unbundling, Equal Access Unscathed
The two fundamental aspects of restructuring that were most critical for producers (i.e., unbundling and equal access) came through unscathed.
Unbundling allows producers and their customers to tailor a deal to their respective needs. It also eliminates the embedded, historical advantage that interstate pipelines have had in selling gas. Another advantage flowing from the Commission's adherence to unbundling is opportunities for producers, especially small producers, to work with the various marketing and service organizations that have entered the gas business in the open-access era in order to implement new ways to market gas and to take advantage of the services these companies offer. In many instances, this trend will allow producers to reduce costs and/or realize efficiencies in their marketing operations. Unbundling will allow highly effective and efficient niche-type entities to provide transactional services that will benefit both suppliers and consumers. It will also provide (Continued on page 3) William T. Benltam is vice president for regulatory affairs of Amoco Production Cornpony in Chicago. He is responsible forregulatory and legislativepolicy development at both the federal and state level.