Many leaks in pipeline policy
The policy is also silent on important aspects, such as transnational pipelines built under inter-government agreements.
By Piyush Pandey, TNN |
MUMBAI: THE government has finally announced the much-awaited pipeline policy, which will be implemented once the regulator is in place by January 2007. However, despite several meetings to invite comments from the industry, the government failed to make the necessary changes in the proposed policy leaving it with several loopholes. Even the Planning Commission is at loggerheads with the petroleum ministry for not making critical changes recommended by the former. Compared with similar policies worldwide, the policy document leaves many areas unanswered. The very purpose of the pipeline policy remains unclear as it fails to clarify the provisions contained in the Petroleum and Natural Gas Regulatory Board Act.
Besides taking away the independence of the regulator, the policy completely overlooks storage, which is an integral part of any transportation and distribution network. The policy is also silent on important aspects, such as transnational pipelines built under inter-government agreements.
“Despite several meetings to invite comments, the petroleum ministry has stopped well short of making necessary changes to the policy document. More importantly, no valid arguments are given for not making critical changes recommended by the Planning Commission,” according to the commission’s principal energy advisor Surya Sethi.
The policy fails to clarify the difference between ‘contract carrier’ and ‘common carrier’. As per the Act, a contract carrier is deemed a common carrier if it has surplus capacity beyond the contract period (which can be as short as one year).
The policy would have served an important purpose had it clarified that all pipelines are common carriers but allowed to contract transportation capacity on a long-term basis.
When contacted, petroleum minister Murli Deora acknowledged there were differences with the industry on the pipeline policy. “The final policy has been announced keeping in mind the interests of all the stakeholders. Some players wanted to make certain changes, while the others opposed (it). The ministry cannot keep everyone happy. We are in the process of appointing a regulator soon,” he added.
The pipeline policy also does not specify the term of the permission and license granted for developing pipelines.
Under Sections 2.1 and 2.2, the policy excludes from its purview dedicated pipelines feeding ‘specific consumers’, leaving a big loophole. Any pipeline can be regarded as dedicated to one or more ‘specific consumers’ and such exclusion could lead to unhealthy practices. It also raises the issue of future developments along with path of dedicated pipeline and sharing the way.
Besides taking away the independence of the regulator, the policy completely overlooks storage, which is an integral part of any transportation and distribution network. The policy is also silent on important aspects, such as transnational pipelines built under inter-government agreements.
“Despite several meetings to invite comments, the petroleum ministry has stopped well short of making necessary changes to the policy document. More importantly, no valid arguments are given for not making critical changes recommended by the Planning Commission,” according to the commission’s principal energy advisor Surya Sethi.
The policy fails to clarify the difference between ‘contract carrier’ and ‘common carrier’. As per the Act, a contract carrier is deemed a common carrier if it has surplus capacity beyond the contract period (which can be as short as one year).
The policy would have served an important purpose had it clarified that all pipelines are common carriers but allowed to contract transportation capacity on a long-term basis.
When contacted, petroleum minister Murli Deora acknowledged there were differences with the industry on the pipeline policy. “The final policy has been announced keeping in mind the interests of all the stakeholders. Some players wanted to make certain changes, while the others opposed (it). The ministry cannot keep everyone happy. We are in the process of appointing a regulator soon,” he added.
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Section 14 (1)(b) of the Act excludes contract carriers from having to register in the Petroleum and Natural Gas Register like common carriers even though contract carriers are required to obtain authorisation in the same manner as a common carriers. The policy fails to clarify this anomaly. The pipeline policy also does not specify the term of the permission and license granted for developing pipelines.
Under Sections 2.1 and 2.2, the policy excludes from its purview dedicated pipelines feeding ‘specific consumers’, leaving a big loophole. Any pipeline can be regarded as dedicated to one or more ‘specific consumers’ and such exclusion could lead to unhealthy practices. It also raises the issue of future developments along with path of dedicated pipeline and sharing the way.
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