Comment Log Display

On behalf of El Paso Corporation Pipeline Group, I would like to
thank the Market Advisory Committee (MAC) on their diligent work
in developing the recommendations on "Designing a Greenhouse Gas
Cap-and-Trade System for California".

Based on the review of the final recommendations, El Paso would
like to highlight the issues we raised in our comments to the MAC,
especially related to regulatory concerns with respect to designing
cap-and-trade programs for interstate natural gas pipelines.  Our
comments are summarized below and I am re-attaching our June 15,
2007 comments for the Board's consideration:

Summary of El Paso’s comments with respect to the Program Scope:

•	There are major regulatory and commercial hurdles that have not
been considered by the MAC, under Option B, that outweigh any
perceived administrative efficacy derived from fewer regulated
entities.
•	El Paso recommends not including both fugitive and vented
methane emissions in any cap-and-trade programs due to substantial
uncertainty surrounding emission estimates from these categories.
•	Vented emissions should not be considered as process emissions.
Instead, this category should be considered as a separate source
category and not be included in the overall cap-and-trade
program.
.
Summary of El Paso’s comments with respect to Early Action
Credits:

•	El Paso recommends issuance of allowances for early action
credits for the natural gas transmission and distribution
sectors.
•	Fugitive and vented emissions of natural gas transmission
companies represent a small fraction of California’s overall 2004
GHG emissions.
•	El Paso and other natural gas transmission companies have
already deployed technologies over the past several years to
mitigate and reduce fugitive and vented emissions.
•	Not providing allowances for early actions will create
inconsistencies with programs such as RGGI.

Summary of El Paso’s comments with respect to Emission Offsets:

•	El Paso recommends incorporation of both case-by-case and
performance-based standards emission offsets.
•	El Paso supports development of performance-based offset
standards and has led industry and stakeholder efforts in this
area.
•	The quality of the GHG offsets must be the primary criterion for
deciding between performance-based and case-by-case offset
standards.
•	The CDM board has approved AM0023 to quantify GHG offsets from
natural gas facilities. El Paso has developed a policy-neutral
technical protocol that incorporates the technical attributes of
AM0023.
•	Inclusion of El Paso’s case-by-case offset protocol for natural
gas transmission and distribution facilities will ensure the
availability of high quality GHG offsets to California’s
cap-and-trade program.  
•	Experience gained through case-by-case offset development will
form the cornerstone for future performance-based offset
standards.

Thank you for your consideration of our comments and if you have
any further questions, please do not hesitate to contact me.  

Sincerely,
Fiji George