[Code of Federal Regulations]
[Title 18, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 18CFR2.400]

[Page 38]
 
           TITLE 18--CONSERVATION OF POWER AND WATER RESOURCES
 
  CHAPTER I--FEDERAL ENERGY REGULATORY COMMISSION, DEPARTMENT OF ENERGY
 
PART 2_GENERAL POLICY AND INTERPRETATIONS--Table of Contents
 
Sec. 2.400  Statement of interpretation of waste concerning natural gas as 
the primary energy source for qualifying small power production facilities.

    For purposes of deciding whether natural gas may be considered as 
waste as the primary energy source pursuant to Sec. 292.204(b)(1)(i) of 
this chapter, the Commission will use the criteria described in 
paragraphs (a), (b) and (c) of this section.
    (a) Category 1. Except as provided in paragraph (b) of this section, 
natural gas with a heating value of 300 Btu per standard cubic foot 
(scf) or below will be considered unmarketable.
    (b) Category 2. In determining whether natural gas with a heating 
value above 300 Btu but not more than 800 Btu per scf and natural gas 
produced in the Moxa Arch area is unmarketable, the Commission will 
consider the following information:
    (1) The percentages of the chemical components of the gas, the 
wellhead pressure, and the flow rate;
    (2) Whether the applicant offered the gas to all potential buyers 
located within 20 miles of the wellhead under terms and conditions 
commensurate with those prevailing in the region and that such potential 
buyers refused to buy the gas; and
    (3) A study, which may be submitted by an applicant, that evaluates 
the economics of upgrading the gas for sale and transporting the gas to 
a pipeline. The study should include estimates of the revenues which 
could be derived from the sale of the gas and the fixed and variable 
costs of upgrading.
    (c) Category 3. In determining whether natural gas with a heating 
value above 800 Btu per scf is marketable, the Commission will consider 
the information included in paragraph (b) of this section and whether:
    (1) The gas has actually been flared, vented to the atmosphere, or 
continously injected into a non-producing zone for a period of one year, 
pursuant to legal authority; or
    (2) The gas has been certified as waste, i.e., suitable for 
disposal, by an appropriate state authority.

[Order 471, 52 FR 19310, May 22, 1987]

 Statement of Penalty Reduction/Waiver Policy to Comply With the Small 
          Business Regulatory Enforcement Fairness Act of 1996