To: NAESB Triage Subcommittee, Other Interested Parties

To: NAESB Triage Subcommittee, Other Interested Parties

From: Ben Schoene, WGQ Executive Committee Member

Subject:ConocoPhillips Company R16003 Triage Comments

Date:May 13, 2016

Dear Triage Subcommittee and Other Interested Parties,

ConocoPhillips Company’s (COP) position is that this request is not in scope. Article 2, Section 2.2(b) of NAESB Bylaws regarding NAESB’s purpose, scope, activities and policies state the following:

Develop Practices, Not Policy – The committees, subcommittees and task forces of NAESB should endeavor not to create policy in their Standards or Model Business Practices development activities absent being requested to do so by the Board.

Incorporate Best Practices – To the extent reasonable, the Standards and Model Business Practices to be established should reflect standardization and streamlining of activities chosen as best practices from among existing and reasonably anticipated policies and practices.

COP contends that it is inappropriate for NAESB to develop business standards for Transportation Service Provider (TSP) services that are not currently defined either by FERC policy, or either any TSP’s tariff or TSA. The request specifically notes that the Best Efforts Scheduling Process “…is not otherwise provided for under the Service Agreement under which the SR is requesting service.” Further, COP is unaware of any intent for either FERC or any TSP’s to develop such a policy or practice and there is no mention in the request of such an effort. The development of such standards likely creates the need for policy to be developed and presupposes the outcome of such policy, and at a minimum, pipeline tariff rules. COP’s general position is that either FERC policy or pipeline tariff language should drive NAESB standard development.

COP recognizes that “best efforts” (very broadly defined) types of scheduling practices occur. However, the low frequency of occurrence and the non-discriminatory practice requirements render such practices immaterial in the potential to degrade the proper marketplace functionand thus, there is no need for standards development. Still, COP is willing to consider opposing views and arguments prior to voting.

To the extent that this request doesn’t fail on the aforementioned merits, a better definition of the Best Efforts Scheduling Process is necessary as this concept could conflate activity with service characteristics with activity that supports operational efficiency. An example of the latter would be where extreme changes in gas flow or nomination errors are communicated to a TSP prior to the next scheduling cycle, such that the TSP can better manage physical flows in anticipation of the results of the next cycle. These activities, while ultimately requiring some level of nomination, do not appear to fit what is contemplated by this request but could be adversely affected. We should not develop standards that inhibit or conflict with operational efficiency and therefore must be aware of any unintended consequences. The broad and general nature of “best effort” service provided by TSP’s likely encompasses numerous types of activity and thorough vetting and alignment is necessary before proceeding to standardization.

Please feel free to contact me to discuss.

Sincerely,

Ben Schoene