Everyone wants Washington to take action, but when politicians and regulators start moving ahead with reform plans it is a good bet almost no one is going to be happy with the outcome.

The energy sector, as one of the most heavily regulated industries in the country, has some surprisingly freewheeling elements following the piecemeal and incomplete deregulation of energy trading that followed decades of extreme centralization. Efforts to dismantle the old central-planning model of energy markets were halted by the extraordinary complexity of market disruptions in the late 1990s and early 2000s and have been lagging in the decade since.

The Federal Energy Regulatory Commission, an agency with a high-stakes remit and a disarmingly low profile, has – under the leadership of Chairman Jon Wellinghoff – been pushing to get the process of deregulation (which might be better labeled re-regulation in a new, supposedly more market-friendly format) back underway. Unsurprisingly, entrenched companies with near-monopolies and the state regulators charged with maintaining reliability have been less than enthusiastic about the slow rollout of changes to the electricity markets and many of the details of implementation remain inchoate.

But with the juggernaut of power market re-regulation under way, the commissioners at FERC have begun to turn their eyes to the natural gas market. Natural gas markets were at the heart of many of the problems that caused massive blackouts in California 13 years ago and prompted a rethink of the electricity sector deregulation featured in the collapse of Enron.

Natural gas as a commodity and as a market has become substantially more central to the prospects of both the energy sector and the broader American economy in the intervening decade. Use of the fuel has steadily climbed in response to low prices, themselves a result of an a production boom stemming from fracking that in the days of spiking fuel prices a decade ago would have seemed impossible.

FERC, like most federal government agencies, is prevented by its very structure from moving truly quickly in spreading its oversight to new or once-surrendered areas of enterprise. The commission has taken the relatively low-stakes step of issuing a “Notice of Inquiry” (NOI) to the industry at large seeking comments on how natural gas market transparency works today, in an effort to be certain that unlike their cohorts in financial regulatory bodies, FERC isn’t caught asleep on the job.

The NOI couldn’t be more innocuous as a federal action; if FERC wanted a specific change to current business or market practice they would have brought charges or levied fines on a participant. Instead, as law firm Ballard Spahr points out in a recent research note, there is not even a specific timeline from action in the NOI, on which comments were due this week.

That doesn’t mean market participants won’t freak out at the prospect, through. From Ballard Spahr:

“A broad cross-section of natural gas market participants expressed significant opposition to a proposal by the Federal Energy Regulatory Commission (FERC) to require increased reporting of natural gas transactions. In comments filed on February 12, 2013, market participants responded to FERC’s notice of inquiry (NOI) requesting input on potential regulatory changes to its market transparency provisions.

“Market participants that would be affected by any regulatory changes include producers, pipelines, marketers, local distribution companies (LDCs), shareholder-owned utilities, and industrial end-users. Many commenters criticized FERC for failing to articulate the rationale for additional reporting requirements. They also noted that FERC’s statutory authority to collect data is limited to jurisdictional transactions and that, at best, this only constitutes a small portion of the market.

“In addition, many parties noted that the jurisdictional slice of the market is impossible to identify, presenting significant compliance hurdles. Confidentiality concerns were also raised. Many parties, including producers and end-users, maintained that no amount of lag time between reporting and public dissemination would address those concerns.”

The law firm, which was featured in Breaking Energy video interviews here and here, is hosting a webinar on the NOI on February 20. Learn more about that here.

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