E-Business Executives Say Liquidity is Key

In the ever shrinking world of electronic energy exchanges, the bottom line remains that e-business is still business, according to a panel of B2B executives speaking last week at NGI's GasMart/Power 2001 in Tampa. Altra Technologies' Dixie Barrett, Intercontinental Exchange's Rafael Pirutinsky and New York Mercantile Exchange's Tom Martin told the audience that consolidation within their industry will continue, but the marketplace will only end up stronger.

Counting almost 4,000 traders and 300 companies using its system worldwide, Pirutinsky, vice president of marketing for ICE, said the global commodity exchange this week had sold contracts worth 200 Bcf/d and 500 MWh. ICE's success, like other online exchanges that will succeed, will carry the same characteristics, he said: liquidity, transparency and process efficiencies.

"These are fundamental attributes" to ICE's rapid rise, Pirutinsky said. The Atlanta-based ICE, which was formed only a year ago, offers electronic OTC trading in 110 products in physical as well as cash settled derivatives based on oil, natural gas, power and metals, and its electronic platform launched its energy platform last October. It was created by a consortium of major financial institutions and energy companies (see NGI, Oct. 30, 2000).

Barrett, vice president of electronic trading services for the independent exchange Altra, said electronic trading remains a "viable" idea despite the "Internet hysteria" of the past year. Six months ago, Barrett said the marketplace looked completely different than today. It will probably have another look in another six months, but she is confident that Altra will be one of the players.

"Not everyone has been so lucky," Barrett said of the many players no longer in the game. However, she admitted she did not know how the market eventually would shake out. "Who will survive? Altra has survived the initial onslaught. To succeed, you have to maintain liquidity," she said. "It's hard to grasp how fast this is happening." Barrett said that today, companies don't have an "option in their back offices. "You have to be able to integrate everything you have. Any software you have has to integrate with other software."

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