The LDC Forum Rockies & West conference, which concluded Wednesday in Irvine, CA, offered a regional glimpse of the post-global credit crunch energy sector. Panel discussions and keynote talks were as significant for what was not emphasized as for what was.

Liquefied natural gas (LNG) was discussed but not with the same level of detail or enthusiasm as in past years at the annual conference; climate change was one of the topics, but not a dominant theme, and price was subordinated in importance to infrastructure and credit concerns. Ironically, it was a regulator, Timothy Alan Simon, from the California Public Utilities Commission, who talked most bullishly about natural gas — not the marketers and distributors who spoke.

It is also telling that the keynote speaker a year ago at this same conference was a partner at Goldman Sachs & Co.; this year it was a state regulator. Concerns 12 months ago were about the West being able to get its “fair share of gas,” and this year the focus was more on the prospect of a supply surplus.

Although their respective companies are not directly supporting LNG development in the West, managers from both Las Vegas, NV-based Southwest Gas Corp. and Houston/San Jose-based Calpine Corp. said they see price advantages from more gas-on-gas competition. “At the end of the day, we’re supportive of anything that adds diversity to the supply mix,” said Tom Gary, director of Calpine’s west region gas supplies. John Olenick, Southwest’s gas buying/transportation manager, echoed that sentiment.

Like all of the panelists this year, the buyers’ group commented on how the credit crisis has begun to alter gas-buying issues.

“From our perspective credit is always a key,” Gary said. “If we lock in a fixed-price, long term supply, we need to have assurance that supplier is going to be around.” Olenick said Southwest looks “a lot closer at suppliers’ credit than we ever did in the past.”

Grocer Safeway Inc. energy buyer Cathy Ikeucki, who deals with supplies in 22 states involving 300 different utilities, called the whole financial area extremely important, while a public-sector utility manager from a small muni in Safford, AZ, Darrin Gordon, said it’s not a concern for his operations.

There was surprisingly little discussion about gas and the power generation sector, and Gary was the only speaker representing the independent or the utility power generators. The closest reference to the power sector, which has been the high-growth area for natural gas demand in recent years, came through discussions on climate change, and both a panel and Simon alluded to gas being a key part of state and federal responses to greenhouse gas emissions.

Another theme alluded to by various speakers was the growing disconnect between gas supply-demand activity and markets. It was not clear from the speakers’ perspectives if the credit crisis will exacerbate this gap or narrow it. Surely, they agreed that capital spending on new supply and delivery projects will be done more carefully and haltingly as credit and liquidity stay in hiding.

Banks and the capital markets are “running scared” and how soon that ends and what the price of gas is at that point, no one had a good answer for.

“There is really no magical floor for how low gas prices could drop; it’s anywhere between $1-4,” said Jim Simpson, vice president for analytics and managing director at Bentek Energy LLC, who noted that at $3 there are more active rigs being put on the shelf in places like the Rockies and elsewhere. “The good news is that the likelihood a $3 gas scenario will last a long time is extremely low.”

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