The one-day “Natural Gas Summit” held yesterday in Coloradoturned out to be quite an eye-open for industrial gas customers andsuppliers alike, according to participants.

“…[W]e’re finding out that a lot of folks in the natural gasbusiness don’t know what the customer wants or what our concernsare,” said Lee Gooch, vice president of the energy department atPCS Nitrogen Fertilizer L.P. (formerly Arcadian Corp.) in Memphis,TN.

Gooch, who oversees the purchase of 150 Bcf/year for hiscompany, was one of 30 gas consumer representatives who met withgas industry executives at the Natural Gas Council-sponsored summitMonday in Colorado Springs, CO. He joined a panel of industryexperts in a teleconference briefing with reporters.

During the summit, “[we] heard from our customers that they wanta single-point contact. They want to be recognized that they haveunique positions in the marketplace,” as well as operate within”tight business frames,” said Gary L. Neale, chairman of NiSourceInc. and chairman of the American Gas Association (AGA). NiSourceslearned that it needs to focus more on its customers’ needs and”less on what we call traditional utility considerations.”

Gooch, who represented the Process Gas Consumers Group, noted anumber of fertilizer plants in North America have been hard hit bythe steep rise in natural gas prices this year. Many have beenforced to close their doors because they can’t compete withfertilizer produced with “much cheaper” gas in Russia, Trinidad,Venezuela and elsewhere, he noted.

But “I think there is help on the way. I’m certainly hearingthat…today about all the drilling that’s going on. So it’s just amatter of time [before] the gas shows back up in the marketplace,”Gooch said. Jerry Jordan, president of Jordan Energy and chairmanof the Independent Petroleum Association of America (IPAA),estimated that drilling for natural gas has risen 90% in the pastyear and a half.

Richard J. Sharples, president of Anadarko Energy Services andchairman of the Natural Gas Supply Association (NGSA), believesthere will be sufficient gas supply to meet the summer gas demandof electric generators as well as the winter demand of traditionalgas customers. “It’s a matter of transition. We’ll get there,” hesaid.

But Gooch appeared to have some doubts. It “looks as thoughconsumption right now is outstripping supply and we’re all veryconcerned. So we’re here to…..be assured that there’s plenty ofsupply out there.”

Industrial gas customers are “very much aware” of the problemthe gas industry is having in refilling storage this summer due tothe demand of electric generation, and they are concerned about theeffects this could have on reliability of service and prices nextwinter, Gooch noted. If “we’re going to fill up [storage] anddeplete it and fill it up again all in one year, I’d like to seehow that’s going to be done.”

Moreover, Gooch believes the federal government is putting fartoo much emphasis on natural gas as “the clean fuel and thecure-all for [all] our environmental problems.” He said he’d prefer”a more balanced approach by the government to improve all fuelsand their impact on the environment, rather than just point tonatural gas.”

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