1990S

The outlook for the natural gas and power industry bears a strong resemblance to the markets in the early 1990s, according to a report issued by Credit Suisse First Boston Equity Research last week. The key difference is the current valuation for the Standard & Poor’s 500 Index is 10% higher than it was in 1992, while the valuation for the natural gas and power sector is 30% lower, it said.

One of the first casualties in the late 1990s energy downturnwas the closure of Texas A&M Engineering and Extension ServiceDrilling Rig School near Abilene, TX. As the industry struggles tobuild up exploration and production activities, it also isstruggling with finding enough workers — and Texas RailroadCommissioner Charles Matthews wants the school to open its doorsonce again.

Boosted by the momentum gained through the 1980s and 1990s withgrowing regional wholesale electricity trading markets inCalifornia, New York, Pennsylvania, New Jersey, Maryland and theNew England states, more U.S. regions now are open to electricitycompetition, according to a report by the Energy InformationAdministration.

Last year set a 1990s record for exploration and productioncapital spending, but the five-year trend of capital spendingincreases may end this year with the first decline since 1992.That’s one finding of Global Upstream Performance Trends, a reviewof domestic and international results for 131 publicly tradedcompanies by Arthur Andersen and John S. Herold.