Abnormally

Electricity providers around the country, already feeling the sting of abnormally high natural gas prices, are bracing for prices to climb to even loftier levels next year. At the same time they said they don’t anticipate blackouts this summer or Congress passing climate-change legislation.

Abnormally mild U.S. weather over the past year has reduced natural gas demand enough to lead to a modestly oversupplied market, according to Raymond James analysts, who warned for the second time in two weeks that gas prices could hit $10/Mcf by the end of this summer.

Citing the effects of Hurricane Isabel, Columbia Gas said Friday its markets in southeast Virginia were “taking gas at abnormally low levels” and the condition might require issuance of an OFO. Columbia said its ability to receive gas into Market Area 34, “specifically at the Emporia interconnection with Transco,” was very limited. Market Area 34 was already subject to Critical Day restrictions (see Daily GPI, Sept. 10). To avoid an OFO, customers were asked to minimize receipts into Market Area 34, especially at Emporia, where zero non-firm receipt capacity was posted. “Customers should attempt to verify the existence of their actual market prior to scheduling deliveries into Markets Areas 33 and 34,” the pipeline continued. See the bulletin board for actions that Columbia took to protect system integrity and other details.

If prices hadn’t been so abnormally high to begin with, it might have been considered a market meltdown. As it was, prices registered steep declines Friday that reached triple digits in the Northeast and at several other points. Rockies, Pacific Northwest and California quotes tended to see the smallest losses of 30-50 cents; otherwise it was rare for any point to fall by less than 60 cents.

ANR said that as a result of normal pigging operations from offshore Louisiana to its Patterson Compressor Station, it “has encountered an abnormally large quantity of liquids in the line,” which has shut down the station. Until the liquids issue has been resolved and Patterson is back online, ANR will not be scheduling any interruptible deliveries between Patterson and Eunice, LA until further notice.

The continuation of abnormally high gas prices at the Southern California border in relation to prices elsewhere in the country proves El Paso Merchant Energy’s 15-month contract for 1.2 Bcf/d of firm capacity on its affiliate pipeline–El Paso Natural Gas–was not the cause of high prices in the state of California, El Paso Corp. said yesterday. Its critics said, however, the $3.24/MMBtu decline in Southern California bidweek prices, which was much sharper than the declines elsewhere this month, indicates that more competition is helping to drive down prices.

The Natural Gas Council on Friday warned the ClintonAdministration and Congress of abnormally high natural gas pricesthis winter and requested additional funding for the Low-IncomeHome Energy Assistance Program (LIHEAP) for low-income households.

The Natural Gas Council on Friday warned the ClintonAdministration and Congress of abnormally high natural gas pricesthis winter and requested additional funding for the Low-IncomeHome Energy Assistance Program (LIHEAP) for low-income households.