Administration

The Bonneville Power Administration (BPA) has signed up to begintesting 3 KW home fuel cell units which it expects will sweep themarket much like the home computer in just a few years.

Energy Secretary Bill Richardson last week announced the Clintonadministration will allow producers with offshore federal leases topay part of their royalties with oil for a limited time rather thanwith cash. With this action, DOE would draw down the oil oversupplythat has been depressing prices and provide some relief, if onlytemporarily, to small oil and gas producers. Richardson indicatedthe department will announce further initiatives this week to boostlagging oil and gas production in the United States.

Energy Secretary Bill Richardson last week announced the Clintonadministration will allow producers with offshore federal leases topay part of their royalties with oil for a limited time rather thanwith cash. This action would help to draw down the oil oversupplythat has been depressing prices and provide some relief, if onlytemporarily, to small oil and gas producers. Richardson indicatedthe department will disclose further initiatives this week to boostlagging oil and gas production in the United States.

The Energy Information Administration is projecting gas demandin the fourth quarter to be 5%-6% lower than it was in 4Q 1997,which was a colder-than-normal quarter. It sees 8.9% fewer heatingdegree-days this quarter than during the prior year’s period. Allsectors are showing lower gas demand in this quarter, except forelectric utility gas demand, which may hold to levels seen in 4Q1997. Overall natural gas demand growth this year is now projectedto be 2.9% below the 1997 level.

The Energy Information Administration is projecting gas demandin fourth quarter to be 5-6% lower than it was in 4Q97, which was acolder-than-normal quarter. It sees 8.9% fewer heating degree-daysthis quarter than during the prior year’s period. All sectors areshowing lower gas demand in this quarter, except for electricutility gas demand, which may hold to levels seen in 4Q97. Overallnatural gas demand growth this year is now projected to be 2.9%below the 1997 level.

The Energy Information Administration (EIA) in its Annual EnergyOutlook 1999 released Tuesday is forecasting only a gradual 0.8%average annual rise in natural gas wellhead prices through 2020.Prices will go from $2.23/Mcf in 1997 to $2.68 in 23 years later.

The Energy Information Administration has lowered its wellheadprice forecast for the year by several percentage points but saidwellhead prices during the first quarter of 1999 should show a hugeincrease (28%) from average prices during this year’s warm firstquarter.

With bipartisan and administration support, the legislationcrafted by the Wyoming Congressional delegation last week to givecoalbed methane leaseholders and production companies some relieffrom a recent appellate court decision won rapid and unanimousapproval by the Senate Energy Committee on Wednesday. The bill isexpected to be taken up by the full Senate at any time, and thebill’s language is expected to also become part of a manager’samendment to the Interior Department’s appropriations bill, whichmust be approved before the end of the session next month.

Expect weakening prices and slow gas demand growth this year,the Energy Information Administration said last week in a sharpdeparture from earlier forecasts. Its July Short-Term EnergyOutlook is based on first-quarter data that show a “surprising”5.1% decline in industrial gas use compared to the same period in1997, despite a 3.4% increase in industrial output by gas-intensivemanufacturers.