Alarm

Although U.S. Energy Secretary Bill Richardson has been soundingthe alarm all over the country about problems with the nation’selectric reliability because of at least six power outages thatoccurred last summer, several utility executives told the secretarylast week at a regional “summit meeting” in Newark, NJ, that theyare ready and waiting for the next summer demand peak.

While no one is ringing the alarm bell and shouting about asupply crunch, near-term Gulf of Mexico gas supplies are expectedby many to suffer from depletions and diminished drilling due tolow prices.

Inadequate reserve replacement last year should set off an alarmin the gas industry given continuing increases in gas demand,according to a new report by Arthur Andersen and John S. HeroldInc. Proved domestic gas reserves were essentially unchanged in1997 despite a 24% increase in extensions and discoveries to 10.1Tcf, the highest level of drillbit gas reserve additions in thefive-year study period, according to the study titled U.S. UpstreamPerformance Trends. The study noted, however, that negative reserverevisions of 1 Tcf, including a 623 Bcf downward revision by EEXCorp. and smaller downward revisions by Amoco, Mobil and PioneerNatural Resources, are included in the figures.