Barely

With the ink barely dry on the new regulations in Mexico for liquefied natural gas (LNG) facility development, Marathon Oil and several partners Monday filed the first application to develop a nearly $1 billion multi-faceted energy complex including a LNG receiving terminal with the Mexican federal Energy Regulatory Commission (CRE). The action vaulted the Marathon project in front of nearby San Diego-based Sempra Energy and another three or four other sponsors of proposed LNG facilities along the Pacific Coast of northern-most Baja, 20-40 miles south of the U.S. border.

While the energy market sailed on past foundering Enron with barely a ripple, that would not have been the case if the major marketer’s implosion had occurred a year earlier during a time of rising energy prices, the chairman of the Maine Public Utilities Commission told a congressional committee Wednesday.

Despite the holiday, storage operators finally opened the floodgates during the first week of the year in response to extremely cold weather, particularly in the Northeast and Southeast. The American Gas Association (AGA) reported a 190 Bcf withdrawal from storage for the week ending Jan. 4, the first withdrawal this season that has exceeded the previous year’s pace.

Despite the holiday, storage operators finally opened the floodgates last week in response to extremely cold weather, particularly in the Northeast and Southeast. The American Gas Association (AGA) reported a 190 Bcf withdrawal from storage, the first withdrawal this season that has exceeded the previous year’s pace. The number far exceeded last year’s 167 Bcf weekly withdrawal and was much bigger than the five-year average for the week of 137 Bcf. But it knocked only a smidgen (23 Bcf) off the year-on-year storage surplus.

With the shadow of one major utility’s bankruptcy barely cast, California Gov. Gray Davis late Monday announced a “memorandum of agreement” with the state’s other major financially wounded investor-owned utility, Southern California Edison Co. in which the state will purchase the Edison transmission grid assets in return for a way out of its credit crunch and back to solvency.

Following closely on Thursday’s minor futures uptick, most cashpoints on Friday barely managed double digit gains in a relativelyquiet day of trading. The Northeast and Midwest took the lead onthe plus side, but the West once again stole the show with declinesof more than $8 at the SoCal Border and more than $2 at PG&ECitygate as power demand declined for the holiday weekend.

Wednesday dawned with a combination of relief and continuingconcern over gas supplies for the northern half of California inthe wake of the federal emergency order expiring at midnightTuesday. The expiration left Pacific Gas and Electric Co. stillscrambling to get its main suppliers to extend current contractsinto the coming weeks and months. State regulators are expected torule today on a PG&E request for emergency supplies fromSouthern California Gas Co., something the latter utility isstrongly opposing.

Time and billions of dollars of credit almost ran out Wednesdayon California’s electricity system, which only barely avoided theneed for rolling blackouts scattered throughout the state but addedto a heightened crisis mentality that is strangling what is left ofthe state’s four-year-old experiment with deregulation.

The nation’s energy spotlight continued to glare unrelentinglyon California’s electricity market as it narrowly avoided the needfor rolling blackouts last week, and now the state’s energyofficials are left holding their collective breath this week,watching weather, supply, price and regulatory indicators.