Challenges

A broad coalition of business, government and consumer leaders called on U.S. industrial leaders to take the “10 Percent Pledge” to lower their energy use and costs by 10% to help ease the potential shortfall in natural gas supplies this winter.

Capping off a day-long emergency conference on Thursday called to address a potential crisis in the natural gas markets, Energy Secretary Spencer Abraham told reporters he planned to move quickly on submitting recommendations to President Bush that would soften the impact of a gas supply shortage this summer or next winter.

Independent oil and gas exploration and production companies (E&Ps) still face increasing challenges to reinvest “substantial” capital every year as they seek new reserves to replace current production, according to Moody’s Investors Service. However, analysts because technical and geological risks remain high in mature basins and the deepwater, analysts expect more consolidation, especially among independents.

Focused on its current challenges but positioning itself for recovery, Duke Energy last week announced another cut to its forecasted capital expenditures for 2003 to $3 billion from a previous $3.2 billion. The reduction, said CEO Richard Priory, will ensure financial flexibility and enhance Duke’s cash-positive position for 2003.

Focused on its current challenges but positioning itself for recovery, Duke Energy announced another cut to its forecasted capital expenditures for 2003 to $3 billion from a previous $3.2 billion. The reduction, said CEO Richard Priory, will ensure financial flexibility and enhance its cash positive position for 2003.

FERC Administrative Law Judge (ALJ) Bobbie McCartney last Thursday ruled that power contracts entered into between four power suppliers — Dynegy Power Marketing, El Paso Merchant Energy, Morgan Stanley Capital Group and Sempra Energy Resources — and the California Department of Water Resources (CDWR) during the state’s 2000-2001 energy crisis should be held to a standard that will make it tougher for California to overturn those contracts.

In an effort to bring greater certainty to utilities and power suppliers entering into wholesale power contracts, while at the same time hopefully slashing the amount of litigation that has arisen from those contracts, FERC last Wednesday issued a proposed policy statement that would set a standard of review that must be met in order to justify proposed changes to market-based rate contracts for wholesale sales of electric energy by utilities.

In an effort to keep the country’s citizens informed on the latest happenings in the industry, the Canadian Association of Petroleum Producers (CAPP) said that it has teamed with the Small Explorers and Producers Association of Canada (SEPAC) to create a new, independent center of knowledge about the Canadian oil and gas industry.

The announcement last Tuesday by the North American Electric Reliability Council (NERC) that it is aiming to become the standards-setter for the wholesale power industry puts it on a collision course with the Gas Industry Standards Board (GISB), which already has announced it is expanding into setting standards for power industry business practices (see NGI, Sept. 24).