Crisis

California’s energy infrastructure has sufficient upgrades to stave off any repeat of the 2000-2001 crisis through the next two to three years, but failure of federal and state regulatory policy to keep pace casts a lot of uncertainty over the structural advances, according to state energy official and a gas utility executive who spoke to an energy industry conference in San Francisco Friday.

The media spotlight on the natural gas industry has “severely constrained” the industry’s ability to develop new resources and prevent an “imminent supply crisis,” according to a new report by Boston-based Energy Security Analysis Inc. (ESAI) Calling it the “arraignment of the gas industry before the investment community, regulators and the public,” ESAI suggested that the headlines have done more damage to the natural gas industry — and future supplies — than just a few black eyes to a few companies.

The current crisis in the energy trading market largely will have blown over by the time 2003 rolls around, predicted John Olson Wednesday. He is probably best known as the industry analyst who suspected something was rotten in the state of Enron well before anyone else, earning himself an unfavorable reputation in the Enron executive suite prior to the company’s collapse.

The current crisis in the energy trading market largely will have blown over by the time 2003 rolls around, predicted John Olson Wednesday. He is probably best known as the industry analyst who suspected something was rotten in the state of Enron well before anyone else, earning himself an unfavorable reputation in the Enron executive suite prior to the company’s collapse.

California’s energy crisis and the record high gas prices last winter have stalled energy deregulation and competition in retail natural gas markets, according to the latest statistics from the Energy Information Administration (EIA). In contrast to predictions made one year ago by the American Gas Association (AGA) that nearly 50% of the residential gas customers in the nation were, or soon would be able to choose from competing retail suppliers, only about 27% are able to do so today and just 6% are actively participating, according to the EIA data.

California’s energy crisis and the record high gas prices last winter have stalled energy deregulation and competition in retail natural gas markets, according to the latest statistics from the Energy Information Administration (EIA). In contrast to predictions made one year ago by the American Gas Association (AGA) that nearly 50% of the residential gas customers in the nation were, or soon would be able to choose from competing retail suppliers, only about 27% are able to do so today and just 6% are actively participating, according to the EIA data.

In response to the crisis taking place just a few hundred yards away at the World Trade Center and along with every other commodity exchange in the country, the New York Mercantile Exchange indefinitely suspended natural gas futures trading yesterday morning before the opening of the regular open-outcry session at 9:30 (EST). At that time, October futures were called to open just about unchanged from Monday’s $2.392 close. As of press time last night, Nymex had still not made an official announcement as to when it might reopen for trading. However, all three major stock exchanges will be closed today prompting some to suggest Nymex will follow suit.

In the continuing string of unpaid power bills that sits at the heart of California’s lingering electricity crisis, the state association of independent power producers last Wednesday asked the state transmission grid operator, Cal-ISO, to pay up. The nonprofit public benefits organization said that it is “working on it.”

Confirming what the state’s energy crisis made abundantly clear months ago, the California Energy Commission (CEC) staff last week released its final draft report on the state’s natural gas infrastructure, concluding that it is constrained and has caused higher-than-average wholesale gas prices, particularly in the southern half of the state. But the report did not totally rule out market manipulation as a culprit.