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State regulators and consumer advocates expressed deep concernover high gas prices last week at the winter committee meetings ofthe National Association of Regulatory Utility Commissioners inWashington, D.C. But industry officials said record drillingefforts will eventually solve the problem and already may be havingan impact.

State regulators and consumer advocates expressed deep concernover gas prices yesterday at the winter committee meetings of theNational Association of Regulatory Utility Commissioners inWashington, D.C. But industry officials expressed guarded optimismabout supply and pointed to recent price decreases and drillingefforts as evidence the situation is improving.

A threatened shut-in of 250 MMcf/d or more of deep-water gasproduction connected to Southern Natural Gas Co.’s system wasaverted — at least temporarily — as the owners of keyprocessing facilities in Louisiana last Thursday re-started some oftheir operations to satisfy the long-line pipeline, which claimedthe production fell short of its specifications for delivery. Theproducers, however, said their gas more than met Southern Natural’squality specs, and that they were being unfairly held to a higherstandard than other shippers on the pipeline’s system.

Except for the deep-water Gulf of Mexico, major producers haveessentially “thrown in the towel” in the U.S. oil and gas marketand are traipsing overseas to find their fortunes, a top executivewith The Coastal Corp. said last week. As a result, he believesmost of the burden to supply a 30 Tcf natural gas market in theUnited States will fall to independent producers.

Except for the deep-water Gulf of Mexico, major producers haveessentially “thrown in the towel” in the U.S. oil and gas marketand are traipsing overseas to find their fortunes, a top executivewith The Coastal Corp. said yesterday. As a result, he believesmost of the burden to supply a 30 Tcf natural gas market will fallto the independent producers.

El Paso Energy yesterday announced subsidiaries would developits interest in the Prince prospect, installing a multi-purposetension leg platform (TLP), in the Ewing Bank Block 958 unit in theGulf of Mexico.

A winter storm sweeping through the South, along with freezingtemperatures expected to last through the weekend in much of theU.S. from the Rockies eastward, resulted in rising prices at nearlyall points Friday.

In an effort to increase their access to deep-water gas, TheCoastal Corp. announced last week that subsidiaries of ANR Pipelineentered in a series of agreements under which they collectivelyhave become joint owners in a new holding company, DeepwaterHoldings L.L.C. The financial terms were not disclosed.

Former FERC Chairman Martin L. Allday has expressed “deepconcern” about the Commission’s proposals to lift the price cap onshort-term capacity and to negotiate terms and conditions oftransportation service, saying they could threaten the successstory of Order 636. Allday’s Commission was the architect of therule that led to the restructuring of the natural gas industry.