Deficit

The Henry Hub spot price for natural gas will average $4.26/MMBtu over the second half of the year as the working gas inventory deficit relative to last year narrows, the Energy Information Administration (EIA) said in its Short-Term Energy Outlook for July. It expects the spot price to climb next year as the market tightens.

The disputed dollar impacts are sufficiently large and the deficit reduction talks equally intense so a full range of federal energy subsidies need to be debated by Congress and others, according to a white paper issued recently by the Washington DC-based Environmental and Energy Study Institute (EESI) which generally supports renewable energy.

In the wake of oil and gas drilling becoming permissible on state-owned land throughout Ohio, industry supporters are forming the Ohio Shale Coalition (OSC) to tout the economic benefits of developing the Marcellus and Utica shales while also countering the claims of detractors.

Faced with a widening budget deficit that some analysts place above $20 billion in the new year, California Gov. Arnold Schwarzenegger indicated that he is revisiting a proposal to expand offshore drilling in order to generate more than $200 million of revenues. A proposal to open drilling offshore Santa Barbara County early in 2009 was rejected by the State Lands Commission.

Faced with a widening budget deficit that some analysts place above $20 billion, California Gov. Arnold Schwarzenegger is revisiting a proposal to expand offshore drilling in order to generate more than $200 million of revenues. A proposal to open drilling offshore Santa Barbara County earlier this year was rejected by the State Lands Commission (see Daily GPI, Feb. 2).

A tentative deal to close California’s $26 billion budget deficit includes provisions for reopening limited offshore oil drilling along the Santa Barbara coast. A similar compromise for boosting state revenues with the first new drilling in 40 years was rejected last January by the California State Lands Commission, but has been given new life in the budget talks (see Daily GPI, Feb. 2).

There is the potential for new natural gas supplies as part of the deal being worked out to resolve California’s $26 billion budget deficit (see Daily GPI, July 23), a Houston-based spokesperson for Plains Exploration and Production Co. (PXP) told NGI Thursday. PXP is in line to be the developer of the first new offshore drilling along the California coast in 40 years.

In the midst of a $42 billion budget deficit, California Gov. Arnold Schwarzenegger has revived a proposal to consolidate the state’s major energy agencies into one energy department as an efficiency measure. A similar proposal was kicked around four years ago only to be shot down by lawmakers.

With California facing a $42 billion budget deficit, the state’s year-old law (AB 118) to boost alternative fuel vehicles may be stalled.