Dependence

There are dangers down the road in relying solely on naturalgas-fired electricity generation for both companies and consumers,according to Energy Security Analysis Inc. (ESAI) in its NaturalGas Power Alert released last week. The firm said the risk of notdiversifying a portfolio with coal-fired or oil-fired generationgreatly increases the exposure of a company or a state to thevolatile natural gas market.

In an effort to reduce U.S. dependence on foreign oil, Sen. KayBailey Hutchison (R-TX) introduced legislation last week that wouldoffer tax credits to domestic producers of marginal oil and naturalgas wells. Although the credits would not become effective untilthe prices of oil and gas fell significantly, they would provide asort of financial safety net to encourage marginal well producersto reopen shut-in wells in the face of a volatile market.

In an attempt to reduce U.S. dependence on foreign oil, Sen. KayBailey Hutchison (R-TX) introduced legislation yesterday that wouldoffer tax credits to domestic producers of marginal oil and naturalgas wells. Although the credits would not become effective untilthe prices of oil and gas fell significantly, they would providesecurity for marginal well producers facing market uncertainty.

U.S. dependence on Canadian gas has quadrupled since the 1970sand is expected to grow even further over the next decade, butthere’s no danger the country will be to the domestic gas marketwhat the Middle East has come to mean to the U.S. crude oil market,a Canadian pipeline executive said.