Dictating

Politics will be dictating much of what happens to the nation’s natural gas supplies in 2006 and beyond, according to veteran industry analyst John Olson. For instance, politics — rather than economics — will largely dictate whether the country gets a gas pipeline from Alaska, whether the Arctic National Wildlife Refuge is opened to exploration, and whether there will be LNG receipt terminals on either the West or East coasts or both.

With new outlets to markets the Canadian natural gas industry ismoving into a new stage with higher prices dictating a change inthe priorities of doing business.

While it fights with the Oklahoma Corporation Commission (OCC)over an order dictating the upstream unbundling of its system,Oklahoma Natural Gas (ONG) is arguing with the City of Norman, OK,to retain rights to distribute gas there. ONG’s 25-year franchiseagreement with Norman expires Nov. 15, and so far the two partieshave yet to come to terms on an extension. The city wants afranchise agreement with ONG just like its last one, including aprovision allowing the city the opportunity to buy the distributionsystem from ONG every five years. ONG, however, wants to do awaywith the buyout provision this time around. ONG spokesman DonSherry said the city’s interest in owning the system stems, inpart, from a desire to beef up city coffers. “Our feeling about itis that their interest in a forced acquisition of the system isprincipally one of revenue. We have significant questions as towhether they could operate the system any more efficiently than wecould.”