Good

In the view of local distribution companies, standardization canbe a good thing if it streamlines business practices. However,standardization efforts that ignore the uniqueness of individualLDCs, their customers and the states and markets they operate inare unacceptable. LDCs’ view of GISB and its standards is onereason cited for flagging LDC involvement in the standardsorganization.

No news was good news on Monday – at least to the bears – as themarket continued to take back gains registered last week in frantichurricane-related trading. That prompted the October contract todrop 7.3 cents to settle at $2.187 yesterday as traders searchedfor any indication that Hurricane Georges (pronounced ZHORZH) wouldaffect natural gas interests in the Gulf of Mexico.

While gas reserves in the lower-48 states declined slightly lastyear (down 519 Bcf, or 0.3%), gas discoveries shot up 27% “from avery good 1996,” to the highest level in the past decade, theEnergy Information Administration said in an advance summary of astudy titled “U.S. Crude Oil, Natural Gas, and Natural Gas LiquidsReserves 1997 Annual Report.”

What was non-strategic to Union Pacific Resources (UPR) provedto be a good fit with core business for Enron Oil and Gas (EOG).UPR sold its 19% non-operated working interest in the MatagordaIsland Block 623 Field and surrounding blocks to Enron Oil and Gasfor $158 million. The deal will close Aug. 31 with an effectivedate of June 1.

For those interested in the ratings game, this past week was nota good one for natural gas companies as Moody’s Investors Servicedowngraded one natural gas company and Standard & Poor’s puttwo others on CreditWatch with negative implications. All threeremain in the rarefied upper ranks by virtue of the guaranteedreturns that come with their utility operations. But it’s theirincreasing unregulated business that’s making the ratings agenciesnervous.

The recent price spikes and generation outages in the Midwestpower market have opened the door wide for the natural gas industryto capture a greater share of the industrial energy market, says asenior economist.

Giving pipelines the presumption in favor of rolled-in rates mayhave been a good idea a couple of years ago, but CommissionerWilliam Massey says he’s now beginning to have second thoughtsabout that decision.