Hitting

In signing the 1,724-page 2005 Energy Policy Act into law on Monday as oil futures prices were hitting a new all-time high, President Bush conceded it would do little in the short term to bring down energy prices. However, the oil, gas and power industries will see immediate changes in regulation and in incentives to boost supply and reduce demand, which should in the long term lead to lower prices.

With petroleum futures climbing on expected July 4th holiday demand and the possibility of a significant storm hitting the Gulf of Mexico early this week, natural gas futures traders on Friday weren’t taking any chances. Halting the recent slide in prices, August natural gas futures rebounded higher in shortened trading Friday, crossing back above the $7.00 level to settle at $7.171, up 19 cents on the day, but 24.1 cents lower than August’s previous Friday settle.

The Quoddy Bay liquefied natural gas (LNG) project in Maine apparently still has some life left despite hitting a major road block in March when the Town of Perry rejected a terminal location on Gleason Cove (see Daily GPI, March 30). Project planners have negotiated a new deal with the Passamaquoddy Native American tribe for an alternative site on tribal land at a place called Split Rock on the Pleasant Point reservation.

After hitting its head on a $7.85 ceiling Monday, May natural gas futures used the afternoon to probe for support. The prompt month ended the day down 15.5 cents at $7.594, just a few cents shy of Monday’s $7.56 low.

As some early spring storms were hitting the parched Pacific Northwest, the California Independent System Operator (CAISO) last week released its official summer electrical assessment, predicting sufficient supplies unless a 1-in-10-year excessive heat situation is encountered, and then the areas in the southern half of the state could turn up about 2,000 MW short in peak-demand situations. In addition to the vulnerability to an extreme hot spell, the southern parts of the state have less tolerance for a string of unplanned plant outages.

El Paso Corp. said last week that it intends to get out of all its noncore businesses and pay down debt quicker in hopes of hitting net income of up to $750 million in 2006. The announcement Thursday followed news earlier in the week that the company had a net loss of more than $1 billion last year.

The biggest challenges facing El Paso Corp. in 2005 will be hitting a $2 billion debt reduction target, getting its cost structure under control after more than $4 billion in asset sales over the last couple of years and turning around its exploration and production (E&P) business, CEO Doug L. Foshee told analysts at the UBS 2005 Natural Gas and Electric Utilities Conference on Wednesday.

The biggest challenges facing El Paso Corp. in 2005 will be hitting a $2 billion debt reduction target, getting its cost structure under control after more than $4 billion in asset sales over the last couple of years and turning around its exploration and production (E&P) business, CEO Doug L. Foshee told analysts at the UBS 2005 Natural Gas and Electric Utilities Conference on Wednesday.

The proposed Sempra Energy-Shell joint venture North Baja, Mexico, liquefied natural gas (LNG) project has the best chance among current ones proposed in Mexico to actually come to fruition, but even it still faces some major questions, according to a U. S.-based expert monitoring energy developments in Mexico.