Increased

While the real price of other goods and services in the U.S.increased by 34% since 1987, the price of natural gas to consumershas decreased by an average 14%, from 1987 to 1997, according to areport used by the American Gas Association to show FERC thatretail unbundling is working. The distributors’ group told afederal/state regulatory policy conference Thursday the price toconsumers went from an average $4.47/Mcf in 1987 to $3.85 in 1997(all in 1997 $). Of that delivered price the total transportationand distribution cost to consumers went from $2.23 to $1.53, a 31%decline, AGA said, citing surveys by the Energy InformationAdministration. During the same period the wellhead price wentfrom $2.24 (in 1997 $) to $2.32 in 1997.

After being limited to a moribund 2.5-cent range Wednesday, theMarch futures contract snapped back to life yesterday as bulls andbears took turns exerting their influence on the market, which ledto a 7.5-cent trading range. Thursday’s 3-cent setback andsubsequent $1.746 settle would be considered an almost non-eventamid typical winter volatility, but the move was a welcome changeto traders who have grown weary of the slight moves and tighttrading ranges over the past month. Those traders reactedaccordingly, burgeoning estimated volume to 86,227.

Thanks to a strong fourth quarter, San Francisco-based PG&ampECorp. earnings increased slightly in 1998, mainly due toimprovements in its nonutility operations, particularly in theelectricity businesses. Merchant natural gas operations lost moneyoverall because of Texas operations that continued to operate inthe red.

Thanks to a strong fourth quarter, San Francisco-based PG&ECorp. earnings increased slightly in 1998, mainly due toimprovements in its nonutility operations, particularly in theelectricity businesses. Merchant natural gas operations lost moneyoverall because of Texas operations that continued to operate inthe red.

Citing the need to accommodate increased Canadian gas suppliesflowing into the Midwest, the sponsors of Independence Pipeline andSupplyLink have urged FERC to promptly issue preliminarydeterminations (PDs) on the non-environmental aspects of theirpipeline projects.

Moving right along on the road to increased Canadian productionand exports, the provincial government in British Columbia hastaken the first step toward removing regulatory roadblocks bycreating a single agency to deal with the oil and gas industry andlocating it in producer territory. The B.C. government alsoanounced it has made peace with native communities on behalf of theindustry.

Unocal Corp. said lower oil and gas prices, coupled withincreased exploration costs because of several dry holes, led tolower third quarter earnings of $36 million, or 15 cents per share,compared with $177 million, or 70 cents/share in the third quarterof 1997. Earnings from continuing operations, excluding specialitems, were $4 million, or 2 cents per share, compared with $94million, or 38 cents per share in 3Q97. Total revenues for thethird quarter were $1.4 billion, about the same as a year ago.Capital expenditures were $502 million, up from $308 million in thesame period of 1997.

If environmental groups and landowners somehow got the idea thatthrough their increased activities at FERC their influence wasgrowing, perhaps they should think again.

A pipeline-commissioned study that says the producer share ofthe offshore pipeline industry is on the upswing and that increasedrate and tariff flexibility from FERC largely are responsible forthe phenomenon drew the wrath of producers last week.