Issue

In an emergency request filed Wednesday, Pacific Gas andElectric (PG&E) delivered a strongly-worded ultimatum to FERC -either revoke the authority for sellers to charge market-basedrates in the out-of-control California bulk power market and takeother actions by “no later than the close of business on Dec. 21,”or it will seek relief from the D.C. Circuit Court of Appeals inWashington. At press time Thursday, the Commission had notresponded to the utility’s demands.

There appears to be one issue that Republicans and Democrats onCapitol Hill can agree on — gas prices are too high. ChairmanFrank H. Murkowski (R-AK) of the Senate Energy Committee andRanking Minority Member Jeff Bingaman (D-NM) have called for anoversight hearing to look into rising natural gas prices.

The Colorado Oil and Gas Commission says the state will issuemore than 1,400 permits for oil and gas drilling before the end ofthis year. In Wyoming, coal bed methane production has never beenmore active. The Rockies haven’t seen this much exploration sinceLewis and Clark were here. Today, the interest is underground, ascompanies map strategies to tap energy reserves.

With a bid of C$97.8 million, a 50-50 consortium of BP CanadaEnergy Co. and Anadarko Canada Corp. was the top bidder last weekfor one of eight exploration licenses off energy rich Nova Scotia,in an area about 60 miles east of the prolific Sable Island naturalgas field off the East Coast of Canada.

With a bid of C$97.8 million, a 50-50 consortium of BP CanadaEnergy Co. and Anadarko Canada Corp. was the top bidder last weekfor one of eight exploration licenses off energy rich Nova Scotia,in an area about 60 miles east of the prolific Sable Island naturalgas field off the east coast of Canada.

The soaring gas market continues to claim casualties amongindustrial end-users. The ammonia, urea and methanol industries,just to name a few that require significant amounts of natural gasfor production, are on the verge of being crippled because of highfeedstock costs and continuing poor sales prices in the domesticand international markets.

Wisconsin Gas fired back at the latest ANR challenge to theGuardian Pipeline project to serve the Wisconsin market. The companytook issue with an ANR press release of last week (see Daily GPI, Feb. 15). The release challenged Guardianto release detailed information about its costs and rates and said theproject was not competitive with alternatives following a presentationto a state business group.

Reflecting the spread of East Coast chill further south, FloridaGas Transmission became the latest pipe to issue an OFO Friday.Citing significant market-area demand, FGT declared an OverageAlert Day notice for the system east of Station 12 in the FloridaPanhandle. It carried a 6% tolerance for negative daily imbalances.The pipeline also said it began maintenance Friday at Station 13.Until further notice the work will limit market-area deliveries to1.43 Bcf/d. Due to customer sourcing patterns having its SouthTexas, East Texas and M-1 (24-inch line) zones scheduled close tocapacity, Texas Eastern said Friday it is allowing due-shipperimbalance gas to be taken in those segments. All other servicepoints remain closed for taking due-shipper imbalances, Tetco said.

Y2K was not an issue yesterday for traders in the natural gaspit at the New York Mercantile Exchange as they seamlessly made theswitch from the December 1999 contract to the January 2000contract. They did, however, have some unfinished business to takecare of. After opening at $2.33, January rumbled 9 cents higher tofill in the chart gap created by December, between the Nov. 19 lowof $2.39 and the Nov. 22 high of $2.35. But before any talk of asustained rally could circulate-bears, armed with fresh forecastscalling for above-normal temperatures-were successful in all butcompletely erasing those early morning gains. At the closing bellthe January contract was up just 2.2 cents to finish at $2.352.