Look

Texas Railroad Commissioner Charles Matthews yesterday proposedthat the commission look into “all possible solutions” regardingthe high cost of natural gas. Discussions with representatives fromthe exploration and production sector, gas utilities and customergroups had convinced him that the state has to consider long-termsolutions to ensure the gas supply is reliable and affordable.

On the eve of short-term electricity rate increases to bail outthe state’s two major private-sector utilities, California’slegislature opens its 2001 session today with a special concurrentsession called by the governor to develop solutions on an emergencybasis for the state’s continuing electricity supply and pricecrisis. Any measures passed can be effective within 90 days of thegovernor signing them.

A casual observer of the natural gas futures market might lookat the narrow losses in the January contract and the modest gainsin the out months and conclude there was a quiet, post-expirationtrading lull in the Nymex pit Wednesday. December lost 8.5% of itsvalue in its last two trading days, and traders were just easinginto trading January, right? Wrong.

A close look at the status of the nation’s gas resources lastyear reveals a lethargic industry barely able to build reserves.However, last year was an improvement over the year prior. Dry gasreserve additions reversed the 2% decline in 1998 and grew lastyear by 2.1% to 167,406 Bcf in the United States, according to anAdvance Summary: U.S. Crude Oil, Natural Gas and Natural GasLiquids Reserves 1999 Annual Report by the Energy InformationAdministration. Reserve additions replaced 118% of gas production.It was the fifth time in the past six years that reserves havegrown.

A close look at the status of the nation’s gas resources lastyear reveals a lethargic industry barely able to build reserves.However, last year was an improvement over the year prior. Dry gasreserve additions reversed the 2% decline in 1998 and grew lastyear by 2.1% to 167,406 Bcf in the United States, according to anAdvance Summary: U.S. Crude Oil, Natural Gas and Natural GasLiquids Reserves 1999 Annual Report by the Energy InformationAdministration. Reserve additions replaced 118% of gas production.It was the fifth time in the past six years that reserves havegrown.

Fueled by gains in nearby crude oil pit, it was up, up and awayonce again for natural gas futures as traders added to their betsthat the market will experience supply woes this winter. As itturns out, that was more than enough buying to propel natural gasfutures to double gains and the second highest prompt monthsettlement price in the commodity’s 10-year history.

Interstate pipelines will want to be on the look-out for theresults of a model simulation of the New England pipelineinfrastructure that will analyze its potential to supply the”enormous” increase in the demand for natural gas by powergenerators in the region.

Interstate pipelines will want to be on the look-out for a majorstudy that will review the potential of the New England pipelineinfrastructure to supply the “enormous” increase in the demand fornatural gas by power generators in the region.

Natural gas marketers, which hadn’t given the proposedgreenfield Independence Pipeline and SupplyLink expansion a secondlook in the past, have signed up for firm transportation capacityon the controversial Midwest-to-East Coast pipeline projects, withone noting the projects were more appealing this time around. Giventhis support from marketers, sponsors say they now have enoughbinding agreements to meet FERC demands and move forward with theirprojects.