Major

FERC is scheduled to tackle two major cases today – “alternativemethods” for regulating pipeline facilities on the OuterContinental Shelf (OCS) and Granite State Gas Transmission’sapplication to build an LNG facility in the town of Wells, ME. Italso is expected to vote on the merger of Enova and PacificEnterprises.

As part of a major reorganization plan, the American PetroleumInstitute (API) says it plans to establish a “natural gascomponent” aimed at attracting medium-to-small sized companies asnew members and at retaining current API members.

A major LDC group and a pipeline group urged FERC yesterday tofavorably consider a proposal that would clear the way for gaspipelines and their customers to negotiate the heretofore untouchedarea of terms and conditions of service. The Commission has limitedits approval so far tonegotiation of rates.

Disappointment with the development of retail gas and powermarket competition nationwide prompted another major player toannounce it is rethinking its plans and redirecting marketingefforts. EnergyOne LLC, the 50-50 marketing alliance of UtiliCorpUnited and Peco Energy, is being restructured in order to implementnew joint strategies tailored to deal with “a competitivemarketplace that refuses to show up,” the partners said yesterday.Their announcement follows by only a week Enron’s statement that itis ceasing residential marketing efforts in several states becausecompetition has been so slow to develop.

A major independent producer group has painted a rosy outlookfor short- and long-term growth of domestic gas demand and supply.U.S. gas demand is expected to rise by one percent to 22.23 Tcf in1998, eclipsing the previous consumption peak achieved in 1972, andlikely will hit 23 Tcf in 2000, according to forecasts issued atthe Independent Petroleum Association of America’s (IPAA) Oil andGas Investment Symposium in New York Tuesday.

Frequently faced with sharp criticism from industry and WallStreet for its estimates on everything from supply and demand tonatural gas prices, the Energy Information Administration earlierthis month publicly admitted there were serious errors over morethan a decade in its gas and oil drilling data.

The major accord signed by Canadian gas industry stakeholders lastweek that virtually assures construction of the Alliance Pipelineproject (See GPI Daily, April 9) hasmade the fate of the competing 1.4 Bcf/d Viking Voyageur projectextremely doubtful. Voyageur sponsors TransCanada PipeLines andNorthern States Power were in meetings all day Monday and Tuesday andan announcement is expected later this week. One Voyageur officialsaid all options are possible, including shelving the 800-milepipeline project.

The number of proposed major pipeline projects on schedule forservice in winter 1999 continues to dwindle, with IndependencePipeline telling FERC yesterday it plans to delay service by a yearuntil November 2000. The pipeline’s sponsors said the $678 millionproject will be delayed because of the lengthy construction timerequired. FERC still has not approved the project. Markets for the400-mile pipeline system also have been slow to develop, butsponsors said they recently executed an additional precedentagreement with Eastern Energy Marketing for 99,000 Dth/d of firmtransportation capacity, bringing subscriptions to nearly 70% ofthe pipeline’s 916 MMcf/d capacity.

Three senators from leading energy-producing states unveiled amajor legislative plan Tuesday aimed at shoring up the domestic oiland gas industry in the face of depressed crude oil prices. Themeasure, titled the National Oil and Gas Security Enhancement Plan,seeks to provide producers with regulatory, leasing and tax relief.