Marginal

Canadian exporters suffered a US$1.7 billion revenue hit as marginal volume growth failed to make up for soft prices during the first three quarters of the current natural gas trading year, records of the National Energy Board (NEB) show.

Weighed down by the day-earlier futures loss of nearly 20 cents and with only marginal prospects for further gains in fundamental demand, most of the cash market recorded drops ranging from about a nickel to 20 cents Tuesday. Western points were a bit stronger than the overall market, seeing modest rebounds in the Pacific Northwest and Western Canada and flat to barely lower numbers elsewhere.

In the nearly two years since FERC waived the price ceiling on short-term capacity release transactions, the transportation capacity that was released at above-cap prices accounted for only 2% of all capacity-release deals (including long-term transactions) and 2% of the total release volumes, while the average release rates were never more than $0.03 MMBtu/d higher than what they would have been with prices still capped, according to a FERC staff paper reviewing the waiver pilot program.

Despite only the most marginal firming of weather fundamentals and a softer screen during the morning, nearly all cash points ranged from flat to about a dime higher Tuesday. Most softening was fairly negligible except for double-digit drops at Sumas, Stanfield, Malin and intra-Alberta, which were due largely to cool Pacific Northwest weather, a NOVA tolerance change Sunday to 0/-20% and a constraint on PG&E Gas Transmission-Northwest deliveries (see Transportation Notes).

To encourage drilling of marginal deep-water wells (200 metersand greater) in the Gulf of Mexico, the Minerals Management Service(MMS) has proposed a new rule expanding discretionary royaltyrelief for properties that would otherwise be considereduneconomic.

Customer satisfaction with gas pipeline transportation in NorthAmerica has shown a marginal 2% improvement over the past twoyears, with 30 pipelines achieving a higher ranking while almost anequal amount of pipelines (27) experienced a decline, according toa bi-annual survey released by Mastio &amp Co. last week.