Natural

Several producers who blasted El Paso Natural Gas last week in aSection 5 complaint at FERC got an earful right back from thepipeline yesterday. El Paso wasted no time in filing an answer, andin an interview with NGI, A.W. “Al” Clark, El Paso’s vice presidentof marketing and operations control, said this is just another casein which producers are attempting to hide behind FERC because theyare afraid of competition.

In its latest study, the Gas Research Institute (GRI) predictednatural gas will dominate the market share among competing fuelsfor industrial energy demand over the next 15 years. Currently,industrial demand accounts for 45% of all gas consumption. Thestudy, released yesterday, was prepared by the GRI and Energy andEnvironmental Analysis Inc.

The Federal Energy Regulatory Commission has approved theabandonment by Avoca Natural Gas Storage of its unfinished saltcavern storage facility in southwestern New York State. Theabandonment order issued last week follows Avoca’s bankruptcyproceedings and plans for sale of the facility to Northeastern GasCaverns LLC, a New York company.

Fearing excessive linepack over the weekend, Northern NaturalGas implemented a System Underrun Limitation in all market-areazones for the gas days of Saturday and Sunday. The SUL will endtoday.

Following a two day, 18-cent price slide, the natural gasfutures market held its ground yesterday as traders were reluctantto push very far from center ahead of the release of fresh storagedata. The October contract was held to a tight 7-cent tradingrange, finishing 0.1 cents lower at $2.426.

The Federal Energy Regulatory Commission has approved theabandonment by Avoca Natural Gas Storage of its unfinished saltcavern storage facility in southwestern New York State. Theabandonment order issued Monday follows Avoca’s bankruptcyproceedings and plans for sale of the facility to Northeastern GasCaverns LLC, a New York company.

A study of 10 of the largest U.S. natural gas pipelines showsthey can expect to collectively derive a total of $42.5 millionannually in savings from Gas Research Institute technologies over afour-year period from 1997 to 2000, GRI said.

Aggregation of small retail natural gas customers is still alive in California, but barely. And it’s future is dim in the wake of new state legislation (AB 1421) passed earlier this month and now on the governor’s desk. The legislation restricts unbundling in the retail core gas markets (see NGI Sept. 13).

Shippers shot Southern Natural’s proposed rate increase full ofholes last week at FERC. Wholesale and retail marketers, municipaland investor-owned utilities, industrial gas users and gasproducers alike told FERC to deny Sonat’s request that theincreased rates be made effective Oct. 1. There was a unanimouscall for hearings and a suspension of the filing for the fullfive-month period subject to refund.