Needed

Forecasters expecting the long standing storage deficit compared to last year’s levels to be wiped out on Wednesday got their wish. With the winter gas futures months holding attractive premiums for storage arbitrage and gas demand apparently reduced because of high winter prices, an unprecedented series of weekly storage injections over the past five weeks has led to a year-to-year surplus for the first time since January 2000.

The problem is not natural gas pipeline capacity going ‘to’California, rather it is a lack of pipelines ‘within’ the state,particularly to power generation plants, that is aggravatingproblems in the state electric power market, according to KevinPetak, director of Energy and Environmental Analysis Inc. (EEA).

The industry-friendly Texas Railroad Commission would do abetter job of determining the fees the energy companies pay intothe state’s Oilfield Cleanup Fund — but it needs to beef up itsrole in regulating pipelines — according to a report by the TexasSunset Advisory Commission. Some of the criticisms noted areexpected to be corrected in pending proposals at TRC.

The industry-friendly Texas Railroad Commission would do abetter job of determining the fees the energy companies pay intothe state’s Oilfield Cleanup Fund — but it needs to beef up itsrole in regulating pipelines — according to a report by the TexasSunset Advisory Commission. Some of the criticisms noted areexpected to be corrected in pending proposals at TRC.

The major explosion on the El Paso Natural Gas system in NewMexico last August was a “major shock” to gas supplies in theSouthwest and placed an “extreme burden” on the region’s pipelinenetwork. Although gas prices in southern California soaredtemporarily, “widespread shortages” were avoided due to a”combination of market adjustments,” such as reliance on gas fromstorage, alternate transportation routing and fuel switching, theEnergy Information Administration said last week.

Duke Energy Field Services (DEFS) is planning on doublingnatural gas processing capacity at its Roggen plant northeast ofDenver because of an increase in gas production. The company willexpand its working capacity from 25 MMcf/d to 55 MMcf/d over thecourse of the next year. Natural gas liquids would rise from 2,100b/d to over 4,300 b/d the company said.

Duke Energy Field Services (DEFS) is planning on doublingnatural gas processing capacity at its Roggen plant northeast ofDenver because of an increase in gas production. The company willexpand its working capacity from 25 MMcf/d to 55 MMcf/d over thecourse of the next year. Natural gas liquids would rise from 2,100b/d to over 4,300 b/d the company said.

A principle that was the cornerstone of FERC’s landmark gasrestructuring rule, Order 636, is absent from Order 888 and is atthe root of many of the reliability problems in the bulk powermarket, say industrial power customers and a utility/marketer.

FERC needs to dust off and review its landmark gas restructuringrule, Order 636, to get to the root of many of the reliabilityproblems in the bulk power market, say industrial power customersand a utility/marketer.