Optimistic

Even with near record prices for oil and gas, theever-optimistic independent exploration outfits in California’straditionally fossil fuel-rich Kern County are having a hard timenailing down financing to continue exploring.

The first merchant electric generating plant proposed followingindustry restructuring in California more than three years agofinessed a crucial court challenge Tuesday and moved toward aconstruction start-up early next year on a $300-350 million, 700 MWplant on a former Air Force base in the high desert 75 milesnortheast of Los Angeles.

“We were too optimistic,” El Paso admitted in saying that the Belen#1 turbine had gone down again after the pipeline announced Thursdayafternoon it had been repaired (see Daily GPI, March 10). San Juan Crossover capacityremained limited Friday to 630 MMcf/d, 20 MMcf/d below normal. El Pasoexpected to test the Belen turbine for a possible return to serviceSaturday. Maintenance on the Bondad Station’s 2A turbine was completedFriday.

Energy Secretary Bill Richardson has indicated he is “guardedlyoptimistic” about the status of the electric utility industry’spreparedness efforts to deal with computer-related glitches thatmay arise with the arrival of the new millennium.

Oklahoma producers are eyeing the pending purchase of Shellsubsidiary Transok by OGE Energy subsidiary Enogex with cautiouslyoptimistic eyes. While the sale would double Enogex’s pipelineholdings, it’s not clear to Oklahoma market participants whateffect the deal will have on competition.

Oklahoma producers are eyeing the pending purchase of Shell subsidiary Transok by OGE Energy subsidiary Enogex with cautiously optimistic eyes. While the sale would double Enogex’s pipeline holdings, it’s not clear to Oklahoma market participants what effect the deal will have on competition.

Follow-through on the heels of Monday’s Nymex strength gave bulltraders an optimistic outlook early yesterday. However, theireuphoria was short-lived when a combination of fund and localselling pushed the market down near stubborn support at $2.205.June trimmed its losses into the close, finishing 6.6 cents lowerat $2.236.

With a little holiday cheer, the American Gas Association handedout an extremely optimistic 1999 gas consumption forecast last weekas a gift to those whose spirits may be down with gas demand thisChristmas season. The association told those attending its year-endreview conference in Washington, D.C. to expect 5% growth inconsumption in 1999, led by a 13% increase in the residentialsector and a 6.8% jump in the commercial sector. This rosy glow,however, would be fueled by normal weather, something that’s beenin short supply over the past year. Given above normal wintertemperatures next year (10% fewer heating degree days) and severalother negative factors such as $10/bbl oil prices, AGA expects an0.4% drop in gas demand.

A newly released Gas Research Institute study examining theshift in perceptions of the U.S. gas resource base, titled”Changing Perceptions Of Remaining U.S. Conventional GasResources,” discusses how the move — from the shortage mentalityof the 1970s to today’s view that gas is abundantly available –has resulted from an interplay of factors. Factors discussedinclude increased exploration success rates in frontier plays,improved gas well recoveries and continued reserve appreciationactivity in existing fields. GRI, with Energy and EnvironmentalAnalysis Inc. of Arlington, VA, developed the study.