Over

Funding for the Low Income Home Energy Assistance Program(LIHEAP) is up in the air again with a Senate committeereauthorizing funding through 2004 and a House subcommittee votingto zero out 1999 fiscal year funding for the program. Rallying forLIHEAP’s continuation is the American Gas Association. “Thisunanimous [Senate] committee vote demonstrates the depth of supportthat LIHEAP has in the Senate. In fact, several senators at themarkup expressed their dismay about the House subcommittee actionto eliminate program funding,” said Steve Crout, AGA director ofgovernment relations. “We intend to fight hard to restore the ’99funding for LIHEAP, and today’s action shows that we can count onstrong support from the Senate.”

The Natural Gas Supply Association and Independent PetroleumAssociation of America made their displeasure clear over PresidentBill Clinton’s decision last week to extend a moratorium onoffshore drilling. “Cleaner air and increased use of affordable,clean-burning natural gas depend on access to the large natural gasfields off the nation’s coasts,” said NGSA President Nicholas Bush.”Continuing today’s severe restrictions on offshore natural gasproduction is simply not in the nation’s best interest.”

Sen. Larry Craig (R-ID) confirmed last week that he has sought”some information” from FERC on its natural gas policy optionspaper, saying he was especially concerned that certain proposalscould lead to re-regulation of the gas industry.

The Minerals Management Service (MMS) report’s conclusion that amandatory royalty in-kind (RIK) program for royalty collectionwould cost the federal government up to $374 million annually inlost revenues was “deeply flawed,” according to an industry-backedstudy of the agency’s analysis.

The battle over the next gas distribution frontier is continuingin Maine with the Maine Public Utilities Commission (MPUC) grantingBangor Gas Co. unconditional authority to provide gas distributionservice to five municipalities in the greater Bangor area. BangorGas, a joint venture of Bangor Hydro and Energy Pacific, iscompeting for market share in the area with CMP Natural Gas, ajoint venture of Central Maine Power and New York State Electric& Gas. Both projects are intended to provide new gas serviceonce Maritimes and Northeast comes on line in November 1999.

Texas Eastern Transmission’s proposed settlement professing morethan $260 million in customer savings over the next five to sixyears isn’t all it’s cracked up to be, state regulators and pipeline customers insist.

A rate hike proposal of Northern Natural Gas that has thepotential to cause a showdown at FERC over key policy issues got acool reception last week from Midwest municipals and smalldistributors on Northern’s system.

The cash market made more small gains Wednesday, but downturnsin late trading at many points led sources to believe this week’sprice rally has ended, at least for the time being. Prices ran up3-4 cents at the outset but then came off hard at the tail end inresponse to the screen, said a Gulf Coast trader. As long asfutures stayed up, though, cash stayed right there with them, headded.

Dramatic spot price changes are expected throughout the U.S.over the next two years following the construction of proposedmajor gas pipeline projects and development of gas reserves tosupport them. A new analysis released yesterday at GasMart Power’98, NGI’s annual energy conference, by ICF Kaiser focuses on howprices and volumes would shift following several likelydevelopments: the construction of Alliance Pipeline along withexpansions of Foothills/Northern Border, construction of the Vectorand Millennium projects to move gas from Chicago to East Coastmarkets, completion of the Sable Island project and associatedMaritimes and Northeast Pipeline moving gas down the East Coast andincreased gas production in the Gulf of Mexico.