Reflective

U.S. natural gas production in 3Q2006 increased 5.5% year over year — an improvement largely reflective of hurricane-related recovery, according to energy analyst John Gerdes. However, Gerdes’ survey also noted 2.2% production growth compared to 2Q2006, suggesting that overall, domestic gas production may rise about 2% this year, or 1 Bcf/d.

The less-than-sensational first quarter earnings reported byPacific Enterprises, holding company of Southern California Gas,were reflective of the thinner margins that have so farcharacterized the transition to restructured energy markets fornatural gas and electricity. In brief, the regulated utility isproducing all of the earnings; the unregulated businesses are stillproducing only red ink.