Reserved

The renewable-fuel mandate in the Clinton administration’sretail electricity restructuring legislation that was unveiled lastweek may be seen by the natural gas industry as its worst nightmarecome true, but it does have a little bit of a silver lining.Although it sets aside 7.5% of gross annual generation output forrenewable fuel sources, which is at least triple the current level,the full effect of the mandate won’t be felt until the end of thenext decade at the earliest.

With possible national implications, California has proposed astate law that would impose “public goods” surcharges on all gassold for consumption within the state, including gas delivered byseveral proposed federally-regulated interstate pipelines that seekto bypass local distributors and directly serve large industrialcustomers. The fees would support energy efficiency,weatherization, public interest energy research and development,and low-income programs. The proposed change undergoes its firstpublic scrutiny in a legislative committee hearing in Sacramento onApril 19. If passed it is sure to splinter the gas industry betweenintra-and interstate interests.

The D.C. Circuit Court of Appeals has remanded FERC’s rejectionof a 1997 complaint in which Southern California Edison accusedSouthern California Gas (SoCalGas) of gaming the secondary marketfor firm capacity on key transportation links between the low-costSan Juan producing basin and the California border.

Texas Independent Energy, a 50-50 joint venture of PSEG Global of New Jersey and Panda Energy International of Dallas, plans to design, build and operate a third merchant power plant in Texas. This one, to be in Ector County, represents a total investment of about $300 million. The Ector County plant will burn an average of 145 MMcf/d with a peak gas consumption of 170 MMcf/d. Commercial operation is expected by summer 2001.

The Clinton administration’s retail electricity restructuringbill that was unveiled yesterday had some bad and not-so-bad newsfor natural gas. The bad news was that it requires a maximum 7.5%of annual electricity output to be generated by renewable fuelsources, but on the brighter side the full effect won’t be feltuntil the end of the next decade at the earliest.

Anadarko CEO Robert J. Allison Jr. is not alone in predicting asustained oil market recovery now that OPEC has decided it can livewith a little less supply on the market. But unlike most of thesoothsayers attending the Howard Weil Energy Conference in NewOrleans, Allison sees a major turnaround ahead and much greatervolatility than has been present in market cycles of the past.

The D.C. Circuit Court of Appeals has remanded FERC’s rejectionof a 1997 complaint in which Southern California Edison accusedSouthern California Gas (SoCalGas) of gaming the secondary marketfor firm capacity on key transportation links between the low-costSan Juan producing basin and the California border.

Maine and New Hampshire regulators have asked FERC to deferconsideration of a petition for declaratory order that would allowGranite State Gas Transmission to recover millions of dollars inpreliminary development costs for a controversial liquefied naturalgas (LNG) facility in Wells, ME, that’s not even likely to bebuilt.

Unocal Corp.’s Spirit Energy 76 unit announced a “verysignificant” oil and gas discovery on the Mad Dog prospect in theGulf of Mexico deep-water Green Canyon block 826. The wellencountered 300 net feet of hydrocarbons, mainly crude oil. Aspokeswoman said more specific information about how much of MadDog reserves might be gas is not yet available.