Running

Development of clean coal and Arctic oil and gas are running high on the Bush Administration’s list, according to FY 2002 budget proposals released Monday and weekend statements by Vice President Dick Cheney.

With its system running full through most of last year, PG&EGas Transmission Northwest (GTN) doesn’t need to read the tealeaves to determine it’s time to expand. The pipeline announced anopen season beginning yesterday for a 200 MMcf/d capacityexpansion.

The gas price projections of the ever-bullish analysts atRaymond James and Associates’ are going up in $1.25 incrementsthese days. The company boosted its Henry Hub price forecast to$5.75/Mcf for 2001 from $4.50 in reaction to what it called a”looming crisis” in the gas market. The increase puts RaymondJames’ forecast a whopping $1.62/Mcf more than the Wall Streetconsensus, according to First Call, but still about a quarter shyof the 12-month futures strip.

FERC last week gave a preliminary nod to Questar Pipeline’sapplication to build a 75.6-mile, 272,000 Dth/d pipeline looprunning from northeastern Utah to the north central part of thestate. The proposed facilities would transport to western marketsthe growing coal-seam natural gas production near Price, UT, andthe volumes delivered to Questar from Colorado Interstate Gas’sUinta Basin Lateral at Natural Buttes.

FERC yesterday gave a preliminary nod to Questar Pipeline’sapplication to build a 75.6-mile, 272,000 Dth/d pipeline looprunning from northeastern Utah to the north central part of thestate. The proposed facilities would transport to western marketsthe growing coal-seam natural gas production near Price, UT, andthe volumes delivered to Questar from Colorado Interstate Gas’sUinta Basin Lateral at Natural Buttes.

The Department of Transportation’s Office of Pipeline Safety(OPS) yesterday gave El Paso Natural Gas the go-ahead to restoreservice to its Line 1110 from Keystone Station through the PecosRiver Compressor Station in southeast New Mexico at restrictedlevels.

This week’s cash market rally apparently was running out ofsteam Wednesday. Eastern points were mostly flat, with a fewNortheast citygates dropping about a nickel. And except forisolated San Juan Basin and Malin gains, the West ranged from flatto more than a dime lower.

In the wake of California’s latest round of electricity priceand supply shock concentrated in San Diego, some of the state’smajor energy industry participants have raised the level ofinterest in forward markets and hedging. San Diego Gas and ElectricCo., in particular, has been second guessed about why it did notuse available hedging instruments through the state’s nonprofitpower exchange to help ease the impact of recent wholesale pricespikes on its retail customers.

Prospects for Arctic natural gas development in both Alaska andCanada’s Northwest Territories are running at their strongest sincethe dawn of the idea three decades ago, but how it will happenremains up in the air.