Shortage

The IPAA’s Supply and Demand Committee said a rig and drilling workforce shortage is seriously hindering a supply response to soaring gas prices, and the problem is likely to continue in 2001.

The IPAA’s Supply and Demand Committee said a rig and drillingworkforce shortage is seriously hindering a supply response tosoaring gas prices, and the problem is likely to continue in 2001.

In the midst of this week’s power alerts exacerbated byCalifornia’s shortage of electric generating capacity, theSacramento Municipal Utility District drew only three responses toa proposal put out for bids early in the summer to have a developerbuild, own and operate a natural gas-fired 500 to 1,000 MWgeneration plant on part of a 2,000-acre site owned by the nation’slargest municipal utility. The earliest the plant would beoperational would be in 2004.

In the midst of this week’s power alerts exacerbated byCalifornia’s shortage of electric generating capacity, theSacramento Municipal Utility District drew only three responses toa proposal put out for bids early in the summer to have a developerbuild, own and operate a natural gas-fired 500 to 1,000 MWgeneration plant on part of a 2,000-acre site owned by the nation’slargest municipal utility. The earliest the plant would beoperational would be in 2004.

In response to national concerns over a possible natural gasshortage this winter, the Oklahoma Corporation Commission has givenproducers with unallocated gas wells in Oklahoma the go-ahead tocontinue their increase in production to the limit.

In response to national concerns over a possible natural gasshortage this winter, the Oklahoma Corporation Commission has givenproducers with unallocated gas wells in Oklahoma the go-ahead tocontinue their increase in production to the limit.

Power reserves were short again yesterday during a continuingheat wave in California, and the state’s independent systemoperator (ISO) had to declare a stage one emergency, meaningreserves were below 7% of expected peak demand, or about 3,000 MW,outages were possible and electricity conservation was a priority.

For the most part, the annual State of the Oil and Gas Industrymeeting of the Texas Railroad Commission in Austin yesterday was alove fest, as producers, operators, association representatives andvarious others lauded the good times and high profits the industryis having.

There was no shortage of hand-wringing and news mediaannouncements in the West in the wake of recent electricity pricespikes and multi-million-dollar estimated consequences fromCalifornia’s relatively modest round of rolling brownouts aroundthe San Francisco Bay Area. The big question — particular inCalifornia — is whether new solutions will come from regulators,lawmakers or the market.