Shot

Aquila affiliate Red Lake Gas Storage LP took it on the chin at FERC Wednesday. Not only did the Commission reject its plea for market-based rate authority for a proposed salt cavern natural gas storage facility in Mohave County, AZ, it terminated the entire proceeding.

In what might have been a bit of “irrational exuberance,” natural gas futures shot higher Wednesday following Federal Reserve Chairman Alan Greenspan’s testimony before the Joint Economic Committee in which he expressed concern over high natural gas prices and tight supplies. Local traders led the rally at Nymex, which propelled the June contract to a $6.33 early afternoon high. Although light profit-taking was seen ahead of the close, the losses were minimal, leaving June to finish with an impressive 14.2-cent gain at $6.198.

El Paso Natural Gas has decided to take another stab at expanding its constrained Bondad system. It has asked FERC for the green light to undertake a mainline compression upgrade to add up to 140,000 Mcf/d of firm transportation capacity on the system, bringing total capacity to 725,500 Mcf/d.

El Paso Natural Gas has decided to take another stab at expanding its constrained Bondad system. It has asked FERC for the green light to undertake a mainline compression upgrade to add up to 140,000 Mcf/d of firm transportation capacity on the system, bringing total capacity to 725,500 Mcf/d.

Retail markets and the energy service sector aren’t dead by a long shot, despite perceptions by many energy industry observers to the contrary, according to a couple of industry participants in the West. Although its year-end 2002 financial report is still a month away, San Diego-based Sempra Energy’s retail energy services company is expecting to announce a year of solid growth, according to Bob Dickerman, president of Sempra Energy Solutions, who is unabashedly bullish on the retail sector.

Shrugging off medium-range forecasts calling for moderating temperatures, natural gas futures shot to new 22-month highs Wednesday as traders bid the market up in sympathy with stronger cash market prices and ahead of bullish storage data due out Thursday morning. Locals sold on the higher opening, but were then quickly forced to cover their sales as the market continued higher. New longs added to the buying frenzy and the prompt month gained 25 cents in 65 minutes to reach a $5.74 high at 11:30 a.m. EDT. February closed at $5.673, up 24 cents for the session.

Boosted by the reformation of Tropical Storm Lili in the Caribbean, natural gas futures shot higher Friday as traders continued to cover shorts ahead of the weekend. Notching a 15.2-cent gain to close at $4.041, November becomes the first prompt natural gas contract to trade above $4.00 since June 2001 when the July contract was leading the market off its $10.10 high.

Fueled by a rash of disclosures about questionable energy trading practices, Sen. Dianne Feinstein (D-CA) last week offered modified stand-alone legislation that seeks to bring over-the-counter (OTC) energy and metals derivatives traded over private electronic exchanges under the oversight umbrella of the Commodity Futures Exchange Commission (CFTC).

The U.S. Senate last Thursday shot down a bid by Sen. Jon Kyl (R-AZ) to eliminate a Democrat-backed federal requirement included in the omnibus energy bill (S. 517) that electric utilities generate 10% of their electricity using renewable energy fuels, such as solar energy, biomass and wind.