Startling

In a startling disclosure last week, an aide to Conference Committee Chairman Pete Domenici (R-NM) signaled that the broad-based energy bill being negotiated on Capitol Hill may not be finished this year. While some saw this simply as a negotiating tactic, others said that if headway wasn’t made this week on the remaining contentious items, the bill could be in jeopardy.

Industry merger and acquisition activity yesterday was astartling confirmation of two major trends: the convergence of gasand electricity operations, and consolidation. Two more of thenation’s largest diversified gas pipeline companies were snatchedup by two major energy distributors. Sempra Energy (SRE) bought KNEnergy (KNE) in a stock-and-cash transaction valued in theaggregate at $6 billion, a 24% premium to KNE’s recent stock price,and Dominion Resources bought Consolidated Natural Gas Co. (CNG)for about $6.3 billion in stock, a 25% premium.

Well depletion rates in the Gulf of Mexico have reached astartling 38% this year and within the next three years could reach49%, according to a report by Houston-based Simmons & Co.International.