Things

Congressional negotiators reached a deal Thursday on a $2.6 trillion budget for fiscal 2006 that would, among other things, clear the way for oil and natural gas drilling on the coastal plain of Alaska’s Arctic National Wildlife Refuge (ANWR).

BP plc’s chief executive said Tuesday that a better-than-expected 1Q2005 earnings increase — up 29% from a year earlier — is a sign of things to come this year as oil and natural gas prices remain high.

In just three years, the energy merchant sector has evolved from an Internet-based, North American-focused Enron-dominated industry into something the new players say is smaller, but better, where success may turn on a telephone call instead of computer screen, and where future business trades will be global instead of regional.

Hailing Thursday’s decision by the California Public Utilities Commission (CPUC) to, among other things, encourage more state access to less expensive Rocky Mountain gas supplies (see Daily GPI, Sept. 3), Kern River announced Friday that Southern California Gas had received approval from the CPUC to provide an additional 50 MMcf/d of capacity at the Kramer Junction receipt point, to be effective with Timely cycle nominations for Saturday’s gas day. “Kern River has fought long and hard to gain access to [SoCal] gas markets for its customers and the first victory is finally here,” the pipeline said. “Although there is still more that needs to be done, SoCal also estimates that it will implement the new North Desert Transmission Zone (NDTZ) allocation methodology before Oct. 1, 2004. In its filing to the CPUC, SoCal defined the NDTZ as being comprised of Topock, North Needles, Southern Trails and Kramer Junction, with a maximum receipt point operational capacity of 1.59 Bcf/d. For the Timely and Evening cycles, SoCal will set the operational capacities at the NDTZ receipt points to the maximum quantities defined in their filing, which for Kramer Junction is 500 MMcf/d.” See the Kern River bulletin board for further details.

FERC last week issued an order allowing Commonwealth Edison Co. (ComEd) to integrate with PJM Interconnection on May 1, but said that it was “extremely troubled” by recent disclosures that the utility’s parent company was scrambling to procure additional capacity for the bi-directional pathway with PJM. FERC has referred the matter to its division of enforcement for a preliminary investigation.

Raymond James’ analysts took away several key things from their 25th Annual Institutional Investors Conference in Florida earlier this month, led by a belief that rising steel prices will significantly impact many areas of the energy business and potentially create a “bottleneck” for activity. However, despite oilfield inflation, bullish exploration and production (E&P) capital budgets still have room to grow.

Raymond James’ analysts took away several key things from their 25th Annual Institutional Investors Conference in Florida last week, led by a belief that rising steel prices will significantly impact many areas of the energy business and potentially create a “bottleneck” for activity. However, despite oilfield inflation, bullish exploration and production (E&P) capital budgets still have room to grow.

Caught between short-term weather/storage bulls and long-term bears betting against another price spike like spring 2003, the natural gas futures market chopped quietly sideways to close out the week.

Looking for a way to turn things around in the difficult energy marketplace, TXU Corp. last week shook up its senior management structure, while at the same time announcing that the company is in the process of reducing officers overall by about 30%. The moves are part of the company’s action plan to cut 2003 costs by a net $250 million from 2002 levels, aimed at streamlining the organization and increasing focus on the operations of its core businesses in North America.