Thought

If you thought gas prices were high enough already, think again. The nation’s major natural gas producers said they are still struggling to grow gas supply, and their difficulties, combined with the need to refill storage during a slightly warmer than normal summer should drive prices even higher.

Just when producers thought it was safe to head back into the waters of the Gulf of Mexico, Hurricane Lili appeared on the horizon ready to take another big bite out of Gulf gas production. Isidore forced 25 Bcf of gas to be shut in last week, according to the Minerals Management Service (MMS). It looks as though Lili could force a repeat of that situation this week, according to the latest reports from producers.

Gas industry consultant Benjamin Schlesinger, president of Maryland-based Schlesinger and Associates, believes that federal regulators may require all natural gas companies to begin reporting their transactions to FERC in a way similar to what electric companies already do on a quarterly basis. Schlesinger, a 30-year gas industry veteran and former vice president at the American Gas Association, said in an interview that he wouldn’t be surprised at all if FERC issued a notice of proposed rulemaking on the matter sometime between now and December.

The small group of analysts who were thought to be crazy just two months ago when they predicted the gas storage deficit compared to levels last year would be erased in short order, are now proving to be soothsayers. As of last week’s American Gas Association storage report, the deficit level shrank to only 36 Bcf on May 23 from 404 Bcf on March 28.

The small group of analysts who were thought to be crazy just two months ago when they predicted the gas storage deficit compared to levels last year would be erased in short order, are now proving to be soothsayers. As of this week’s American Gas Association storage report, the deficit level shrank to only 36 Bcf on May 23 from 404 Bcf on March 28.

If you thought natural gas prices were volatile last summer, you haven’t seen anything yet, according to Raymond James & Associates. During the peak heat of summer 2001, the company forecasts that gas prices will rise above $6/Mcf, and remain above the $5/Mcf mark in the longer term.

If you thought natural gas prices were volatile last summer, you haven’t seen anything yet, according to Raymond James & Associates. During the peak heat of summer 2001, the company forecasts that gas prices will rise above $6/Mcf, and remain above the $5/Mcf mark in the longer term.

Combustion problems with the #2 engine at ANR’s Grand Chenier (LA) Station are more extensive then originally thought (see Daily GPI, March 21), and the manufacturer has extended its estimate for completion of repairs until mid-April, the pipeline said. Volumes that can be received through Grand Chenier from HIOS and the West Cameron near-shore blocks will continue to be reduced by about MMcf/d until the repairs are finished.

California power end users probably thought they were justhaving another nightmare Monday when the California ISO announcedStage One and Stage Two Electric Emergencies. After all, it’sNovember, not August. However, August apparently left a lastingimpression on the state’s ailing power plants.