Tried

With the clock ticking down to election day, Alaska Gov. Sarah Palin last week tried to capture the vote of producers and other proponents of onshore and offshore drilling, saying that a McCain administration would support a policy of “drill here and drill now.”

The upward enthusiasm of Tuesday quickly dissipated Wednesday as traders reverted to tried and true seasonal spread trading. April futures fell 10.6 cents to $7.366 and May eased 9.7 cents to $7.491 as funds and managed accounts bought May contracts and at the same time sold April and also bought January and sold October.

In the government’s highest profile case targeting false energy price reporting, a former Dynegy Inc. trader and a former El Paso Corp. trader are being tried this week in Houston on charges that they reported bogus transactions to industry publications. The case, which culminates more than three years of work by the government, is being closely watched because it’s believed to be the first time the Depression-era Commodity Exchange Act has been used against a member of the energy industry in a criminal court.

The Gulf of Mexico’s (GOM) oil and gas platforms, pipelines and processing facilities will never be hurricane-proof, but the energy industry has tried to do as much as it can as it prepares for the inevitable storms this summer. After the record-breaking 27 storms last year, companies are trying to leave nothing to chance.

Defense lawyers on Thursday tried to chip away at the credibility of Paula Rieker, Enron Corp.’s former corporate secretary, as the trial of Enron founder Kenneth Lay and ex-CEO Jeffrey Skilling ended its fourth week. Despite a day-long grilling by the defense team, Rieker remained composed, carefully answering questions and correcting remarks she thought were misleading. The trial resumes on Monday in U.S. District Court in Houston.

Former Enron Corp. Chairman Kenneth Lay and CEO Jeffrey Skilling tried once again Wednesday to delay their trial, which is set to begin on Monday. The two men’s legal teams requested that the pending trial be delayed until the 5th U.S. Circuit Court of Appeals considers a request to move the trial out of Houston.

The long-standing “phantom tax” issue that Oregon lawmakers tried to fix this year (Senate Bill 408) prompted a 29-page opinion last Tuesday from state Attorney General Hardy Myers, giving state regulators broad authority to make annual adjustments to keep the tax payment collection component of rates consistent with what each private-sector utility pays for a given year. Consumer groups and utilities are promoting different implementation approaches.

Three times on Tuesday, the natural gas futures market tried to rally above Monday’s spike high, but each time the market fell short, opening the door for commercial and local traders to punish the market lower. Selling was also seen from selected fund traders who view the market as overvalued from a fundamental perspective.

A lawyer for a California-based power supplier said last Wednesday that Nevada Power and affiliate Sierra Pacific Power Co., which are seeking to reform electric contracts negotiated at the height of the western energy crisis, have only themselves to blame for the above-market contract arrangements with which they now are saddled.