Tunnel

Long-suffering Rockies producers are seeing the light at the end of the basis tunnel as the landmark Rockies Express Pipeline LLC (REX) wends its way eastward. But what the industry has yet to open its eyes to is the trouble brewing down South, says an industry analyst.

Just when it was expecting to see the light at the end of a long tunnel, Millennium Pipeline suffered another setback last week. Although it was able to come to an agreement with the city of Mount Vernon, NY, over a key routing issue, setting the stage for a final green light from FERC after five years of review, pipeline officials ran into trouble pushing the New York State Department’s (DOS) Division of Coastal Resources for a final decision on its route through sensitive Haverstraw Bay on the Hudson River.

After watching July prices tunnel lower into expiration Wednesday, natural gas traders were content to take a breather yesterday, choosing to wait for new fundamental or technical clues instead of blindly reestablishing a position in August futures. As a result, the new prompt month had a hard time getting out of its own way, sifting sideways to close a scant 0.6 cents lower at $3.28.

Participants report there is definitely light at the end of thewinding tunnel that has encapsulated California’s troubledelectricity market, but the question Wednesday was whether it wasthe result of a temporary power surge or light from the opening ofbroader, longer term solutions that include fixing the market,persistent supply shortages, beleaguered generators andcash-starved utilities.

Some major U.S. independent producers absorbed major blows tothe bottom line in the first quarter of 1999, but CEOs from thecompanies insist higher profits are right around the corner.

Some major U.S. independent producers absorbed major blows tothe bottom line in the first quarter of 1999, but CEOs from thecompanies insist higher profits are right around the corner.