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Colder than last year wasn’t quite cold enough for a number ofLDCs reporting first quarter earnings. While temperatures duringthe first three months of the year were down, earnings weren’t ashigh as they could have been had winter weather been more normal.

In a major clarification of policy, the Federal EnergyRegulatory Commission last week decided it wasn’t necessary toaddress the merits of each objection before approving contestedpipeline rate settlements. Instead, it said settlements could becertified based on the reasonableness of the overall package.

In a major clarification of policy, FERC decided it wasn’tnecessary to address the merits of each objection before approvingcontested pipeline rate settlements. Instead, it said settlementscould be ratified based on the reasonableness of the overallpackage. The policy adjustment was reflected in a rehearing orderthat approved a rate settlement between Trailblazer Pipeline andits customers as being “reasonable as a package” for consentingparties, yet at the same time severed contesting parties, AmocoProduction and Amoco Energy. The action cleared the way forconsenting parties to maintain the benefits of their settlementbargain while giving the Amoco affiliates a chance to litigate the”complex factual issues” that they raised [RP97-408-006].

Six inches of snow in New York wasn’t enough to convince futurestraders to resume the up-trend the American Gas Association storagereport so thoroughly wiped out last week. The April contract movedsharply lower for the third session in a row, closing down 4.2cents to $1.717. Shortly before the close, the contract broke belowwhat was deemed a key support level at $1.70 to post a low of$1.695 for the day. The $1.755 high was reached just after theopening bell.

As the winter that wasn’t winds down, gas in storage will haveto come out like a lion during March if capacity holders are tomeet cycling requirements. Even if temperatures remain warmer thannormal the market should expect six weeks of relatively strongwithdrawals because many storage capacity owners must bring levelsdown to about 25% full.

It wasn’t long ago that producers bemoaned sky-high offshore rigday rates and said a turnaround in climbing rates was needed toprevent harm to the industry. Well, that turnaround seems to beunderway.

A staff team of the Federal Energy Regulatory Commission said itfound no “direct evidence” that market manipulation contributed tothe spike in electricity prices in the Midwest market last June,but it did uncover some questionable practices. Moreover, itconcluded that the pricing turmoil was a rare event that wouldn’tlikely occur again.

Shell Oil has become a significant player in the midstream gasbusiness, but this wasn’t always so. While the company heldmidstream gas assets, they were operated as an adjunct to its oilbusiness. That was until deregulation and new market entrantssuggested to Shell it ought to get into the midstream.

Central Gulf of Mexico Lease Sale 169 wasn’t a record, unlikethe last few lease sales, but heavy bidding seems to indicate lowcrude oil prices have not affected the industry’s aggressivedrilling plans. The U.S. Department of the Interior’s MineralsManagement Service (MMS) reported receiving 1,188 bids on 794tracts offered Wednesday. A total of 87 companies participated inthe sale. All bids totaled nearly $1.35 billion, and high bidstotaled more than $810.4 million. Of 4,180 tracts offered, 794received bids with an average of 1.5 bids per tract. By comparison,Central Gulf Sale 166, which took place a year ago, generated morethan $824 million in high bids but on more tracts. Then, 1,032tracts received bids of 5,059 offered.