Wraps

The Federal Energy Regulatory Commission Wednesday generally re-affirmed key earlier decisions on price mitigation measures for California and the West, making minor modifications in a sweeping clean-up order encompassing a number of dockets in its year-and-a-half long battle to subdue the western power crisis.

Murphy Oil Co., lifting a veil of secrecy that has hung over ahot drilling play for a year, told the National Energy Board itexpects to achieve production of up to 310 MMcf/d in northeasternBritish Columbia this year.

While public attention centers on the Arctic, a dramaticdemonstration is under way of the ability of Canada’s near north todeliver new natural gas supplies on a large scale.

Petro-Canada of Calgary completed the largest land acquisitionprogram in its history as part of its focus on Canadian frontiergas and Grand Banks oil production. The company participated inthree land sales and a major farm-in to acquire new explorationacreage in the Mackenzie Delta, located in the NorthwestTerritories; the Flemish Pass Basin, located on the East Coastoffshore Newfoundland; and on the Scotian Shelf, located offshoreNova Scotia. The program adds 2.7 million acres (1.5 million netacres) to Petro-Canada’s land position.

Traders hoping for unsubscribed El Paso capacity to reduceprices at the Southern California Border will be sorelydisappointed because of last week’s announcement that an unnamedshipper signed for 1.2 Bcf/d. The southwestern pipeline said itrecontracted all of its available firm capacity for a minimum of$37.5 million in revenues for 2000. The amount reflects an increaseof 7% over the annual average revenues generated from the Dynegydeal over the past two years. Dynegy paid $70 million for 1.3Bcf/d.

While FERC’s regulatory gas options paper so far has been kepttightly under wraps, Commissioner Curt L. Hebert Jr. clearly is nothiding his views on some of the most important issues theCommission will face over the next few years. In an articlepublished in the Energy Law Journal, Hebert begins to tackle thequestion of how the Commission can “develop incentives that willspur the industry to act more competitively.”

The natural gas policy options paper, still officially underwraps at FERC, apparently has blown enough of its cover to piquethe interest of lawmakers on Capitol Hill, and start the war-drumswithin the industry, according to sources.