Daily GPI

Officials at the Interstate Natural Gas Association of Americasay they have no problem with new pipeline safety legislation andincreased regulatory scrutiny stemming from a recent pipelineaccident that caused the deaths of 12 campers in New Mexico.

Pacific Gas & Electric, projecting above-target linepacktoday through Sunday, issued a customer-specific OFO effectivetoday until further notice.

Despite snow in Calgary and modest disruptions of Gulf of Mexicosupplies by Tropical Storm Helene, nearly all points softened a bitThursday, with most of the declines less than a dime. Californianumbers took the biggest hits of more than 20 cents, while tradersof Canadian gas at Aeco, Sumas and Stanfield saw flat to slightlyhigher pricing.

Pressured lower by weaker crude oil futures along with a saggingphysical market, natural gas at the New York Mercantile Exchangewas softer Thursday with buyers on the sidelines, unwilling to addto their already hefty longs. After chopping lower for most of thesession the October contract received a late boost on renewedhurricane fears. However those late gains were more than offset byearly losses and that left the prompt month in negative territory,off 3.1 cents at $5.287 at the close yesterday.

“Justice has been delayed far too long,” producer/shippers saidin petitioning FERC yesterday for expedited resolution of theircomplaint against “El Paso’s unjust and unreasonable pro ratacapacity allocation and scheduling procedures.”

Evergreen Resources, the largest producer in the Raton Basin ofColorado, got a lot larger yesterday. The company bought 153 Bcf ofcoal-bed methane reserves in the basin from a subsidiary of KansasCity Power & Light for $176 million, or about $1.15/Mcf.

What type of reserves cost comparatively little money toproduce, a few days to complete, have years of production growth inareas once thought to be depleted and offer nearly instant success?If you were thinking coal-bed methane wells, collect your $200 andadvance to Go.

A close look at the status of the nation’s gas resources lastyear reveals a lethargic industry barely able to build reserves.However, last year was an improvement over the year prior. Dry gasreserve additions reversed the 2% decline in 1998 and grew lastyear by 2.1% to 167,406 Bcf in the United States, according to anAdvance Summary: U.S. Crude Oil, Natural Gas and Natural GasLiquids Reserves 1999 Annual Report by the Energy InformationAdministration. Reserve additions replaced 118% of gas production.It was the fifth time in the past six years that reserves havegrown.

Horace Greeley’s advice to “go west, young man,” has never beenmore true than for independent North American oil and gascompanies, which are claiming stakes in the Rocky Mountains andreaping huge returns from the untapped natural gas reserves thatlie beneath the deep, thick sands in the mountainous, multi-stateregion.