NGI The Weekly Gas Market Report

Williams last week asked FERC for the go-ahead to build a 1,000 MDth/d interconnect between its Cove Point liquefied natural gas (LNG) terminal in Lusby, MD, and affiliate Transcontinental Gas Pipe Line.

Reps. John Dingell (D-MI) and Henry Waxman (D-CA) last week called on the General Accounting Office (GAO) to undertake an investigation into the White House energy task force in light of the shroud of secrecy surrounding its meetings and participants. They want to know whether the decision to close the task force meetings to the public is a violation of the sunshine laws and the “letter and the spirit” of Federal Advisory Committee Act.

Competition is, for the most part, flourishing in New York’s electricity markets, but significant levels of new generation will need to be added to the state’s system in the near future in order for New Yorkers to avoid incurring higher electricity prices, according to a report recently issued by Dr. David Patton, market adviser to the New York independent system operator (NYISO).

A two-month-long investigation into Illinois’ high gas prices has concluded that there was no market manipulation, with most of the increases “due largely to factors that affected supply and demand.” The Illinois Commerce Commission released its findings last week, and found that utilities had provided price hike warnings, but consumers did not comprehend their magnitude until winter heating bills arrived.

Alberta Energy Company (AEC) reported rapid gas production growth last week and record earnings. The company is on the fast track to becoming one of the largest gas companies in North America. Within the last year, AEC’s gas production has increased by nearly 500 MMcf/d and new drilling prospects are expected to continue that growth.

Acknowledging that the state’s cost for spot wholesale power supplies has increased significantly since the PG&E utility bankruptcy filing, the newest member of the California Public Utilities Commission lashed out at merchant generators and power suppliers last week for “manipulating” the western wholesale electricity market and extracting billions of dollars out of the states’ economies. If the situation does not ease soon, Gov. Gray Davis is likely to seize some of the private sector power plants, according to Geoffery Brown, a former San Francisco public defender named to the CPUC by Davis earlier this year.

Carrying through on an earlier commitment to ramp up its Deep Panuke operations, PanCanadian Petroleum Ltd. has formed a partnership with Norwegian-based Ocean Rig ASA, which is expected to bring its deep-water drilling expertise to the Canadian East Coast. PanCanadian estimates that 1 Tcf of recoverable natural gas may be stored there at depths of more than 5,000 feet offshore Nova Scotia.

Canadians are cheering on the tight “continental” natural gas market in growing numbers as gains owed to high sales volumes and prices — driven by expanding exports to the United States — spread and multiply. The seller’s market for gas is behind Alberta government projections of a stunning budget surplus in the range of C$10-$12 billion (US$6.8-$8.2 billion) for the fiscal year that ended March 31 — or about C$4,000 (US$2,750) for every man, woman and child living in the province. Virtually all the surplus is owed to oil and gas royalties, and the gas share of them is about 70%.

FERC last week issued an order for the smallest refund amount to the California market to date, alerting three power suppliers that they must justify $587,000 worth of wholesale electricity sold during Stage Three emergencies in the month of March or pay customers back for overcharges.