Industry cautions US regulators to stay the course with energy restructuring


By the OGJ Online Staff

WASHINGTON, DC, Dec. 6 --Industry officials Thursday cautioned US government regulators not to couple the recent financial troubles of Enron Corp. with restructured energy markets.

"Our market is large and vibrant and while the shake-up of Enron is a shock, it is not by any means a hole that will sink the ship," said the Natural Gas Supply Association of America.

Several congressional committees are investigating the collapse of Enron, once the world's largest gas and electric trader, now on target to be the largest corporate bankruptcy in US history (OGJ Online, Nov. 30, 2001).

Given the scale of the collapse, President George W. Bush's administration is weighing in. Meanwhile, the Department of Energy said its independent statistical agency, the Energy Information Administration, will also study the possible impact of Enron woes on energy markets. A Securities and Exchange Commission investigation of Enron's off-balance sheet partnerships earlier in the fall largely precipitated Wall Street's disenchantment with the company. Now more regulators are stepping in to clean up the pieces. The Department of Labor Tuesday said it was conducting a separate review of how the company handled employee retirement plans after the stock price sank to under $1/share from nearly $90/share early this year.

Industry experts also anticipate the administration may seek to coordinate various agency investigations through an interagency task force of some kind. None has been announced yet. But administration officials stress the main thrust of any investigation will be to see why Enron's auditors apparently failed to require Enron to disclose important financial information that made the company look much more profitable than it actually was.

The new chairman of the agency that oversaw much of Enron's business dealings in the wholesale energy market, the Federal Energy Regulatory Commission, has said he shares NGSA's view, saying that the bankruptcy is a "human tragedy" but that it should not be an indictment of open markets.

FERC officials say they are still monitoring the market to ensure customer deliveries are met. But if there has been any good news to come from the Enron debacle, it is the clear evidence that competitive markets do work, recently installed FERC Chairman Pat Wood and Commissioner Nora Brownell have said in recent interviews. And there are enough market participants to move in where Enron has left.

That's a view shared by NGSA.

"Today, there are a multitude of participants in the natural gas market. There are almost 8,000 producers transporting natural gas with the help of 165 pipeline companies, which deliver natural gas to homes through over 1,000 local distribution companies," NGSA said.

"Importantly, over 300 marketers, not just one, make all this happen by providing energy products and services. Since the Wellhead Decontrol Act of 1989, natural gas has been bought and sold competitively."

What worries industry more are calls in Congress to consider new regulatory controls over energy markets.

Lawmakers like Rep. Ed Markey (D-Mass.) say energy derivatives need to be more tightly regulated so regulators have a better handle understanding the risks associated with trading portfolios.

Whether Congress will take any action is uncertain, congressional sources say, although any new proposals would likely not be considered until next spring at the earliest. Congress is scheduled to leave for a month-long recess in mid-December.

Taking aim at the energy derivatives market is possible, although attempts to curb wholesale competition along the gas grid are far less likely, congressional sources said.

However, new proposals to encourage open access in wholesale electric transmission markets may face tighter scrutiny, they added.

Related Articles

Chinese regulators approve Sinopec’s plan for grassroots refinery

02/06/2015 China’s National Development and Reform Commission (NDRC) has approved Sinopec Beijing Yanshan Petrochemical Co. Ltd., a subsidiary of China Nation...

BOEM schedules public meetings about draft proposed 5-year OCS plan

02/06/2015 The US Bureau of Ocean Energy Management will hold the first of 20 public meetings in Washington on Feb. 9 to receive public comments on potential ...

Congressional Republicans renew bid to halt sue-and-settle maneuvers

02/05/2015 Calling it an affront to regulatory accountability that results in unchecked compliance burdens, US Sen. Charles E. Grassley (R-Iowa) and US Rep. D...

Oil-price collapse may aggravate producing nations’ other problems

02/05/2015 The recent global crude-oil price plunge could be aggravating underlying problems in Mexico, Colombia, and other Western Hemisphere producing natio...

Goodlatte reintroduces bills to repeal, reform RFS

02/05/2015 Calling it “a true ‘kitchen table’ issue,” US Rep. Bob Goodlatte (R-Va.) reintroduced a pair of bills to address problems in the federal Renewable ...

Alberta’s premier seeks more North American energy integration

02/05/2015 Better policy integration and cooperation will be needed for Canada, Mexico, and the US to fully realize the North American energy renaissance’s po...

Oil, gas infrastructure investments essential, House panel told

02/04/2015 Investments in oil and gas transportation and storage should move ahead because they are essential in continuing the US economic recovery and North...

EPA suggests DOS reconsider Keystone XL climate impact conclusions

02/03/2015 The US Department of State might want to reconsider its conclusions regarding potential climate impacts from the proposed Keystone XL crude oil pip...

Obama’s proposed fiscal 2016 budget recycles oil tax increases

02/02/2015 US President Barack Obama has proposed his federal budget for fiscal 2016 that he said was designed to help a beleaguered middle class take advanta...
White Papers

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by
Available Webcasts


Prevention, Detection and Mitigation of pipeline leaks in the modern world

When Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST



On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected