WATCHING WASHINGTON A ROSY OUTLOOK FOR U.S. GAS

With Patrick Crow Federal Energy Regulatory Commission Order 636 has thrown local distribution companies (LDCs) into an uncertain and competitive atmosphere this winter. But LDCs seemed undaunted at the American Gas Association's annual meeting in Washington last week. David Jones, outgoing AGA chairman and President and CEO of Atlanta Gas Light Co., said, "Overall demand for natural gas is increasing in all of our markets. "Natural gas, with sufficient help from the federal government,

Oct. 18, 1993

3 min read

Federal Energy Regulatory Commission Order 636 has thrown local distribution companies (LDCs) into an uncertain and competitive atmosphere this winter.

But LDCs seemed undaunted at the American Gas Association's annual meeting in Washington last week.

ROSY OUTLOOK FOR GAS

David Jones, outgoing AGA chairman and President and CEO of Atlanta Gas Light Co., said, "Overall demand for natural gas is increasing in all of our markets.

"Natural gas, with sufficient help from the federal government, could conceivably displace as much as 1.7 million b/d of foreign oil imports" in the next decade.

"More than 99% of the natural gas used in the U.S. comes from North America. And we believe there's enough under our continent to supply us for at least 30 years," Jones said.

Robert Ridgley, incoming AGA chairman and president and CEO of Northwest Natural Gas Co., said, "The political climate has never been better for natural gas. The current administration is the most pro natural gas group ever to occupy the White House.

"Increased natural gas use was one of the four major provisions of President Clinton's energy program. Next year's budget provides funding and tax incentives that will result in government at all levels - as well as the private sector -using more natural gas.

"The regulatory uncertainty that has bedeviled our industry for so long is coming to an end. True, we have all found fault with Order 636, but the bottom line is this: No longer must our priority be meeting the dictates of federal regulators. Now our priority is meeting the needs of our consumers."

So Ridgley urged AGA members to rethink the way they do business. "In my opinion, we are no longer in the business of selling BTUs. We are in the energy service business. And chief among those services is showing our customers how to use gas more efficiently."

PICKENS' VIEW

Mesa Pres. Boone Pickens said, "Everything is falling into place for gas to play a pivotal role in resurrecting the oil and gas industry in America and at the same time improving the environment. Everything is going to be driven by economics, and government has set the stage for the transformation of our industry."

He said natural gas is the best automotive fuel and noted that 14 natural gas vehicles (NGVs), the "Clean Across America" caravan, is making a 17 day transcontinental trip to demonstrate vehicle technology and refueling infrastructure.

Pickens said there could be 20 million NGVs in the U.S. within a decade, a tenth of all the cars and trucks on the road. "That could increase gas consumption 3 tcf and reduce oil imports 570 million bbl/year."

He also noted 1993 is the first year wellhead revenues for gas will exceed oil revenues, 5217, vs. 48%, and predicted gas will be 70% of U.S. production within a decade.

"Put simply, its no longer the oil and gas industry, it is the gas and oil industry," he said.