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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: ChanceIs who wrote (46616)6/18/1999 11:25:00 AM
From: Douglas V. Fant  Read Replies (4) of 95453
 
Chancels, My guess is that budgets to drill for natural gas will jump up in 1999. Those budgets are being drafted already- probably put into written form this summer and reviewed by Ex-coms and "locked in" after Labor Day.

Let me mention a growing but "hidden" source of natural gas demand in North America. As we move toward deregulation of the power supply industry in the USA, a number of energy companies are cutting deals to supply power directly into power grids on behalf of utility companies.

Around the US there are more remote locations where it's not efficient for a power company to build out and maintain generating units- and the utility is thus stuck with a long way down transmission lines (loss of power through resistance)to transport electrical energy there. But for energy companies who have local staffs, it is more efficient to drop in a 5 or 10 Mw gerator right in the middle of a natural gas field, and immediately burn the natural gas that you produce, convert it to energy, and export it out the transmission lines that connect ito your oil & gas field.

Utiliies like these arrangements- they get assured additional power suplis with no capital commitment. ... The point being that there wil lbe a growing number o what I call "off the books" Mw generators popping up here and ther in North America moving forward- another source of natural gas demand....
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