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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: kodiak_bull who wrote (74334)	9/23/2000 10:32:35 PM
From: Douglas V. Fant	Read Replies (1) \| Respond to of 95453

kodiak_bull, De acuerdo amigo! Here's my last comment on the subject matter- You all can vote for whomever you wish- This is a free country. My "heartburn" with Al Gore's attack on so-called "Big Oil" (even knowing though that most of the majors have abandoned efforts in the US) is as follows: If you juxtapose a chart of San Juan Natural gas prices against a chart of Palo Verde (Zone "AZ3" in the California Power Exchange)Nuclear Power Plant Price/Megawatt Hour of Electricity, and use a simple Spark Spread conversion ratio, then you will see that for the year 2000, 98% of the time, there was greater value in the electrical side of the spread. In fact in the Summer 2000, the price equivalent that electrical companies received for their converted natural gas rose as high as $30/mcf equivalent of natural gas. Now of course the natural gas companies who sold the natural gas to the electrical companies did sell the NG at or around $3.00-$5.00/mcf- up anywhere from 100%-175% from the price levels of $1.50/mcf in 1999- to be sure much higher price levels, and part of why Mssr. Gore levels an attack against "evil big oil". However, the power companies then took that $3.00-$5.00/mcf NG, turned it into electricity and sold the same energy product for an equivalent of up to $30.00/mcf to electrical customers- an up to 600% markup over the prices of the NG/energy companies! So if "big oil" is a "Blue Meanie" then "Big Power" must be at least triple the "Big Blue Meanie" due to their huge electricity price markups and therefore due a really major tongue lashing by Mssr. Gore, right? So where's Mssr. Gore's attacks upon "Big Power"- Seen any lately? Well, I'm waiting...and waiting...and waiting...No you haven't- and no you won't. Why? "Evil "Big Oil"'s voting constituency is located primarily in Texas, Alaska, Oklahoma, and somewhat in Louisiana, States that usually vote Republican anyway. So Mssr. Gore burns (in his opinion) very little political capital by only attacking the first step in the energy price food chain, i.e., the oil & gas industry. But if he also attacks power companies for tripling the price of the NG after conversion from natural gas to electricity, well power companies and their employees and families are scattered all over every State in the Union- and thus so are the potential power company voter constituencies. Another reason he cannot attack the power companies is because FERC has largely fumbled the electrical deregulation process- it would shine a light on one of the failures of the Clinton-Gore administration. So Mssr. Gore seems to be inconsistent in attacking oil & gas companies, yet ignoring the huge markups by power companies on the price of the very same energy product and at the very same time. Finally one aside- Mssr. Gore may be unaware that a significant percentage of oilfield workers are Hispanic. Attacking the oilfied workers is attacking many Hispanics' livlihood.... OK, that's my last political comment. Now I share your concern over prices of energy stocks. The current path of least resistance short-term is upward....But out there in three, four months will tech stocks reassert themselves?