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To: Sergio H who wrote (2115)	6/2/2003 9:38:05 PM
From: JoeinIowa	Respond to of 23958

The Nation's Next Energy Crisis Won't Be At Corner Gas Station Mon Jun 2,10:13 AM ET By David Isaac In the 1990s, natural gas was hailed as the growth fuel of the future. It was relatively cheap, burned cleanly and polluted less. Power plants that used the fuel were easy to build with reliable construction schedules. Related Quotes DJIA NASDAQ ^SPC 8897.81 1590.75 967.00 +47.55 -5.16 +3.41 delayed 20 mins - disclaimer Quote Data provided by Reuters Digital Movies on Your PC Make movie magic the easy way. Check out exclusive features only at Tech Tuesday. But it's become apparent that the early hosannas extolling the wonders of natural gas were overblown. Prices are now about $6 per million British thermal units (Btus), up from an average price of $2 in the 1990s. On May 21, Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) called attention to the problem in his testimony before Congress. "I'm quite surprised at how little attention the natural gas problem has been getting," Greenspan said. He went on to describe the issue as "very serious." The basic problem is overreliance on natural gas for electricity. "Policies that were established for the last five to seven years have resulted in almost all new power capacity being based on naturalgas," said R.W. Jewell, business vice president of energy for Dow Chemical Co. 'Myriad New Uses' Greenspan noted that, in addition to electricity generation, industry has found "myriad new uses for natural gas." Natural gas is used in industry mainly as a fuel source for manufacturing processes. It uses 7.5 trillion cubic feet a year. Electric power, the most rapidly growing sector, uses 6 tcf. Residential customers use 5 tcf, and commercial customers - stores, shops, hotels - use 3 tcf. Total domestic use, at 22 trillion cubic feet in 2001, exceeds production by 3 tcf. As prices rise and it becomes clearer that supplies won't keep up with demand, more people try to call attention to the problem. Even before Greenspan's comments, there were warnings from industrial users of natural gas, like the American Chemistry Council, which in February called on the government to take immediate measures to avoid a supply crisis. And in May, Energy Secretary Spencer Abraham (news - web sites) called for a national summit. Greenspan said the reasons for the tight supplies were a "colder-than-average winter," the country's "limited capacity to import liquefied natural gas" and the failure of increased drilling to raise production. Greenspan also remarked on the contradictory federal policy toward natural gas. "If on the one hand we have encouraged, as we have, very significant growth in domestic demand for natural gas - but are very readily constrained by our ability to increase supply - then something has got to give, and what is giving, of course, is price," he said. Said Jewell: "What he meant by that is that federal policy encourages consumption of natural gas, particularly in the electric power sector. At the same time, federal policy becomes more restrictive and more limiting as to where we can drill for natural gas." While the number of rigs drilling for natural gas has grown - tripling over the last 15 years - production has remained level since 1994 at about 19 tcf a year. There are places in the U.S. to get more gas - off the coasts of California and Florida and in areas of the Rocky Mountains - but they're off-limits, Jewell says. It's not just federal policy, he said, "It's state policy and concerns of the public that are limiting the areas we can drill." Environmental concerns aren't the only factor. The industry promised it could meet demand. Jewell cites a 1999 study by the National Petroleum Council. The NPC is a federally charted advisory committee set up to represent industry views and make recommendations to the Energy Department. "The emphasis on natural gas is good news for the economy, the environment and society as a whole," the 1999 study claimed. It's clear now the study got it wrong. In March, Abraham commissioned from the NPC a new study, which will be completed in December. The natural gas industry's failure to meet demand is "not necessarily for a lack of effort," Jewell said. "They do drill more. The technology is improving. But it seems they're running faster and harder and making no progress." Even if the U.S. were to open up all known natural gas reservoirs to drilling, it would help only temporarily. Most industry watchers agree that the key issue is the need to diversify supply. "The answer is for the country to move to a more diversified electricity mix," Jewell said, including "some nuclear, some clean coal, some conservation and some based on natural gas."

To: Sergio H who wrote (2115)	6/2/2003 10:00:52 PM
From: JoeinIowa	Respond to of 23958

Sergio, I looked at TERN and although I like the industry for growth that is coming I do not see when they will start making any money. Revenues are going to increase a little next quarter but they still will be losing money. I think I'll just watch you guys make money on this one. I can not trade in and out like the Speedy one. Joe

To: Sergio H who wrote (2115)	6/2/2003 11:02:59 PM
From: JoeinIowa	Read Replies (1) \| Respond to of 23958

Sergio, I think I have the portfolio updated once you get EGAM added to the list. A lot of changes to start the week. Joe