As slogans go, the chant echoed among energy futures brokers that natural gas will be trading on the New York Mercantile Exchange next quarter is falling on skeptical ears.
It's a rather passe slogan, dating back to the first discussions in 1983.
Periodically, the chant is revived and the upcoming quarter is predicted to bring a natural gas futures contract. All to no avail, thus far.
Exchange leaders and members of its Natural Gas Advisory Committee are again forecasting natural gas trading to begin as soon as the first quarter 1990, but that optimism hasn't filtered down to the general stream of commodity brokers.
"I know it's been said before, but once again, I think 1990 is the year," said Dr. Arnold E. Safer, president of The Energy Futures Group in Maryland and a member of the exchange's advisory committee.
Commodity brokers and financial consultants in Oklahoma see quite a different picture. And, independent natural gas producers haven't even warmed up to the idea.
The problem: Deliverability.
To work properly, there must be a delivery point accessible to the entire market. For example, Cushing, at a central U.S. location with a vast network of crude oil pipelines is the delivery point of the New York Mercantile Exchange for crude futures.
Oklahoma, however, is not in the running for a natural gas delivery point. Natural gas producers in Oklahoma have complained of pipeline capacity shortages for several years. There are, however, several expansions being discussed among pipeline companies.
Exchange members have narrowed the possibilities of a natural gas futures delivery point to East Texas or Louisiana.
The upcoming quarter is different from those that preceded it since the Federal Energy Regulatory Commission has taken a hands-off approach to the concept.
An application for an interchange at Katy, Texas, at the Federal Energy Regulatory Commission had stalled progress in the exchange's plans for almost five years.
Last month, federal energy regulators ruled the nominated delivery point at Katy did not require any special authority from the commission. Due to the commission's growing policy on open access transportation, under which an estimated 80 percent of pipelines now operate, federal energy commission approval was not needed. …