It is widely agreed that one of the most important events that
would serve to boost natural gas prices is better marketing. Sure,
Mother Nature could help by chilling out a bit more, or at least
more normally, this winter. But still the market for gas must be
There are two types of new markets.
First, there are new geographic markets, like New England or
the West Coast or Atlantic seaboard.
Second, there are new types of markets, like air conditioning
or natural gas vehicles.
There has been much fanfare about natural gas vehicles,
particularly in Oklahoma, so I will not belabor the point further.
On the former angle, though, there is an interesting debate
about increasing delivery of Oklahoma natural gas to new areas.
There are several new pipeline connections in Oklahoma _ the
huge Arkla line, Natural Gas Pipeline's link of its west and east
lines across the state and Transok's new intrastate line. Others
are planned, and most concentrate on the Arkoma Basin or linking it
with the Anadarko Basin.
When all the new pipelines are complete, there will be room for
another 3 billion cubic feet of natural gas per day and then some.
All at a cost of some $3 billion or more.
There are two factors that hinge upon the success of these
pipelines in improving conditions for producers.
One, there has to be upstream connections to new markets.
Two, there is the impact of intrastate connections, which has
emerged due to the federal policy of open access to interstate
"Gas is now being moved between pipelines," explained Doug
Burton, chairman of The Acarus Group in Oklahoma City, in a recent
interview. "In the old days, and the old days is back in the '70s,
those pipelines aggregated their own supplies, and they tried to be
self-sufficient. That much gas didn't slosh around from pipeline to
"But with the creation of this large, interruptible market and
open access, there have been a lot of interconnections made between
trunk lines, interstate as well as intrastate pipelines.
"So, gas sloshes around a lot more. Evidence of that is how San
Juan Basin (New Mexico) gas is moving clear across Texas on back
hauls, combination back hauls and forward hauls and, it's going all
the way up to the East Coast.
"We saw the demarcation line for gas going to the West Coast
and East Coast about coming right down through Oklahoma City,
maybe, in the past.
Now it has shifted about 700 miles to the west." That means
Oklahoma natural gas used to go westward if produced west of
Oklahoma City or eastward if produced east of Oklahoma City. Now
all Oklahoma gas is directly competing with gas elsewhere for all
Particular attention has been given to New Mexico gas because
it is highly credited with tax breaks that cause discounted prices.
Estimates show a 90-cent advantage for New Mexico gas, which is
produced from coalseam methane caverns.
For those interested in taking advantage of intrastate
pipelines to reach new markets, Gas Daily and Gas Buyer's Guide are
holding a conference specifically aimed at producers and marketers
in Oklahoma, Texas and Louisiana on Oct.
2-3. The conference, which features Gov. Henry Bellmon's former
energy aide William C. Liedtke III and Ward Petroleum President Lew
Ward, will be in Houston. …