www.shreveporttimes.com Staff and Wire Reports Posted on January 27, 2003

With futures prices for natural gas at their highest level in two years, homeowners across the country are shocked has they open their winter energy bills.

But Shreveport-area homeowners aren't seeing a dramatic hike in their bills. Monthly bills climbed about 5 percent from December to January. said Joe Chambers, CenterPoint Energy district manager for Northwest Louisiana. There may be another 5 percent jump next month as the market price of natural gas increases, he said.

About half of the company's current supply comes from its reserves, which are filled when gas prices tend to be lower. That helps smooth out spikes in price in the winter months.

"It is true that gas prices are inching up ... but not the 20 percent increase like some places across the country," Chambers said.

The price gains elsewhere have been much higher than predicted. In September, the EIA estimated the cost of heating a home with natural gas would rise 17 percent for the October-March winter season from last year. Now, the agency is expecting the gain to be twice that, with bills totaling more than $800 this winter.

The factors driving the increases are the same no matter where customers live:

• It's colder this winter. Last winter was the ninth warmest in the United States since record-keeping began in 1895, according to The Weather Channel, and the warmest on record for the Northeast. Lower temperatures this year are leading to increased demand. Forecasters anticipate lower temperatures to continue in coming weeks.

• Oil prices are higher. Prices have been rising for months because of a general strike in Venezuela and concerns about what will happen to oil supplies if the United States goes to war against Iraq. Because natural gas can often be used in place of oil, especially in industry, a rise in oil prices usually translates into higher natural gas prices.

• Prices are also up for other forms of energy. The EIA estimates winter heating bills will be up 43 percent for heating oil customers, 20 percent for propane and 12 percent for electricity this year. Despite the gain, prices are not expected to come close to winter 2000-01, when costs rose to the highest in more than a decade.

www.petroleumnewsalaska.com Alaska's Source for Oil and Gas News January 2003

Vol. 8, No. 4 Week of January 26, 2003

Gary Park PNA Canadian Correspondent

American Petroleum Institute reports 5% increase in Alaska production vs. 0.7% for all of U.S.; well completions down 25% for fourth quarter to 6,680

A laska led the way in boosting United States’ crude output in 2002 — the first full-year rise in domestic production since 1991, the American Petroleum Institute said Jan. 15 in its Monthly Statistical Report.

A 5 percent rise in Alaska volumes, also the state’s first 12-month gain since 1991, contributed to an 0.7 percent increase in U.S. output to 5.842 million barrels per day, the API said.

But a cloud was building on the supply horizon, with total well completions for the United States down 25 percent to 6,680 wells for the final quarter of 2002, despite robust oil and natural gas prices.

For December, U.S. crude production was 5.865 million barrels per day, off 0.4 percent from a year earlier. Lower 48 production slipped 1.1 percent to 4.79 million barrels per day, but Alaska production for the month climbed 2.8 percent to 1.075 million barrels per day.

Crude imports for 2002 were down sharply by 3 percent to 9.043 million barrels per day and product imports dropped 9.6 percent to 2.298 million barrels per day. However, the year ended with imported crude rising by 0.3 percent to 8.849 million barrels per day, while products jumped 12.5 percent to 2.423 million barrels per day.

“U.S. petroleum imports, following several years of rapid growth, fell sharply in 2002,” the API said. “Overall imports lagged the record level reached in 2001 by 4.5 percent.

“The share of U.S. demand supplied by imports shrank to 57.6 percent, the lowest since 1999.” Imports in 2001 accounted for 60 percent of U.S. demand.

Domestic petroleum inventories declined by 100 million barrels in 2002, the biggest annual decline since 150 million barrels in 1999, with crude and product inventories exiting 2002 at 934.3 million barrels, off 3.6 percent for the month and 9.8 percent for the year.

Crude inventories accounted for the largest share of the decline by falling 36 million barrels.

Canada leading supplier in October In its latest breakdown of U.S. imports, the API noted that for October 2002 petroleum from the Persian Gulf represented 18.2 percent of the total, compared with 25.5 percent a year earlier.

The leading supplier countries for the month were Canada at 2.073 million barrels per day, or a 17.7 percent share of imports and 10.6 percent of domestic product supplied.

The other sources over 1 million barrels per day were Saudi Arabia 1.69 million, Venezuela 1.616 million and Mexico 1.577 million.

API said 2002 was highlighted by “dramatically lower demand for most petroleum products as a result of the aftermath of 9/11, an unusually warm winter, price volatility, OPEC supply fluctuations and a slow national economy.”

John Felmy, director of policy analysis and statistics, said 2003 “promises to be another challenging year,” although U.S. consumers should be assured that the industry will “make every effort to see that consumer fuel needs will continue to be met.”

Even if there is a temporary disruption caused by internal tensions in Venezuela and possible war in Iraq, Felmy said there are other “significant sources of oil,” noting that U.S. petroleum companies have increased worldwide and domestic sources of crude with available new technologies.

Prices soar Because of geopolitical events, West Texas Intermediate crude soared 80 percent above its low point at the start of 2002 to end the year at $33 per barrel. Natural gas prices also rose 80 percent, with marketed domestic production averaging 54.2 billion cubic feet per day in September, the latest month for which figures were available.

In its fourth-quarter 2002 drilling statistics, API estimated completions of U.S. oil and natural gas wells and dry holes dropped by 25 percent from the same quarter of 2001.

For the three months, oil wells were down by 26 percent to 1,566, gas wells dropped 28 percent to 4,143 and dry holes declined by 5 percent to 971, for total estimated completions of 6,680 compared with 8,889 a year earlier.

Total exploratory completions were off 38 percent for the fourth quarter and development completions were down 24 percent, while total footage drilled showed a 24 percent decrease to 35.2 million feet.

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www.projo.com 01/26/2003

Here we go again.

The cold snap has pushed oil prices to two-year highs, raising heating bills and the cost of doing business.

Prices have spiked because of the huge demand for energy this winter, the possibility of a war with Iraq, which would disrupt the flow of oil from the Mideast, and a strike in Venezuela that has shut down refineries.

If that sounds familiar, it is.

Each time during the last 30 years -- when consumers and companies have complained about rising energy costs -- they have been given the same answer.

We are too dependent on foreign oil.

And these days, we are more reliant than ever.

In the early 1970s, when the Arab oil embargo caused gas shortages, long lines at the pumps and the realization that the United States was vulnerable to the Organization of Petroleum Exporting Countries, U.S. oil imports totaled 35 percent.

Today, imports have soared to 56 percent of the oil used annually in the United States.

Some changes have been made since the last crisis to diversify where we get our oil.

But now, three of this country's prime sources of oil -- Venezuela, West Africa and the Mideast -- are in turmoil.

That turmoil pushed the price of a barrel of oil to $35 last week for the first time in years. Home heating oil is at an average of $1.54 a gallon, up 32 cents a gallon from a year ago, and it is forecast to go higher

To reduce reliance on foreign oil, President Bush has set out a plan to search for new domestic sources.

He is following the path of his predecessors who also failed to push for a comprehensive, national energy policy that would cut consumption and encourage alternative energy while looking for new sources of oil.

Mr. Bush's policy

would tap new sources on land previously off limits. It provides tax incentives for new oil and gas drilling in the United States by opening the Arctic National Wildlife Refuge and more public lands in the Rocky Mountains.

There is little in the president's plan to encourage conservation or alternate energy sources, such as wind, sun or fuel cells.

The Senate last year killed the president's proposal for new drilling after fierce opposition from environmentalists and Democrats. But after Republicans took control of the Congress in the November elections, it has come back to life.

Sen. Pete Domenici, R-N.M., the new chairman of the Senate Energy Committee, said the measure could get to the Senate floor in March or April, perhaps attached to a spending bill.

Domenici said the Senate can't develop an energy policy on its own that includes energy conservation measures until it weighs how much more oil and gas might be produced in the future.

Vice President Dick Cheney, an architect of Mr. Bush's energy policy, said conservation is an admirable act of an individual, but had little relevance to national energy policy. He said the national policy has to concentrate on providing energy, not doing without.

Yet, conservation helped the United States cut its energy use growth rate after the embargoes in the 1970s.

And more recently, Californians eased their energy crunch -- after the failure of the state's deregulation plan -- by markedly reducing the demand for electricity.

Other energy initiatives from Mr. Bush leave a mixed message

While his administration has indicated it wants to push for new fuel-efficiency standards for automobiles, the president's $600-billion tax-cut plan includes incentives for business owners to buy gas-guzzling SUVS.

While Mr. Bush's policy seems less than comprehensive, there are national leaders trying to craft a substantive, centrist approach that balances energy use and environmental concerns.

They have formed a group called the National Commission on Energy to "make progress on the touchy issue of the nation's growing dependence on imported oil without screwing up our economy," said John W. Rowe, commission co-chairman.

Another goal, according to S. David Freeman, author of a Ford Foundation report on energy use, is to "have an energy supply without having to go to war to make it work."

The group includes energy policy planners from the administrations of George H.W. Bush and Bill Clinton and experts who represent industry and environmental advocates.

"There really hasn't been an energy policy in this country for 30 years," said Hal Harvey, an officer for the Hewlett Foundation, which is helping to pay for the commission.

"The cost of the absence of one is staggering."

www.centredaily.com Posted on Sun, Jan. 26, 2003 By Adam Smeltz asmeltz@centredaily.com

CDT/NABIL K. MARK Ryan Coleman pumps gas at the Sheetz store at 101 Valley Vista Drive in Patton Township.

STATE COLLEGE - Going for a ride?

With gas prices nationwide having swelled about 32 percent in 12 months, driving to your destination has become an increasingly costly prospect.

Add Venezuela's weeks-long oil strike plus a possible war in Iraq, and the United States might encounter petroleum prices that creep higher still.

"I won't drive any more than I have to," said Dean Smith, 52, of Spring Mills, pumping gas Saturday at the Uni-Mart in Pleasant Gap.

"I'll just do the bare necessities," he said. "That's it."

A year ago, the average price for a gallon of regular, unleaded gasoline was about $1.14 in Pennsylvania, according to the Oil Price Information Service.

By Saturday, gas stations in and around State College were advertising rates about $1.46 per gallon, roughly two cents below the current statewide average.

"Since I live down in Lock Haven and work in State College, it drains the wallet a bit," said Charles Walizer, 24. He said he spends some $40 on gas each week.

"With my commute every day, it's a rather large concern," Walizer said.

At least part of the price increases, which in Pennsylvania include a 4.4-cent jump since December, are blamed on the Venezuela oil strike. The strike, in its 56th day, has stifled exports from the world's fifth-largest oil exporter.

"(Prices) could be worse," said Bill Beard, 46, of Pleasant Gap. "They're manageable right now."

Likewise, local service-station attendants said gas sales have been stable despite price spikes.

"Our business stays pretty consistent unless there's a big hike in price," said Mike Glantz, who works at the College Heights Exxon in State College. "It's basically the same this time of year as it has been."

Traffic at gas pumps down the road seems similarly strong.

"Since (Penn State) reopened" for classes this month, "we've increased sales," said Richard Trialonas, manager of Snappy's convenience store on North Atherton Street.

"It's been nice," he said. "We miss the kids when they're gone."

Jessica Doherty, 19, of Bellefonte, said "it'd take a lot" to calm her driving habits.

"If the price was above $1.60, I think it might slow me down," Doherty said.

Analysts have said a U.S.-led war in Iraq could push the per-gallon expense closer to that point.

Concerns intensified last week when defense officials said Iraqi leader Saddam Hussein might try to sabotage his country's oil fields if the United States invades. Iraq's oil production is about 3 percent of the worldwide petroleum output.

"I think everybody (worries)," said Dondi Smeltzer, 41, of Pleasant Gap. "Whenever the price goes up, you have a little less to spend."

Beard suggested a lasting solution to the price woes may be to limit dependency on oil overall.

"I think we as a country, in the long term, need to move away from use of gas," he said, "and toward other resources."

Adam Smeltz can be reached at 231-4631. The Associated Press contributed to this report.

www.kesq.com

Hope you enjoyed it while it lasted, gas prices are back on the rise. AAA reports it jumped about 13 cents a gallon this past week, the highest jump in decades. We found out why and how long this increase will be going on for.

Experts say there're two reasons, the strike in Venezuela is costing the US about a 15% decrease in our oil production, and speculation of the war looming.

What a difference a week can make when it comes to gas prices. Around the valley, drivers are feeling the pinch. Tina Huffman typically fills her tank up twice a week for work. the rise in gas prices is costing her about 15 bucks more, in just one week.

"It takes most of my pay check to get back and forth to worth,” she says.

On average, AAA reports gas prices in Riverside County have shot up about 16 cents a gallon in the last week, making a difference of about six to seven dollars per tank. Of course, that varies per car.

Bill Thoene says he has to cut his travel down a bit to make up for the dent in his wallet.

"To me, I drive less, I don't, I feel sorry for those who work. It has a huge impact on them."

Ken Williamson has owned gas stations for more than 37 years and says this increase is the highest he's seen.

Higher prices are expected to continue to go up at least for the next six weeks. For some, that means it's time to start driving less.

Officials at OPEC said it will make up for the oil production that's lost from the Venezuela strike, but that will be another six weeks until we start to see the prices come down.