Energy Brief
Citizens Gas

Short-Term Price Outlook is Good

Short-Term Price Outlook is Good The short-term outlook for natural gas prices is good, but price volatility seems to be a permanent feature of the market and down turns in prices will likely be shallow, according to John Righeimer, with Maverick Energy, who spoke recently at a meeting of commercial and industrial customers sponsored by Citizens Gas.

Warmer than normal weather last winter and no hurricane damage to production facilities the past two years has produced stable natural gas prices in 2007.

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Ethanol Boom Appears to be Fading

Lincolnway Energy, a midsize distillery in Iowa, was once virtually alone in the region. Today, though, competing distilleries are operating and pouring even more ethanol onto the market. The ethanol boom of recent years — which spurred a frenzy of distillery construction, record corn prices, rising food prices and hopes of a new future for rural America — may be fading.

Only last year, farmers here spoke of a biofuel gold rush, and they rejoiced as prices for ethanol and the corn used to produce it set records.

But companies and farm cooperatives have built so many distilleries so quickly that the ethanol market is suddenly plagued by a glut, in part because the means to distribute it have not kept pace. The average national ethanol price on the spot market has plunged 30 percent since May, with the decline escalating sharply in the last few weeks.

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Milestone for Industrial Energy Efficiency

In retrospect, June 11, 2007 may be a huge milestone in the advancement of industrial energy efficiency. On that day, the National Association of Manufacturers (NAM) announced its intention to promote energy efficiency to its 300-plus member companies. To do this, NAM signed a memorandum of understanding with the U.S. Department of Energy (DOE). This partnership aims “to assist manufacturing facilities to initiate and implement energy management programs, adopt clean energy efficient technologies and to achieve continual energy efficiency and intensity reduction improvements.” The substance to be promoted by this partnership is the vast collection of energy-efficient technologies, diagnostic tools, and reference materials developed or sponsored by DOE.

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FERC to Probe Gas Pipeline Practices

The Federal Energy Regulatory Commission (FERC) has approved issuance of a Notice of Inquiry (NOI) into natural gas pipeline practices for recovery of fuel, lost and unaccounted-for natural gas. The Commission is exploring how best to both guard against over-recovery of fuel costs by pipelines and encourage pipelines to improve fuel efficiency and reduce lost and unaccounted-for fuel.

"Without periodic rate review, many pipeline fuel retention rates have been in effect for years," said Independent Petroleum Association of America (IPAA) Chairman Mike Linn. "While pipelines should be compensated fairly for the fuel used in transporting natural gas, some pipelines appear to be benefiting from large over-recoveries. We support today's action in that it will prompt an assessment of the way in which pipelines recover fuel."

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Save The Date – National Association of Power Engineers Meeting

October 25, 2007  
Saving Energy with Ultra Violet Lighting Application to Clean Chilled Water Coils  
Calvin Stewart, President of UV Solutions

November 29, 2007
Program information is forthcoming.

All meetings are held at 12 noon at Citizens Gas, 2020 North Meridian Street, Indianapolis, IN.
For more information please contact Rick Ratliff at DLR Mechanical at (317) 253-6822.