โ Scribed by Furman, Gary S.
No coin nor oath required. For personal study only.
Given today's U.S. gas market, Canadian gas producers are going to be disappointed in their expectations regarding industrial end users. Conditions in the U.S. market-and what the industrial buyer needs in today's market-will be largely responsible for this disappointment.
For industrials, the US. gas market can best be described as competitive, particularly in the Gulf Coast and in major gas-producing states. Gas, for the most part, is no longer being priced on an alternative fuel basis, but is competing with itself for available markets. Moreover, the gas bubble could well be with us until the 1990s, ensuring continuous gas competition. "When a local utility can ask up to $2 per million Btu for a few miles of transportation, the deal is generally not concluded." Competition and transportation are almost synonymous. Without transportation flexibility, competitive gas prices tend to disappear. Orders No. 436 and 436-A of the Federal Energy Regulatory Commission (FERC) have created temporary transportation problems for industrial purchasers, expecially for lowpriority gas such as boiler fuel. It was FERC's intent in issuing Order No. 436 to create a more competitive market. However, by giving interstate pipelines a choice to accept Order No. 436 or to continue under their existing regulations, FERC has in fact created a roadblock for new gas transportation. If the interstate pipelines all were to accept Order No. 436, this prob-Gary S. P'urman 1s the director of corporate energy at American Cyanarnid Corporation in Wayne, N a v Jersey.
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