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Enron Mail |
I think that Margaret's analysis may cover much of this (not the Enron
specific action). Jim Janel Guerrero 04/03/2001 01:07 PM To: Richard Shapiro/NA/Enron@Enron, James D Steffes/NA/Enron@Enron, Harry Kingerski/NA/Enron@Enron, Jeff Dasovich/NA/Enron@Enron cc: Subject: strategy for natural gas issues Guys, Our friends at Environmental and Energy Analysis sent this email around regarding the gas shortage in CA. They might be useful for us in terms of analysis, prepartion etc. Or is MRW already providing us with this type of assistance? ---------------------- Forwarded by Janel Guerrero/Corp/Enron on 04/03/2001 01:04 PM --------------------------- "Joel Bluestein" <jbluestein@eea-inc.com< on 04/03/2001 10:05:24 AM To: mschoen@enron.com, Janel_Guerrero@enron.com, jkeeler@enron.com cc: Subject: fuel switching in california besides electricity, there is an equal and related upcoming meltdown on gas in california. our assessment is that the current high prices are largely a result of intrastate constraints that will be exacerbated as gas use for power generation increases. for this summer it is possible that there will be generating constraints due to inadequate gas delivery capacity. a more likely outcome is that power generators will get the gas they need at the expense of storage injection for winter heating load. this will create supply problems and higher residential gas problems next winter. summer prices for industrial gas users will also be higher. a possible solution is to take advantage of fuel switching. many of the california plants are old oil/gas plants and have the capacity to switch fuels. they are currently limited by environmental limits. it might be in california's broader interests to allow some flexibility on switching this summer to ensure power reliability and adequate gas storage for the winter. reasons for possible interest for enron - better power reliability this summer, possible gas/oil trading opportunities, emissions trading opportunities?, other? since oil is much cheaper than the currently high california gas prices, this option would also increase the profitability of the plants that switch fuels. it's not clear whether this helps Enron. one option would be to require very clean oil since the market will bear significant cost. there are a few questions related to this: how tight will gas be this summer? what are the likely impacts without switching? are the plants still oil-capable? let me know if this is something you are interested in discussing. Joel Bluestein Energy and Environmental Analysis, Inc. Phone 703-528-1900 Fax 703-528-5106
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