New mega-marketers, niche players emphasize opportunity.
Mark Hand is senior editor at Public Utilities Fortnightly.
The natural gas trading business has been on a roll since the mid-1980s, when the Federal Energy Regulatory Commission (FERC) issued Order 436, giving birth to the concept of gas marketing companies. Even when the calendar flipped to 2001 and much of the energy industry was swept into the turmoil surrounding the California electric industry restructuring fiasco, gas marketers continued to thrive in the low-supply, high-demand environment. Gas traders pounded out deals that earned record profits for their companies.
California's woes invited increased regulatory and political scrutiny of energy trading companies, especially those head-quartered in downtown Houston. But the ethos of deregulation was too firmly entrenched for even a public relations disaster such as California to turn back the clock on wholesale gas trading competition.
"It's hard to put the genie back in the bottle," says Steve Weiler, head of the Washington, D.C., energy office of the law firm of Leonard, Street and Deinard. "The invisible hand of competition will continue to govern the market."
In her recent book on gas trading, Ann O'Hara, president of the consulting division of O'Hara & Associates, emphasizes the staying power of gas competition: "One thing will remain constant through all current and future FERC activities-the U.S. natural gas industry will not return to the former days of total regulation from wellhead to burnertip."