From http://www.enerfax.com:

Sonoran Open Season Results

Kinder Morgan and Calpine Report Successful Open Seasons for Sonoran
Pipeline; More than 1 Bcf per Day for Phase 1 from San Juan Basin to
Needles
and Topock; Another 1.5 Bcf per Day for Phase 2 from California Border to
San Francisco.

Canadian Producers Investigate Coal Gas

    Canadian producers are counting on obtaining big natural gas volumes
from shallow coal seams. Alberta Energy, Nexen, PanCanadian Petroleum and
Penn West Petroleum are spending millions of dollars to investigate whether
natural gas trapped in coal beds less than 3,300 feet deep can be produced
economically.  The US derives 7% of its natural gas production from coal
seam gas. Western Canada is estimated to have between 135 Tcf and 260 Tcf
of
recoverable coal gas. Natural gas fields containing at least 17 Tcf have
been discovered in Canada's Far North, but bringing them to market will
cost
billions to build new pipelines and other facilities. Advocates say many
coal deposits sit near existing processing plants and transmission lines,
meaning coal gas fields will be cheaper to connect and produce than Arctic
reserves. The Alberta Research Council has spent several years researching
ways to enhance coal gas production and is looking for C$12 million to
proceed with a pilot project.

El Paso Market Power Abuse Investigation Continues

    FERC's investigation into alleged market power abuse by El Paso is
still
proceeding a month after it began. Both El Paso and the California PUC have
painted contradicting versions of events, and the hearing looks no closer
to
conclusion than when it began. El Paso is attempting to discredit a study
prepared by The Brattle Group, a Massachusetts consultant hired by Edison
to
find evidence that El Paso Merchant wielded market power. It dutifully
concluded that soaring California prices were not caused by regular market
forces and pointed to a conspiracy to widen border-basin price spreads. As
part of El Paso's effort to tarnish the study, a professor of political
economy at Harvard's Kennedy School of Government testified that Brattle's
tale doesnt add up. In order to prove market power, he said 3 conditions
must be met: * The system for getting gas to California must not be full; *
El Paso Merchant must have unutilized, but available, delivery rights; and
*
Other shippers must have fully utilized their delivery rights. The final
condition, he says proves that market power is impossible to establish.

EIA FORECAST

EIA forecast for the 2nd and 3rd quarters of 2001, with last month's
estimates and actual year-ago figures:
(quantities in TCF, prices in $ per MCF)

                        Q2-2001                           Q3-2001
                June   May    2000              June   May    2000
                Est    Est    Actual            Est    Est    Actual
DEMAND      5.04   5.08   5.00             4.90   4.85   4.72
SUPPLY      4.77   4.99   5.02(R)          5.13   5.03   4.94(R)
STORAGE     1.80   1.61   1.71             2.66   2.59   2.47
WHD PRICE   4.35   4.57   3.06             3.95   4.73   3.87
($ per MCF)

This does not compare EIA forecast versus actual for the same period, but
rather, two EIA forecasts (May and June of this year) vs year ago actuals.
Between May and June, EIA's price forecast for the 3rd quarter has plunged
from 4.73 to 3.95.  Demand, Supply, and Storage are all a bit higher.  I
assume Supply means production, that is, it doesn't include imports from
Canada or LNG.

Calpine Arizona Power Plant Connected

    The western power market received a welcome addition yesterday as
Calpines new 540 MW power plant in Arizona began commercial operations. The
natural gas fired South Point power plant has been connected to the grid
and for markets in Arizona, Nevada, and California. Calpine The facility is
at the Fort Mojave Indian Reservation in Mohave County, and is Calpines
first major power plant to start commercial service in the West. It is
developing nine power plants in California that are under construction or
in various stages of permitting, and two new plants under construction in
Oregon and Washington. Together, these new power plants will produce more
than 3,400 MW.

Bob Brooks
GPCM Natural Gas Market Forecasting System
http://gpcm.rbac.com