Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.energy From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: energy Thu, Apr 2 1992 Date: Thu, 2 Apr 92 05:44:59 EST Message-ID: 04-02 0000 DECISIONLINE: Energy USA TODAY Update April 2, 1992 Source: USA TODAY:Gannett National Information Network OIL PRICES UP: Oil prices advanced Wednesday in buying mostly motivated by internal market forces. Light sweet crude oil for delivery in May climbed 40 cents a barrel on the New York Mercantile Exchange to settle at $19.84 a barrel. Lower-grade sour crude for delivery in May rose 40 cents a barrel to settle at $17.24 a barrel. Analysts attributed the price gains to buying momentum that fed on itself. NATURAL GAS PRICES ADVANCE: Refined petroleum product futures posted gains Wednesday at the Mercantile Exchange. Unleaded gasoline for May delivery finished at 62.29 cents a gallon, up 1.73 cents. Home heating oil for delivery in May added 1.48 cents a gallon to close at 54.45 cents. Among other energy products, natural gas prices rose, with May contracts settling at $1.381 per 1,000 cubic feet compared to $1.357 Tuesday. OIL HAS TO BE PART OF DEAL: If better U.S. access to Mexican oil is not included in a North American trade accord to be negotiated next week, the deal is going to be difficult to sell to Congress, experts said Wednesday. The current draft of the trade treaty circulating around Washington contains no mention of energy. Mexico has been adamant that oil will not be negotiated. Officials cite constitutional prohibitions. (For more, see special Trade package below.) PROPOSALS TO BE CONSIDERED: Proposals to help the coal industry will be considered next week by the House Interior Committee as it debates its portion of new energy legislation. One proposal would extend through 2010 the current tax paid by coal companies to provide the money to reclaim abandoned mine lands and divert some of that income to a fund created to pay for retired miners' health care benefits. OTHER ADDITIONS PROPOSED: A House Interior subcommittee Wednesday proposed additions to House energy legislation. Among them: Making mining firms liable for any structural damage caused by the collapse of underground coal mines; relaxing some restrictions that discourage coal firms from going back into previously mined areas; and prohibiting the issuance of federal coal leases to firms that are importing coal. FALKLANDS WANTS SEARCH FOR OIL: The Falkland Islands government is inviting tenders for seismic studies for oil in disputed territorial waters in the South Atlantic. However, the British government has forbidden any further step towards developing an oil industry in the area pending and agreement between it and Argentina. A Falklands official said he expected seismic studies to be completed by the end of this year. HONDO AGREES TO SELL REFINERY: Hondo Oil & Gas Co. said Wednesday that it will sell its Fletcher refinery in Carson, Calif., its asphalt barge operations and two asphalt terminals in Hawaii to Signal Hill Petroleum Inc. for $10 million. The transaction, involving all the shares of Fletcher Oil and Refining Co. and Pauley Transportation Inc., will be completed once it has received regulatory approvals. OIL FIRMS MULL COMBINATION: Amoco Production Co. and Chevron USA may decide by fall whether to combine their gas sweetening operations north of Evanston, Wyo, where they both have plants. The companies said the catalysts for the move are rising costs and lower gas prices. DAM CONSTRUCTION APPROVED: The Army Corps of Engineers Wednesday approved the construction of a $22 million hydroelectric dam and generator on the Payette River near Horseshoe Bend, Idaho. Opponents of the dam say they may sue to stop the work. They say the dam may violate state water quality rules and damage wetlands. SPECIAL PACKAGE ON TRADE: BROADENED OPPORTUNITIES WANTED: Negotiators of a North American trade accord meet next week in Montreal. A bipartisan group of senators has demanded removal of restrictions on petrochemical and petroleum refining facilities in Mexico, and the General Accounting Office reports that U.S. oil companies are not willing to invest in Mexico's oil production unless their opportunities are broadened. NO OIL MAKES NO SENSE: Sen. Pete Domenici, R-N.M., a prime supporter of increased U.S.-Mexico trade, has been pressing negotiators to include energy-related provisions in the pact and to broaden the oil provisions. Rep. Sam Gejdenson, D-Conn., has said that a North American Free Trade Accord that does not address the largest commodity traded between the two countries - Mexico's oil - makes no sense. STUDY SHOWS NEED FOR AID: A just released GAO study reveals Petroleos Mexicanos (PEMEX) needs $20 billion to modernize its plants and increase production to meet not only its export market but its own growing domestic market. PEMEX still is government owned. Without that investment and modernization, Mexico will be a net importer of oil in 10 years, oil economist Christopher Whalen predicted. U.S. FIRMS WANT RISK CONTRACTS: Foreign sources for that money are tight. Private U.S. companies are reluctant to sink money where they cannot sink wells and extract profits. Oil companies want risk contracts. They want to use their capital to explore where and how deep their experts say. If they come up dry, they lose money. If they strike oil, they are paid a share or fee based on wealth of their discovery. (End of package.) Energy Editor: William Snoddy. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. 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