Motion to intervene and comments of the Municipal Defense Group re Texas Eastern Transmission LP under RP02-494.

PLO2-q- o o 0 02NOV-I PH~:3~ /-'t.=; ;, : ;',--,, 0 0 REGULA u~y COHHISSION Outlook for 0 U1 0 0 I ..J Natural Gas Supply: ..J ro fl fo Myths and Realities fo M o m Presented by: M Vello A. Kuuskraa Advanced Resources International, Inc. o t~ 703-528-8420, vkuuskraa adv-res.com o o t~ Presented at: o Natural Gas Markets Conference (3 fo Federal Energy Regulatory Commission Washington, DC 0 I I ., .. . October 25, 2002 0 0 0 Advanced Resources International JAF02162.PPT u,== - : ' : - Natural Gas Is In Short Su I '~l'he wolf is always at the door." r~ Eagles o o r~ "Pessimists see a serious natural gas o U1 I crunch on its w a y . . . . diminishing 0 0 ..J ..J production and an increasingly volatile market make supplies dangerously tight or fO fl fO prices punishingly high - or both." fO USA Today M o - o - " . . . the crunch could show up sooner... We're going to pay a painful 0 m M price . . . by the third or fourth quarter." Matthew Simmons Q Chairman, Simmons & Co. t~ Production falls as it gets ~r~,~-~,-" Q Q hard to get popular ~ e l .......... .. ~. .... ... t~ $ I~,I I OI J,Y Supplies Will Be Adequate 0 and Moderatel Priced I fl fO t ! 'High Levels of Gas Reserve Additions t~ 0 r~ I are Projected Through 2020" Q I Q Q DOE EIA Am~ual Energy Outlook 2002 Advanced Resources International 2 JAF02162.PPT USA TODAYMay 31, 2002 What to Believe? 0 0 0 U1 I 0 0 ..J ..J r0 fl Expectations for the "supply crunch" by f0 f0 market "bears" are based on three arguments: M o m #1 No Supply Response to Recent Drilling M o t~ #2 Accelerated Depletion of Reserves o o t~ o fl #3 All the Big Fields Have Been Found f0 0 I I 0 0 0 Advanced Resources International 3 JAF02162.PPT Myth #1. No Supply Response r~ o "1 can't get no satisfaction." o r~ i-, i-, Rolling Stones o U1 0 I 0 ..J The "bears" claim that there has been "no supply ..J fO fl response" to the recent "drilling boom" - - new gas fO fO wells have doubled but production has remained flat. M Natural Gas Production (Bcf) 0 m M 1999 2000 2001 2002 A Q First Quarter ~4,849 t~ / Q Q t~ Second Quarter 0 Third Quarter A ~ fl fO Fourth Quarter (4,750~) - ~ ( 4,890 ) t~ 0 r~ I I Q Gas Completions (Wells) 16,500 ~ 22,100 Q Q Source:Modred fromSimmons& Co. Advanced Resources International 4 JAFO2162.PPT Myth #2: Accelerated Depletion r~ o o r~ o U1 ...