Jun 23, 2003
Shades of Enron! Natural gas companies have declared a "shortage" and are hiking prices. For example, the two Michigan gas companies have just hit residential customers with price hikes of up to 40%. Of course they hiked the price in summer so that it wouldn't look so big. But wait until this coming winter, when the gas bill that was $100 last year will now be $140!
Natural gas producers say that stocks are low, so prices have to go up. How often haven't we heard this line! As if the companies are not capable of managing their affairs. In fact, as the Enron scandal proved, they are only too capable of managing their affairs – in the direction of very profitable scams. It was Enron which led the electricity companies in proclaiming a disastrous shortage of electricity and enormous price hikes that nearly bankrupted California – until Enron's conspiracy with other companies to manipulate the market was revealed.
We can recall that one of the chief players in the Enron scandal was the El Paso Corporation, an energy trader and pipeline company which also played up an alleged natural gas "shortage" but quietly dropped it when the Enron affair got too hot. Now they and their sort are back with another "shortage."
The CEO of EnCana, a pipeline company in Canada, anticipates a 2.5% rise in cash flow for every 10-cent rise in gas prices. He commented, "This is the strategy payoff we have been anticipating for many years."