In 1997, Fortune magazine speculated that the nation's electricity bill will drop 20% to 30% over the next five to ten years as result of heightened competition caused by deregulation. This drop will continue a trend that started in the early 1930s. Since then, the price of power, adjusted for inflation, has already dropped approximately 66% on a per kilowatt-hour basis, from roughly 28 cents to 8 cents (U.S. average, constant 1992 dollars).
|Selected High and Low U.S. Electricity Rates|
|Average per kilowatt-hour, 1996|
|New Hampshire||11.2 cents|
|New York||11.1 cents
Here's another example of the changes from deregulation of utilities: energymarket.com is a new exchange on the Internet that is operated by Southern California Gas. It's purpose is to let suppliers of natural gas (and eventually, suppliers of electricity) bid for the privilege of supplying utilities to major corporate users.
5) Extension of offshore drilling into extreme depths
The average oil well in the Gulf of Mexico flows 30,000 barrels of oil daily--100 times the rate of flow of an onshore U.S. well. New, extremely deep water wells will flow at much greater rates.
In the U.S. oil and gas exploration arena, very deep offshore wells are where the hottest action can be found. Tremendous advances in technology combined with relatively recent offshore field leasing activity have combined to make offshore wells possible at depths unheard of a handful of years ago. Systems and components are being developed on-the-fly for wells in the 5,000 to 6,000 foot depth of water rangelike the Exxon Diana project, a $1.8 billion, state-of-the art development currently underway offshore in the Gulf of Mexico. Diana and her peer projects will deliver crude in huge volume at costs of less than $4.00 per barrel. While a few of the many projects that were announced in the past couple of years are now being delayed due to todays extremely low crude prices, others are forging ahead. All of these offshore wells are very long term projects that take years to plan and execute, and that will have very profitable production for decades to come.
In addition to Exxon, firms that are extremely active in deep water, Gulf of Mexico exploration include Shell (operator of the record-breaking, 5,300 foot water depth Mensa project), BP-Amoco, Chevron, Mobil and Texaco.
The Gulf of Mexico already produces about one-fifth of all the oil and one-fourth of all the natural gas produced in the U.S. Those ratios will rise sharply as new, deep water wells are brought on line. Meanwhile, watch for extensive, extremely-deep exploration in other parts of the world to capitalize on the technology being developed for use in the Gulf of Mexico.