By Duncan Sutherland - Exclusive to Gas Investing News

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Market News:

The American Energy Information Administration (the U.S. Government's register of official energy statistic) is still forecasting an increase ^[2] in home heating costs over the winter. The EIA did note that its figures were subject to change as new information about the extent of the financial crisis emerged. The report emerged as natural gas futures on the NYMEX were sliding below the $7 mark, down from their July highs in the low $13s ^[3].

Everyone should read this piece ^[4] in the National Post detailing the crash of energy stocks and the future outlook.

Money quote:

From the bull market high of 470 in June this year, the index has fallen 40 per cent. That puts this energy bear market in a league with the index's worst bear market declines, in 1998, 1986, and 1981.

Wilf Gobert concludes optimistically, predicting that renewed investor confidence (whenever that develops) will boost the energy sector on the TSX once again.

Company News:

TEL Offshore Trust (NASDAQ:TELOZ) announced that Hurricane Ike shut down oil and gas production at its two most valuable properties in the Gulf of Mexico. TEL warns that the fourth quarter distribution to unit holders is likely to be “severely negatively impacted ^[5]” and that the damage may be so extensive as to prohibit any distribution.

EnCana Corp (TSX:ECA) is participating in federal-provincial joint hearings ^[6] over a plan to drill some 1275 wells near Medicine Hat, Alberta. The site is currently the home of Canadian Forces Base Suffield's National Wildlife Area, necessitating the participation of both levels of government. (Natural resources are provincial jurisdiction, and the Canadian Forces Base is obviously of the federal government's purview, as are National wildlife areas). The hearings conclude October 18th.

Pepco Energy Services, a subsidiary of Pepco Holdings (NYSE:POM) has secured a three year contract with the City of Washington ^[7]'s Transit Authority to supply natural gas for the authority's fleet of natural gas buses. Washington Metropolitan Area Transit Authority (WMATA) will require some 2.6 billion cubic feet of CNG for its extensive bus fleet, and Pepco should do quite well from the deal. WMATA was an early adopter of CNG engine technology, and if Pepco plays its cards right, they will build a valuable reputation as a dependable supplier.

International News:

Norway is projecting a 3.8 per cent increase from 2008 numbers in oil and gas output ^[8] for 2009. The country's North Sea formations have become crucial to the economy, supplying more than a third of government income. Natural gas is expected to increase from 96 billion cubic metres to 106 billion cubic metres, just over 10 per cent.

The city government of Lima, Peru is constructing a huge new highway ^[9] project in the metropolitan region that includes significant investment in natural gas buses. Regular readers will note that South Parse has been bullish on natural gas engines since its inception. Though they have not caught on in North America to any significant degree, natural gas engines are approaching a tipping point in the rest of the world, especially South America.