Dominion Power 2000 Annual Report Download - page 14

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But over the past year, as gas prices have reached new and unprece-
dented highs, some pundits have called into question the viability of gas
as a generation fuel. We believe these high prices cannot be sustained.
The laws of supply and demand will work to bring down the market price
of natural gas within the next few years.
In fact, gas is firing the economy. Industry forecasts project growth in natural
gas consumption of nearly 50 percent in just ten years—half of which will
fuel power units. Virtually every major power facility being developed in the
United States will use clean-burning natural gas.
Increased oil and natural gas prices helped our exploration and
production businesses contribute $1.14 to operating earnings in 2000.
Last year’s high prices reminded us of the need to develop the
abundance of natural resources within our reach. Last year, our combined
exploration and production unit produced 316 billion cubic feet of natural gas
equivalents from a balanced mix of properties. This represented growth of
about 190 percent from Dominion’s stand-alone 1999 production. We’re
reinvesting some of our profits to develop additional production.
In gas production alone, we’ve become one of the nation’s largest
independent producers.
It’s ironic—and instructive—that the energy sector witnessed such
volatility during our first year as a combination electric and gas company.
It showed why our merger made sense. As I told you last year, our merged
company has the ability to hedge shifting commodity prices. We can serve
consumers efficiently and reliably under a variety of market conditions
while delivering value to you, our shareholders.
12
Dominion offshore
platform substructure
under tow in Louisiana
Firing the Economy: Growth in Natural Gas
Exploration and Production
Industry forecasts project growth in natural gas consumption of
nearly 50 percent in just ten years—half of which will fuel power
units. Virtually every major power facility being developed in the
United States will use clean-burning natural gas.
Selling Gas or Power—When Conditions Are Right
Dominion is one of
the nation’s largest
independent natural gas
producers with operations
in Canada and Appalachia,
and on the Gulf Coast.