Governor seeks natural gas probe

Skyrocketing natural gas prices prompted Gov. Jon Huntsman Jr. to call Friday for federal investigations into possible price manipulation.

The governor — joining a chorus of critics, including consumer advocates and Utah industries that have been squeezed by higher energy prices — sent letters to the Federal Energy Regulatory Commission, the Commodity Futures Trading Commission and the U.S. Senate, formally requesting investigations into whether market manipulation of natural gas prices is occurring.

"I am concerned that manipulation could be occurring," Huntsman said. "I am asking our federal regulators, who are tasked with monitoring the markets, to ensure that they are working properly and in the best interests of consumers of natural gas."

In a prepared statement, Huntsman said that despite hurricanes and cold weather, natural gas supplies remain at adequate levels. Yet prices continue to rise, threatening Utah's economic growth.

Nationally, natural gas reserves in underground storage totaled 2.6 billion cubic feet for the week ending Jan. 6, roughly the same as reserves last year at this time, but nearly 12 percent above the five-year average, according to the U.S. Energy Information Administration.

In 2005, Utah consumers saw their natural gas bills rise about 38 percent compared to 2004. Those increases can be traced to high natural gas prices Salt Lake-based Questar Gas Co. must pay for natural gas on the wholesale market to meet the demands of its customers.

Despite those increases, Questar said its customers pay the lowest natural gas rates in the nation.

"Unfortunately, the governor has received bad advice," Questar said Friday in a prepared statement. "Yes, natural gas prices spiked after the hurricanes ripped up major producing facilities. But prices have since fallen 40 percent as those facilities have been restored and Americans conserve. In short, markets are behaving the way one would expect."

Last month, the governor's father, Jon Huntsman Sr., founder and chairman of Salt Lake-based Huntsman Corp., raised allegations that traders on the New York Mercantile Exchange were manipulating natural gas prices.

"The traders and speculators will tell you these ridiculously high prices are simply the result of supply and demand. Nonsense," Huntsman Sr. said at that time. "There is no shortage of natural gas, and demand is no greater than it has been for several years. Further, inventories are at near-record levels."