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APACHE LAMPOONS UTILITY REQUEST URGES DOE TO SUPPORT NATURAL GAS ALLOWABLE REFORM

 APACHE LAMPOONS UTILITY REQUEST
 URGES DOE TO SUPPORT NATURAL GAS ALLOWABLE REFORM
 DENVER, Feb. 6 /PRNewswire/ -- Apache Corp. (NYSE: APA) today released a letter from its Chairman and Chief Executive Officer Raymond Plank to Secretary of Energy James D. Watkins. Plank urged the Secretary to dismiss Associated Gas Distributors' (AGD) and United Gas Distributors' (UGD) pleas to have the Department of Energy commence legal action against the Texas Railroad Commission for its initiative to update its system of natural gas prorationing.
 Plank also assailed the gas distribution utilities represented by AGD and UGD for not sharing the savings from buying gas at today's low prices with their residential consumers when the utilities present themselves as protectors "of the economic well being of the millions of natural gas consumers."
 Text of the letter is attached.
 Apache Corp. is among the top ten independent oil and gas producers in the United States. Its securities are traded on the New York and Midwest Stock Exchanges (symbol APA).
 February 5, 1992
 The Honorable James D. Watkins
 Secretary
 U.S. Department of Energy
 1000 Independence Avenue, SW
 Washington, DC 20585
 Dear Mr. Secretary:
 Here's an idea which may prove helpful in assisting the plight of the local natural gas distribution companies who purport to represent "the economic well being of the millions of natural gas consumers," and in turn purportedly are representeerence copy enclosed.)
 I might have had this idea sooner and been able to help more quickly, except for my understanding that the distribution companies seemed to be doing a lot better than the consumers they're worried about, and certainly better than the producers, states, royalty owners, and workers who've seen their gas prices drop from an average of $2.66 per Mcf in 1984 to $1.00 on the spot market for February '92.
 You see during that period, the local distribution companies share of their charge to residential consumers of natural gas has increased from 36 percent of what is paid by the consumer to what looks like 63 percent in February 1992.
 And then we took a look at what the producer gets paid for an Mcf of natural gas in other producing nations versus in the U.S. United Kingdom, $2.65; Norway, with enough gas to last over 100 years versus around 10 in the U.S., $2.86; Netherlands, $2.66; and France, $2.76.
 But anyway, here's a way you might help those poor monopolies whose definition of a free market apparently is one in which the buyer sitting behind the barricade of a guaranteed profitable rate of return is free, month after month, to tell the producers, "Here's what we'll pay; take it or leave it."
 My idea gets rid of the garbage talk of "free market" and just provides natural gas to them free. With free gas, provided the pipelines don't want more money for hauling less gas, the local utilities could entirely eliminate their commodity cost to the producer, increase their share of the consumer price from 63 percent to 80 percent, and charge it all to the taxpayer. They might even be able to use the extra cash flow to go into more unrelated businesses and offset some of the jobs lost in exploration and production.
 Here's how you work it. By March, when those fellas insist they hear from you, the wellhead prices would appear by the NYMEX to be headed to around $0.90 per Mcf at the well head. The $0.90 equates to the $0.90 per Mcf subsidy in the form of a tax credit for providing coal seam gas to that market. Since the $0.90 subsidy probably exceeds the cash costs of producing the gas and since it's only fair we have a "level playing field," just get the owners of the tax credits good for years and years to donate the gas to the local distribution companies (LDCs). If those poor LDCs would register as self-righteous 501(C)3 charities, the donors might get a further subsidy in the form of a charitable deduction.
 This idea might also help incumbent politicians anxious to sun along the Potomac. With no cost for natural gas, the inflation statistics would look better, and free gas could spur the economy.
 What about more lost jobs in the producing states, tax revenues for schools, ranchers and farmers who lease their land for gas exploration and the royalty owners? Well government might need to subsidize them a bit more, but everybody is used to that. At least the subsidy doesn't show up in the social costs charged to the commodity -- just in the deficit.
 Now there is one problem, Mr. Secretary, and that's the further erosion of the contribution of good jobs to self-support and self- respect with usefulness to a healthy society. I'm not sure how you handle that -- perhaps a little more tax credit against no income to make a one-time purchase of a first home.
 There are some pretty hurt, angry people out here who'd like to think that supplying domestic energy at less than a third of what we pay to import it works for America and ought to provide for jobs and self-respect for Americans.
 I won't attach a time ultimatum to this letter, Mr. Secretary.
 On a different topic, Mr. Secretary, today I received, and appreciate your personal invitation to continue as a member of the National Petroleum Council for the term expiring November 27, 1993.
 Despite genuine respect for you and your efforts to obtain a viable U.S. energy policy, I decline to serve for reasons I'm sure you understand. Thank you. Very truly yours, Raymond Plank
 -0- 2/6/92
 /CONTACT: Jeanne Buchanan of Apache, 303-837-5017/
 (APA) CO: Apache Corp. ST: Colorado IN: OIL SU:


BB -- DV007 -- 7723 02/06/92 12:16 EST
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Date:Feb 6, 1992
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