The University of Utah's cold-fusion research may or may not represent the energy of the future, but even its strongest proponents concede that fusion as a usable fuel source is many years away.
Natural gas, points out Questar Corp. Chairman R.D. Cash, "provides the answers today."Probably no one in the audience at Questar's annual meeting Tuesday would disagree with that assessment. As the diversified energy company celebrates this year the 60th anniversary of the arrival of natural gas in Utah, most believe that it is gas, not fusion, that is the real fuel of the future.
"Natural gas, Questar Corp., and our shareholders appear to be on the threshold of another period of opportunity," Cash told those gathered in the company's auditorium for the meeting.
The industry is no doubt impatient for that golden age to begin. Natural gas, along with the energy industry in general, has enjoyed anything but opportunity in the '80s, and 1988 was no exception.
Cash said earnings were hurt by low oil prices last year to where the company had to write down its oil and gas properties by $19.9 million after taxes - $1.03 per share - an action that lowered the properties' book value but had no effect on cash flow.
On the other hand, Questar subsidiary Mountain Fuel Supply Co. had net income of $20.4 million last year, up from $17.6 million a year earlier - all thanks to an 11 percent overall colder winter in '88 as compared to '87. Clearly, Questar shareholders need to "Think Cold" the way skiers "Think Snow."
In any case, the "challenges" that Questar has faced in this decade and the volatility that will likely continue to pervade the energy industry does not mean the company's optimism for the future isn't justified.
The key, said Cash, is this: "It (gas) is the cleanest-burning fossil fuel . . . is available in abundant quantities and at reasonable prices, and an efficient nationwide distribution system is in place. With these advantages, it's not surprising that gas usage nationally has increased 11 percent since 1986 - the largest two-year increase in nearly two decades."
Cash believes Questar has four basic strengths that will help the company lead the way in the resurgence of natural gas as the fuel of choice:
- A distinctive, integrated organization that offers flexibility in responding to changes in the marketplace.
- A combination of earnings stability from regulated businesses and the opportunity for higher returns as the energy industry recovers and new ventures progress.
- A strong financial position, including a consistent dividend, low debt and good cash flow.
- A superior work force.
These, along with the relatively low impact gas makes on the environment, is why Cash says, "I am feeling more positive about the corporation's outlook than I have in several years."
Following the meeting, Questar directors declared a quarterly dividend of 47 cents per share on the company's common stock, payable June 19 to shareholders of record May 26 - identical to the previous and year-ago quarters. Preferred stock dividends include $2 on the 8 percent series and $2.15625 on the $8.625 series, both payable June 3 to shareholders of record June 2.
Re-elected to Questar's 12-member board at Tuesday's meeting were Cash; James A Harmon, chairman, Wertheim Schroder & Co. Inc.; William N. Jones, president, Traco Manufacturing Ltd., chairman Lite Touch Corp. and chairman, board of trustees, Intermountain Health Care Inc.; Neal A. Maxwell, The Council of the Twelve, The Church of Jesus Christ of Latter-day Saints; Roy W. Simmons, chairman and chief executive officer, Zions Bancorp, chairman, Zions First National Bank.