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Bloomberg Government has published The Twilight of Coal Power?, an assessment of how EPA’s new greenhouse gas rules might affect coal-fired power plants. The report concludes that although coal will remain in the energy mix for decades due to existing plants, the EPA’s new rule will effectively ban new coal plants. The new rules require that fossil plants not exceed 1,000 lbs. of CO2/MWh. Scott Segal, executive director of the Electric Reliability Coordinating Council, which represents utility interests, warns that EPA’s rule will disrupt utility hedging by eliminating coal from the fuel mix and “depriving the market of its flexibility.”… [more]
View InsightThe Bureau of Land Management (BLM), an arm of the Department of the Interior (DOI), last updated its hydraulic fracturing (“fracking”) rules in 1988, before many current technologies and techniques were adopted. Now, after more than 20 years, BLM has released a set of proposed changes to the regulations, including a requirement for disclosure of the chemicals used in fracking on federal lands, and standards for gas well construction. Currently, most fracking occurs on private lands, and is subject only to state regulations. A recent report found that only 5% of active shale wells in the past decade were on… [more]
View InsightDomestic natural gas production continues to expand, while natural gas spot prices are at historic lows. Many utilities are responding to these changing market dynamics by building gas plants or “fuel-switching” existing power plants from more expensive fuels to gas. As a result, coal generation continues to fall. Due in part to price competition with natural gas, some Congressional “clean energy” subsidies may not be renewed. EIA projections suggest that domestic production will continue to increase, and that natural gas prices faced by electric utilities will remain below $7.00/mBtu, through 2035. [Source: EIA] What does near- to mid-term domestic natural… [more]
View InsightThree recent efforts – two private, and one public – could shape the future of U.S. shale gas and oil development. The Marcellus Shale Coalition (MSC), an industry group, released Recommended Practices: Site Planning, Development and Restoration, offering general guidance for natural gas professionals developing or restoring shale plays in the Marcellus. Days later, the Appalachian Shale Responsible Producers Group (ASRPG), led by Andarko Energy, released their Recommended Standards and Practices, which again provides general guidance to well operators and shale play developers. Ohio Governor John Kasich has pushed legislation to the state’s legislature that the his office hopes will… [more]
View InsightIn an April 26th speech to business leaders at the U.S. Chamber of Commerce, Nick Akins, President and CEO of American Electric Power, urged the U.S. to develop a comprehensive energy policy. Akins explained that a recent “perfect storm of circumstances” – including EPA regulations, diminished reliance on nuclear power, and low natural gas prices – are making natural gas the de facto favored fuel for power generation. This is a concern for Akins, who points out that natural gas prices have been volatile historically, and that relying on a single fuel source for power generation is risky. [Columbia Dispatch]… [more]
View InsightAs American natural gas production continues to increase, the U.S. Department of Energy (DOE) is considering a greater number of applications from companies interested in exporting liquefied natural gas (LNG). At the same time, the Federal Energy Regulatory Commission (FERC) is seeing more applications from companies seeking to build new LNG export terminals and liquefaction facilities. Currently, the U.S. only exports LNG internationally by exporting natural gas imported from other countries, a practice that increased in 2011. So far, nearly all applications to export U.S. LNG to Free Trade Agreement (FTA) countries – eighteen countries including Australia, Canada, Chile, Israel,… [more]
View InsightLast week the EIA reported that natural gas-fired power generation will increase by as much as 17% in 2012, while coal is expected to decrease 10%. This shift away from coal and toward natural gas is largely tied to gas’ low price, as well as projections of the impacts of increasingly strict federal regulation on power plants. In March, natural gas spot prices averaged $2.18MMBtu, their lowest level since 1999. Then on April 11th, the NYMEX May gas futures contract settled at a 10-year low of $1.984/MMBtu [EIA]. Despite low gas prices, some utilities express hesitancy about over-committing to gas-generated… [more]
View InsightLast week President Obama signed an executive order to coordinate the Administration’s activities on natural gas development. The order will convene the Interagency Working Group to Support Safe and Responsible Development of Unconventional Domestic Natural Gas Resources, and will bring together at least 13 federal agencies. The working group will coordinate interagency policy, work to share scientific, environmental, technical and economic information, and engage in long term planning with regards to research, natural resource assessment, and the development of infrastructure. The order states that “States are the primary regulators of onshore oil and gas activities,” but that “the Federal Government… [more]
View InsightA Citigroup analysis of North American oil production suggests that the continent could become the “new Middle East.” The report, ENERGY 2020: North America, the New Middle East?, projects increased oil production as having significant effects throughout North American economies, with an increase in the United States’ real GDP of 2.0 to 3.3% from new production, reduced consumption, and associated activity. The report points out that “the main obstacles to developing a North American oil surplus are political rather than geological or technological.” In response to the growth in shale development, state and federal governments are crafting regulations to address… [more]
View InsightA recent op-ed by noted academic Bjorn Lomborg questions the idea that renewable energy – wind, in particular – is up to the task of mitigating climate change. Renewables are not cost-competitive with traditional energy sources, he argues; and because renewables are intermittent and must be backed-up by base-load or peaker power plants, their true costs per kWh is often understated and their CO2 reduction potential overstated. Much of Lomborg’s argument focuses on the UK’s plan for a 20% reduction in CO2 by 2020 that, according to the op-ed, would require that wind account for 31% of the country’s electricity… [more]
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