Gas is abundant, and gas pipeline companies are rapidly identifying and pursuing new investments to bring this resource to consumers throughout the United States. In the first quarter of 2012, a number of gas companies announced investment plans to build the gathering line infrastructure required to bring abundant shale gas and natural gas liquids to market. In some cases, gas infrastructure investments are being made to accommodate increased demand for gas-fired power generation. In other cases, utilities and transmission companies see new opportunities to harness increasing gas supplies from their neighborhood shale plays and transport them to consumers within and outside of their traditional service territory.
For example, ONEOK Partners announced last week that it will invest more than $140 million to construct a 270-mile natural gas gathering system going into the Bakken shale. The system will create new opportunities for Bakken and Three Forks producers to process and deliver natural gas to the marketplace. ONEOK will also spend more than $1.5 billion between 2011 and 2014 to support its natural gas and natural gas liquids businesses, including an additional 500-mile natural gas liquids pipeline. Last month, NiSource Gas Transmission & Storage announced similar plans for bringing gas to market from the Marcellus and Utica shales, two areas where shale deposits have created potentially vast new gas supplies for the northeastern United States. The company’s Pennsylvania Marcellus Pipeline project will invest about $145 million to bring 300,000 dekatherms per day of new capacity onto its system and connect to multiple interstate pipelines.
A number of companies have sought authorizations from the Federal Energy Regulatory Commission (FERC) to expand storage, processing, transportation, and trading hub facilities to interconnect with major interstate pipelines. Recently, FERC authorized Hope Gas Inc., a local gas distribution company, and Hinshaw to build new facilities to take gas from several producers in the Marcellus region for delivery to three major interstate systems. FERC’s approval anticipates that E&P activity in the West Virginia Marcellus will create enough supply in the next few years to outstrip demand on Hope’s LDC system and in West Virginia as a whole! We can expect FERC to remain active in reviewing such projects in 2012 and 2013.
To learn more about our country’s abundant natural gas resources, check out AGA’s most recent Energy Analysis report discussing findings on U.S. 2011 Natural Gas Reserves and a recent snapshot of natural gas trends going into 2012.
AGA released a press statement supporting the Federal Energy Regulatory Commission’s efforts to bring the gas-electric coordination discussion to the top of its policymaking agenda. FERC has opened up a new proceeding (or “docket”) on its website (Docket No. AD12-12-000) to receive public comments on gas-electric issues and to determine where and how FERC can play an important role in facilitating stakeholder discussions. A variety of factors have spurred this outreach effort by FERC, including the increasing use of natural gas for power generation and recent events like the February 2011 Southwest power outages.
While FERC typically seeks public comments proposals to regulate the energy industry, AD12-12-000 is a discussion docket that will house responses by interested parties to specific requests by Commissioner Phillip Moeller and Commissioner Cheryl LaFleur. Commissioner Moeller has released a statement seeking comments on gas-electric coordination, and Commissioner LaFleur has followed with requests for comments on five specific areas which may be addressed in Docket No. AD12-12-000. Comments from the public in response to both Commissioners’ requests are due on March 30, 2012.
FERC has also collaborated with the National Association of Regulatory Utility Commissioners (NARUC) to plan recommendations for improving coordination among the natural gas and power markets. At the recent NARUC winter meetings, Chairman Jon Wellinghoff, Commissioner John Norris and Commissioner LaFleur participated in a gas-electric scenario exercise to simulate a cold-weather gas shortage event that could impact power supply. The participants in this “emerging issues” collaborative included a representative from National Fuel Gas, an AGA member company serving Western New York and Pennsylvania. Soon after this meeting, Commissioner Moeller stated that “Although comprehensive solutions may take longer to implement, we must make actual improvements to the system now,” and added that “national and regional policies need to be advanced prior to the next heating season.”
Stay tuned for comments to FERC from AGA, to be filed on March 30, 2012.
Earlier this year, Exelon Corp.’s chairman and CEO stated that “natural gas is Queen.” Now, Exxon Mobil reports that in fact, gas is King. In the latest energy outlook report from Exxon, natural gas is projected to replace Old King Coal as the top fuel choice for power generation in the United States by 2025, and will also become the world’s No. 2 overall fuel source.
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Thanks to the “take care” clause in our Constitution, our Presidents have exercised varying degrees of authority to enforce laws and implement executive branch policies through Executive Orders. While many an order has incited political and legal controversy for taking over Congress’s role, some orders stick to their original purposes (also heavily debated)— to give direction to agencies overseen by the Administration and generally manage the federal government’s operations.
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