Earlier this month, I posted about how some big businesses are getting into natural gas vehicles in a big way after Chevrolet and Ram announced that they will build natural gas pickups and GE and Chesapeake Energy announceda project to develop fueling technologies for NGVs.

On Wednesday, Cummins Inc, which designs, manufactures, distributes and services engines, announced that it has begun development of a 15-liter Heavy-Duty, spark-ignited natural gas engine to meet demand for on-highway applications. Their statement says that Cummins believes that there is a strong market for engines powered by an alternative to diesel fuel.

Their press release states, “The ISX15 G will be based on the industry-leading ISX15 diesel engine and will build on Cummins technology leadership with spark-ignited, Stoichiometric cooled Exhaust Gas Recirculation (SEGR) technology. A simple, maintenance-free Three-Way Catalyst will be the only required exhaust after treatment. The engine will run on compressed natural gas, liquefied natural gas or biomethane. Cummins ISX15 G is expected to be in limited production by 2014.”

Cummins has been investing significantly in the development of natural gas engines and is already producing on-highway spark-ignited natural gas engines for Cummins Westport, its joint venture with Westport Innovations in Vancouver, British Columbia. Engines offered by Cummins Westport range in size from 5.9 liters to the recently announced 12-liter ISX12 G, which will begin production in 2013.

America’s natural gas utilities encouraged these manufacturers to make these investments.

Several AGA member companies, including AGL Resources, SoCal Gas, and Questar Gas, are investing their own resources in systems to refuel natural gas vehicles and plan to support these manufacturers by purchasing the NGVs they are making for their own fleets.

Our nation’s business leaders are investing capital in these projects because they understand the tremendous market potential for natural gas vehicles.  This flurry of activity should send a message to other potential actors that there is a market is for transportation that runs on clean, domestic, abundant natural gas.

Last week, CPS Energy, the nation’s largest municipally-owned natural gas and electric utility, announced that it has entered into an agreement to purchase an existing natural gas plant.  Rio Nogales, located in Seguin, Texas, is an 800 megawatt combined-cycle gas plant that will replace the energy output of J.T. Deely, a two-unit coal plant, planned to come offline in 2018.

In comparison to the Deely Power Plant, a natural gas combined-cycle plant uses approximately one-half the water, emits approximately one-half the carbon dioxide, emits approximately one-third of the ozone-forming nitrogen oxide emissions, has virtually no sulfur dioxide, mercury, and particulate matter emissions, and has no ash by-product to dispose of, reducing recycling efforts.

“Natural gas is a clean fuel and there is plenty of it in the ground in Texas. CPS Energy’s purchase of an existing plant is a smart move for its ratepayers and the timing could not be more right,” said Dave McCurdy, president and CEO of the American Gas Association.

The U.S. Energy Information Administration currently projects more than 30 gigawatts of future coal retirements over the next decade.  New electric generation capacity in the coming decades will likely use natural gas, and many new power plants will use highly efficient combined-cycle technology, which uses less natural gas to generate electricity.  This new demand can be met with adequate natural gas supplies.  North America’s abundant natural gas resources will continue to help meet our nation’s energy needs, from new electric generation, new natural gas vehicles, to the direct use of natural gas in homes and businesses for heating and cooking.

J.D. Power and Associates released the results of their 2012 Gas Utility Business Customer Satisfaction Study and we are proud to say that satisfaction with communications from gas utilities has improved significantly among business customers.  This has contributed to a notable increase in overall satisfaction.

AGA members CenterPoint Energy, New Jersey Natural Gas, NW Natural, Texas Gas Service; and Wisconsin Public Service were each ranked highest in their respective regions in satisfying gas utility business customers.

According to the press release on the study, the aspects of communications that have improved most from 2011 are education about important natural gas safety issues and issues that are important to the business.  In addition:

• The percentage of customers who recall receiving a communication from their utility has increased.
• Satisfaction with billing and payment has improved notably.
• Customers who receive e-bills are considerably more satisfied with billing and payment than are customers who receive paper bills.
• Satisfaction with bill payment at the utility’s website has increased considerably.

Now in its seventh year, the study measures business customer satisfaction with their gas utility company in four regions: East, Midwest, South and West. Satisfaction is measured by examining six factors: billing and payment; corporate citizenship; price; communications; customer service; and field service.

The Henry Hub Spot Price for Natural Gas today is $2.15 per MMBtu.  Strong domestic supplies and modest demand, of course, are the principal reasons why acquisition prices remain low. With that said, market fundamentals on the supply side, particularly the decline in gas-directed rig counts, appear to be influencing some analytical outlooks, which now point to strengthening Henry Hub prices as the year moves forward. However, to place the outlooks in context, strengthening prices mean averages that may push closer to $3.00 per MMBtu by year-end 2012 and perhaps $3.50 in 2013, reflecting a continued trend toward relative price stability for the near-term.

Without repeating what has been said over and over during the past several months regarding prevailing natural gas market conditions, perhaps the two most watched industry metrics for the coming months will be the pace at which domestic natural gas production responds to the market balancing influence of reduced gas-directed rig activity and the continued momentum associated with natural gas’ capture (from coal) of base and incremental power generation requirements this summer. Flat or decreasing domestic production should lead to pricing increases at the wellhead if summer cooling loads so influence the market. On the other hand, the relatively high level of working gas in storage at season’s end means less will be necessary for daily injections and this could have a moderating impact on price rationalization in an adjusting market.

Visit this link to download the full Natural Gas Market Indicators.  Topics covered include: weather, working gas in underground storage, natural gas production, shale gas, rig counts, pipeline imports and exports, LNG markets, and a summary of the natural gas market.

AGA will hold conference call for any interested reader of the Natural Gas Market Indicators on Monday April 2, 2012 from 2:00-3:00pm eastern time to discuss the post 2011-2012 winter heating season.  The call can be accessed by dialing 832-431-3335, participant code 9071373#.

The March 30, 2012 Natural Gas Market Indicators will be reviewed briefly, then the conference will be opened to any questions callers may have regarding the report or other natural gas topics. AGA’s Policy and Analysis staff will host the call, and related questions or discussion. Please take this opportunity to interact with NGMI content developers and other key AGA staff members.