Gas Beat Coal for Power Gen in March, EIA Data Shows

While net power generation output was down overall in March, gas-fired plants pummeled coal-fired plants as weak gas prices continue to favor the cleaner fuel, said the Energy Information Administration.
Over the last year the price of natural gas delivered to electric generators has fallen dramatically, EIA reports. Current natural gas prices now present increased potential for displacing coal-fired electricity generation with natural-gas-fired generation.
Because combined cycle natural-gas-fired electricity generators are generally more efficient than typical coal-fired units, consuming fewer btu of fuel per kilowatthour of electricity generated, natural gas prices do not need to fall as low as coal prices before substitution of natural gas becomes attractive. The delivered cost of coal is generally highest in the southeast region of the United States because of transportation costs from the coal-producing regions such as the Powder River Basin in Montana and Wyoming.
Consequently, the greatest potential for natural gas substitution for coal is expected in the East South Central and South Atlantic Census divisions, EIA said.
Changing View of Gas In Energy Mix, Chu Says
Given the breakthrough in obtaining economic natural gas supplies from shale, the federal government’s view of natural gas in the energy mix is becoming more bullish for the next 10 years, said U.S. Department of Energy Secretary Steven Chu. He spoke during a forum stressing renewables at the Western Governors’ Association annual meeting in Park City, Utah.
North American power generators are rethinking gas’s role over the next decade, Chu told the governors, which issued a new policy resolution on renewable development in the West.
California Gas Storage Project Applies at FERC
The backers of the proposed Tricor Ten Section Hub LLC underground natural gas storage project in California filed an application with Federal Energy Regulatory Commission, seeking a certificate for their project by February. They launched a nonbinding open season in early June.
They seek to operate a high-deliverability, multi-cycle storage facility in Kern County, 10 miles southwest of Bakersfield.
Low Prices Force EnCana to Shut Wells
Because of low natural gas prices EnCana Corp. shut in wells in both the U.S. and Canada that produce “a couple of hundred million cubic feet a day,” said CEO Randy Eresman.
Encana, North America’s largest natural gas producer, has chosen not to bring some new wells on stream and has shut in other wells where it costs more to produce the gas than it can be sold for, Eresman, said.
Midcontinent Express ‘Close’ to Completion
Midcontinent Express Pipeline LLC asked FERC for the go-ahead to begin service at compressor and booster stations on the 507-mile pipeline that is slated for operation by Aug. 1.
The $1.25 billion pipeline project will provide market access to shale gas producers in Oklahoma.
The pipeline originates near Bennington and is routed through Perryville, La., and terminate at an interconnect with Transco in Butler, Ala. It will have an initial capacity of 1.4 billion cubic feet per day.
Phase 1 began interim service in April on 266 miles of 42-inch pipeline from the interconnects with Houston Pipe Line Co. and Natural Gas Pipeline Co. of America.
API: Oil, Gas Top Spender
Domestic oil and natural gas companies invested $58.4 billion between 2000 and 2008 in technologies to reduce greenhouse gas emissions, said the American Petroleum Institute.
Those invested funds are more than was invested by either the federal government or by all other U.S.-based private industries combined, according the study, commissioned by API.
Texas Drilling, Employment Falter
Drilling activity in Texas declined steadily through April, reflecting “very weak natural gas markets and defying a crude price rally,” according to the Texas Petro Index, issued earlier this month.
Employment in the state’s exploration and production industry has dropped to its lowest level since January 2008.



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