Intelligence brief: EIA sees strong future for gas in non-CPP scenario; Duke proposes building plant on campus
Gas industry news you need to know
Natural gas has strong case in all EIA scenarios
The rise of natural gas in the US energy mix will suffer only a minor blow in the event the Clean Power Plan is never implemented, the Energy Information Administration has forecast in its Annual Energy Outlook.
Natural gas’ share of US primary energy consumption will rise from 29% in 2015 to 33% in 2040 under the EIA’s reference case, which assumes CPP implementation. In the event of non-implementation, natural gas will command 32% of energy consumption.
In electricity generation, the share of natural gas is expected to rise to 38% if the CPP is implemented and 34% in the non-CPP scenario; coal is seen falling from 33% to 18% under the CPP but will find support at 26% in a non-CPP scenario.
The Supreme Court voted 5-4 in February to halt the CPP, which had set out a plan to lower CO2 emissions from power generation by 32% in 2030 compared to 2005 levels.
In the EIA’s reference case, domestic natural gas production will grow more than 50% between 2015 and 2040. Annual average natural gas prices will rise from the 2015 level of $2.62 per million British thermal units (MMBtu) at the benchmark Henry Hub to about $5/MMBtu in the mid-2020s and remain at around that level through to 2040, it predicted. Technology improvements are expected to allow natural gas production to rise even as prices stabilize.
Natural gas will play almost as much of a role in US energy consumption in a non-CCP scenario as in a CPP scenario (Image credit: EIA)
Duke Energy proposes plant on university campus
Duke Energy and Duke University have proposed building a $55 million, 21-megawatt natural-gas combined heat and power (CHP) facility on the Duke University campus in Durham, North Carolina.
Subject to approval by the North Carolina Utilities Commission, the plant would use the waste heat from generating electricity to produce thermal energy and steam needed for the university. The electric power would be put back on the Duke Energy electric grid to serve the university and nearby customers, lowering the university’s carbon emissions by about 25%.
In addition to 21 MW of power, the facility would be capable of producing roughly 75,000 pounds-per-hour of steam, which would be sold to Duke University for heating water, among other things. The CHP facility would be connected to an existing Duke Energy substation located on the campus, which serves the university and its medical center as well as other customers.
A group calling itself the Duke Climate Coalition came out against the proposal, saying that further investments in fossil fuels were not the answer to climate change.
Duke Energy and Duke University are separate organizations. Both have a connection to noted businessman James B. Duke (1856-1925).
Global investor Citadel buys into western US pipeline
Global investment firm Citadel has agreed to acquire a portfolio of natural-gas pipeline transportation capacity around Colorado’s Piceance Basin from WPX Energy for about $239 million.
The acquisition is expected to close in the third quarter of 2016. Upon closing, WPX will release all of its Piceance-related firm transportation capacity across four interstate pipeline systems to Citadel, WPX said in a statement to the US Securities and Exchange Commission.
In April, WPX closed the sale of its wholly owned subsidiary WPX Energy Rocky Mountain to Terra Energy Partners for $910 million. WPX Energy Rocky Mountain held all of WPX’s Piceance Basin assets. The agreement required Terra to become responsible for about $104 million in transportation obligations.