Marcellus Shale Gas May Soon be Exported – To California
In an astonishing reversal, the operator of a natural gas pipeline that spans the United States is proposing to change the direction the gas flows through the pipeline in order to sell shale gas from the Eastern U.S., particularly the Marcellus, to the Midwest and Western U.S.
Kinder Morgan Energy Partners LP (KMP) billed its Rockies Express pipeline as a solution to the East Coast’s natural gas needs back when it started carrying gas from Colorado in 2009. Two years and one shale gas boom later, it turns out that Kinder Morgan may have had it backward.
The East Coast is now awash in gas, thanks to recent discoveries of shale gas, in particular the Marcellus shale in Pennsylvania. And Kinder Morgan now "stands ready" to reverse its pipeline to pump gas from the East Coast as far west as California, said Mark Kissel, president of Kinder’s western region.
If the company moves ahead with its reversal plan, an east-to-west pipeline would help smooth out a mismatch in supply and demand throughout trading hubs in San Francisco, Chicago, New York and elsewhere. That mismatch has created a disparity in pricing throughout the country, with utilities on the coasts often paying far more for fuel in volatile regional gas markets. A reversed Rockies Express could go a long way toward creating one gas price throughout the U.S. by removing those local gluts and shortages, said Cathy Landry, spokeswoman for the Interstate Natural Gas Association of America, a pipeline trade group.
"We’ll have more of a national price of natural gas," Landry said.*
*MarketWatch (Jul 6, 2011) – One price for US natural gas eyed