Electric Power Plants to Drive U.S. NatGas Demand
The reason the price of natural gas is so low, as we’ve long pointed out, is simple economics. Supply and demand. We have a steady-to-slightly-increasing demand, but we have a whole boatload of new supply–thanks to the miracle of hydraulic fracturing. How does this supply/demand imbalance get corrected? You either need more demand, or less supply. We can assure you the less-supply thing ain’t happenin’. That leaves more demand. Yes, there is some interest from other countries who want our cheap natural gas. But let’s face it–we need to create more demand right here at home. Will that happen any time soon? Perhaps. We’d long hoped that natural gas vehicles would come along to dramatically increase demand of our domestic gas. So far, that hasn’t happened. NGVs haven’t taken off. But there is one source that can’t seem to get enough natgas: electric power generation. Coal plants are shutting down at an alarming rate, thanks to Obama’s war on coal. Nuclear plants are also shutting down because they can’t compete with cheap natgas. The fantastic trend recently has been the planning and building of new natgas-fired electric plants. Will demand for natgas-fired electricity continue to grow? For a partial answer to that, we turn to the number crunchers at our favorite government agency, the U.S Energy Information Administration…
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Both Energy Transfer Equity (ETE) and Williams yesterday issued statements about their proposed/impending merger that say Form S-4 filed with the Securities and Exchange Commission (SEC) has been ruled “effective.” As we so often point out, we’re not Wall Street wizards. From what we can determine, an S-4 is a filing between companies that propose to merge. The SEC is (we think) saying that the proposed stock swap between ETE and Williams can move forward, when and if the merger closes. That is, the SEC is cool with the proposed plan to merge. ETE points out there are still roadblocks to such a merger, and Williams continues to press several lawsuits to force ETE into the merger they (ETE) wanted in the first place. Below we have yesterday’s statement about the S-4 along with ETE’s continued “but but but” statement. We also include some interesting and insightful analysis from a writer on the Seeking Alpha investors website…
In February Shell completed the merger with/purchase of BG Group–the largest such megamerger since Exxon bought Mobil in the 1990s (see 
Last July MDN told you about a group of so-called religious leaders from the Boston area who have taken to worshiping Mother Earth (the creation) instead of worshiping the Creator (see 
The climate changer crazies were in full regalia outside of the Dallas, TX facility where Exxon Mobil was holding its annual meeting yesterday morning. Sporting signs that said “Keep It in the Ground” and “System Change not Climate Change” (which was from “an ecosocialist coalition”) and many others, these nutjobs shouted at investors filing in to the facility. Christopher Helman, a reporter from Forbes, was on hand–both inside the meeting and outside to talk with the crazies (give that man hazard pay!). Helman files this report…
As MDN has previously pointed out, even during the downturn in the oil and gas market, there is at least one sub-sector that’s expanding: wastewater. Long after a well is drilled and fracked, once it begins producing, that well will continue to produce not only natural gas and/or oil and other hydrocarbons–it will also produce water from the depths. We’re not talking about groundwater or aquifers that sit several hundred feet down. Those water sources are well-protected by well casing. There is also abundant supplies of mineral-laden water deep in the earth that comes out of the borehole for years after a well is drilled. When drillers were sinking holes as fast as they could–and fracking them–that salty/minerally water from the depths (often called brine or saltwater) would be recycled and used for more drilling. But when there’s little or no drilling–what do you do with all that brine/wastewater? You still have to get rid of it. So the wastewater hauling/recycling/disposal industry is actually expanding. BlueJack Energy Solutions is one such new company, begun to service several shale plays including the Marcellus/Utica. Yesterday BlueJack announced it has received $100 million in investment capital from Energy Spectrum Partners–to help get the company launched quickly and into a full gallop…
In April MDN brought you the news that Mountaineer NGL Storage launched a non-binding open season for drillers who want to reserve storage capacity in a new underground storage facility to be built in Monroe County, Ohio, near Clarington, along the Ohio River (see 
In December MDN called attention to a newly published study by researchers at Dartmouth College (see 
You know what magical thinking is? It’s when an analyst/consultant repeatedly predicted that the world had reached “peak oil” production and that oil production was/will soon decline, leading to insanely high prices for oil. Then the shale revolution happened. Oops. So much for the discredited “peak oil” theory. But the same analyst, for a long time, kept repeating his discredited theory. We call that magical thinking. That same analyst then predicted “peak natural gas”–that the shale revolution was a bubble and would soon end because shale wells peter out so quickly, dontcha know. The analyst never factored new technology, and new shale layers, would be discovered. Oops. More magical thinking. Now that same analyst says cheap shale gas will end soon–the price is about to go insanely high. Yet more magical thinking…
In the end, it was John Quigley’s own hubris that resulted in his demise as Secretary of the Pennsylvania Dept. of Environmental Protection. As we reported yesterday, last Friday Sec. Quigley suddenly resigned his position (see 
Forget about a cracker plant in West Virginia. Well, not really–just put it on the back burner for the moment. A researcher from West Virginia University says what the Mountain State and indeed all of Appalachia really needs is ethane storage. Specifically, an ethane storage hub. According to Brian Anderson, director of West Virginia University’s Energy Institute, without ethane storage (and pipelines) the Marcellus/Utica region risks seeing its abundant ethane leave the area, mostly heading to the Gulf Coast. Why is that bad? Because if we can keep ethane in the area, we will attract manufacturers to the region who want to use the results of that ethane–ethylene, the raw material in plastics. Our region can realize a bonanza in manufacturing jobs and investments–if we can store and use the ethane here, at home…
