Natural Gas Glut Only Temporary

Today's Washington Post fronted a story in the business section about a possible glut in the U.S. market for natural gas, but as we noted more than a week ago, long-term trends are headed in the other direction:

Most energy analysts, however, see the bulge in natural gas supplies as temporary. "We have a little bit of a reprieve, but I don't think it's a sustainable reprieve," said John Dearborn, vice president for global energy at Dow Chemical Co., a major natural gas user. "We have been able to build up inventories faster than in years prior, but that's no indication of where gas inventories are going to end up. If we have a warm summer and a normal-to-cold winter, we will find ourselves back in the position we were in last winter."

Most players in futures markets agree. Prices for natural gas to be delivered in January stand at $11.10 a thousand cubic feet, what Dearborn calls "the danger area" for consumers like Dow Chemical.

Most oil and gas companies and natural-gas-producing countries are going ahead with plans to meet demand that they expect to rise quickly over the next five to 15 years. In the United States, Sieminski noted, consumption of natural gas is expected to rise by about 30 percent by 2020. Since domestic natural gas production is essentially flat, most of the supply needed to meet that demand is expected to come from abroad in the form of LNG.

Pat Cleary has some thoughts on the subject too.

Technorati tags: Energy, Electricity, Natural Gas

Comments

Fluor Invests in NuScale

You know, it’s kind of sad that no one is willing to invest in nuclear energy anymore. Wait, what? NuScale Power celebrated the news of its company-saving $30 million investment from Fluor Corp. Thursday morning with a press conference in Washington, D.C. Fluor is a design, engineering and construction company involved with some 20 plants in the 70s and 80s, but it has not held interest in a nuclear energy company until now. Fluor, which has deep roots in the nuclear industry, is betting big on small-scale nuclear energy with its NuScale investment. "It's become a serious contender in the last decade or so," John Hopkins, [Fluor’s group president in charge of new ventures], said. And that brings us to NuScale, which had run into some dark days – maybe not as dark as, say, Solyndra, but dire enough : Earlier this year, the Securities Exchange Commission filed an action against NuScale's lead investor, The Michael Kenwood Group. The firm "misap

An Ohio School Board Is Working to Save Nuclear Plants

Ohio faces a decision soon about its two nuclear reactors, Davis-Besse and Perry, and on Wednesday, neighbors of one of those plants issued a cry for help. The reactors’ problem is that the price of electricity they sell on the high-voltage grid is depressed, mostly because of a surplus of natural gas. And the reactors do not get any revenue for the other benefits they provide. Some of those benefits are regional – emissions-free electricity, reliability with months of fuel on-site, and diversity in case of problems or price spikes with gas or coal, state and federal payroll taxes, and national economic stimulus as the plants buy fuel, supplies and services. Some of the benefits are highly localized, including employment and property taxes. One locality is already feeling the pinch: Oak Harbor on Lake Erie, home to Davis-Besse. The town has a middle school in a building that is 106 years old, and an elementary school from the 1950s, and on May 2 was scheduled to have a referendu

Wednesday Update

From NEI’s Japan micro-site: NRC, Industry Concur on Many Post-Fukushima Actions Industry/Regulatory/Political Issues • There is a “great deal of alignment” between the U.S. Nuclear Regulatory Commission and the industry on initial steps to take at America’s nuclear energy facilities in response to the nuclear accident in Japan, Charles Pardee, the chief operating officer of Exelon Generation Co., said at an agency briefing today. The briefing gave stakeholders an opportunity to discuss staff recommendations for near-term actions the agency may take at U.S. facilities. PowerPoint slides from the meeting are on the NRC website. • The International Atomic Energy Agency board has approved a plan that calls for inspectors to evaluate reactor safety at nuclear energy facilities every three years. Governments may opt out of having their country’s facilities inspected. Also approved were plans to maintain a rapid response team of experts ready to assist facility operators recoverin

NEI Nuclear Notes

Search This Blog