Tuesday -- March 10, 2015

Active rigs:

	3/10/2015	03/10/2014	03/10/2013	03/10/2012	03/10/2011
Active Rigs	114	191	187	206	172

RBN Energy: optimizing New England natural gas pipeline capacity.

Does it make sense to build natural gas pipeline capacity that will only be used a few weeks a year?

That’s a question that continues to spark debate in New England, where the existing pipeline network is sufficient most of the year but unable to supply the region’s growing number of gas-fired power plants during the coldest winter days. What’s the answer? Building gas pipeline capacity that will remain largely unused? Relying on oil and LNG as a permanent gas-supply backup for power generators? Or maybe building pipeline capacity to provide not only peak, wintertime service to generators but off-peak service to LNG exporters? Today, we continue our look at a vexing dilemma with major implications for Marcellus gas producers.

Much like Texas, New England considers itself as a unique part of the U.S., with its own food (lobster, chowder, baked beans), sports quirks (singing Neil Diamond’s “Sweet Caroline” in the middle of the eighth inning at Fenway), and an affinity for Subarus, sailboats and Sam Adams beer. As far as the energy world is concerned, though, what sets New England apart is a growing desire for natural gas (as a replacement for coal), coupled with a gas pipeline network that many say is no longer up to snuff. As we said in Episode 1, the region’s much-discussed pipeline capacity shortfalls have been largely mitigated this winter because power generators—encouraged by low oil prices and incentives (from ISO New England, the operator of the electric grid) to lock in backup supplies of oil and LNG—have been ready, willing and able to switch their dual-fuel power plants away from piped-in gas and onto oil and LNG-sourced gas if market conditions warrant. Still, many say, wouldn’t it be better for New England to have the gas pipeline capacity it needs to meet its peak winter needs?

After all, vast volumes of inexpensive Marcellus gas are close at hand in northeastern Pennsylvania.

Disclaimer: this is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here or think you may have read here.

Less blogging: the granddaughters have this week off -- spring break. I will not be blogging much during the day, but will try to catch up in the evening. I will not get to all e-mails in a timely manner.

Mood: my feelings about the Bakken wax and wane, more optimistic / less optimistic due to the slump in the price of oil, so my postings/opinions may seem schizoid.

Errors: even in the best of times, I make typographical and factual errors. When I have less time to blog, I will make even more typographical and factual errors. I often blog on the run, and only later look for errors. I correct them when I find them. If something seems wrong on the blog, it probably is wrong. If anything I post is important to you, go to the source. I generally link to the source. If I foreg to link, a google search will usually find the source. Do not trust this site; there are typographical and factual errors, but never on purpose. 

Apple: Apple fans have already seen the Apple Watch presentation from yesterday. For non-Apple fans who have not seen this presentation, I heartily recommend it. The presentation is optimized to play on the Safari browser and may not work well on other browsers. It's a long, long presentation, but if it works right on your browser you can easily skip to the sections you want to review. The engineering of the "new" MacBook is absolutely incredible. I play the video in the background while doing other internet tasks.