Wednesday, September 30, 2015; In New England, Shale Gas Is Hard To Get -- WSJ; Putin To Obama: "Hit The Road, Jack"

Active rigs:

	9/30/2015	09/30/2014	09/30/2013	09/30/2012	09/30/2011
Active Rigs	68	190	184	190	201

The post-boom record low for active rigs (link here): 67. 

RBN Energy: LPG pipelines to Mexico.

The opening up of Mexico’s retail liquefied petroleum gas (LPG) market could provide significant opportunities for U.S. propane and butane producers, as well as midstream companies and exporters. If exports of U.S.- sourced LPG are to increase, though, it would help to have a more robust and efficient system than presently exists for transporting the fuel to the U.S.-Mexico border and, from there, to key LPG consumption markets within Mexico. Today, we continue our look at Mexican LPG imports with a review of existing and planned pipelines.

As we said in Episode 1 of this series, Mexico is the world’s seventh-largest consumer of LPG; it uses 280 Mb/d, on average, about 60% of that use is residential, 14% commercial and 9% industrial, including petrochemical production (another 10% is for LPG use as a fuel for trucks and cars). About two-thirds of the LPG consumed in Mexico is produced within that country; the rest (about 93 Mb/d) is imported, with about 70% of imports (66 Mb/d; or nearly one-fourth of Mexico’s total needs) coming from the U.S. We also discussed the Mexican government’s plan—part of a larger energy sector deregulation effort—to eliminate (in January 2016) the current mandate that state-owned Petróleos Mexicanos (Pemex) serve as the middleman on all LPG imports to Mexico, and to end (in January 2017) the long-standing practice of a government-set retail LPG price. In Episode 2, we detailed the growing U.S. propane surplus headed for export markets as well as the LPG export facilities in place or being developed along the Texas coast, as well as Mexico’s increasing capacity to receive LPG by ship.

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The Road To New England -- Via Yemen

Updates

Later, 9:41 a.m. Central Time, from a reader, electric rates will increase this year in New Hampshire, but not as bad as last year.

For most New Hampshire residents, electricity should be less expensive this winter than last. At least, that's the indication based on recent rate requests from some of the state's largest electric utilities.

In New England, not enough natural gas pipelines feed a region that increasingly burns gas for its electricity. This means that electricity prices rise as the winter heating season arrives, when people are firing up their furnaces a lot more frequently.

But judging from the rates utilities are asking for so far, prices will be lower than last winter. Eversource energy, which serves most electric customers in the state, says its winter rate will be up 15 percent from this summer, but one and a half percent lower than last winter, at 10.39 cents per kilowatt hour.

Original Post

 

The Wall Street Journal is reporting:

Natural gas is so abundant and cheap in much of the U.S. that producers want to export it overseas. Except in New England, where gas is so hard to get that companies are importing it from as far away as Yemen.

The U.S. shale boom that has produced a glut of gas—and helped lower many Americans’ home heating bills—has largely bypassed the energy-starved New England. Few pipelines are available to ferry gas from Pennsylvania and Ohio to Connecticut and Maine, and new lines proposed in the region won’t go into service until 2018, or later.
Gas plants currently supply 44% of New England’s electricity, up from just 18% in 2000. Consumers and businesses are also swapping their old furnaces that burn heating oil for newer models that run on gas.

So as the weather cools, problems loom.

When brutal cold hits this winter, energy prices will soar. In Massachusetts, the residential gas price was $14 per thousand cubic feet last January, more than 50% above the national average. At nearly 21 cents a kilowatt-hour, average first-quarter home electricity prices in New England were two-thirds higher than the U.S. average.

The coming winter in New England is expected to be colder and snowier than normal, similar to what the region has experienced the previous few years.

As a result, power plant operators are likely to increase the amount of liquefied natural gas they import from faraway suppliers in Trinidad and Tobago and the Middle East.

Imported gas can cost two to three times as much as the gas that was pumped in the U.S.
John Flynn, a senior vice president at U.K.-based utility National Grid PLC, which serves parts of New England, said gas and power prices in the region will keep rising until new gas pipelines get built to bring cheap supplies to the region.

National Grid, based in Waltham, Mass., is developing a $3 billion pipeline with Spectra Energy Corp. and Eversource Energy that aims to bring 1 billion cubic feet of gas every day to New England starting in 2018. The companies haven’t yet requested federal approval for that project. A different Spectra pipeline project in Massachusetts has faced opposition from some Boston officials and residents.

And what is this doing for the environment?

New England’s lack of easy access to natural gas is forcing many power-plant operators to burn dirty fuel oil and coal instead, which ends up causing more pollution. The region’s overall emissions of nitrogen oxide, sulfur dioxide and carbon dioxide have dropped since 2001, but those pollutants increased sharply from December 2013 to March 2014, according to the region’s power grid operator.

Much, much more at the link.

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But Is It Criminal?

On September 18, 2015, I asked whether Volkswagen did anything illegal. I should have asked whether Volkswagen did anything criminal. Perhaps not. See update at this link; at the link scroll down.

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Hit The Road, Jack

Mr Putin told Mr Obama to get his war planes out of Syria. For the archives.

And, of course:

Hit The Road, Jack, Ray Charles