A report published by the independent energy consulting firm Concentric Energy Advisors. The report finds that if the PennEast Pipeline is built, PA electric and natural gas customers will see a combined savings of over $500 million, while NJ electric and gas customers will see a combined savings of nearly $400 million.
The PA Gas Outlook Report is published annually by the PA Public Utility Commission. The report summarizes the financial and supply data for PA's natural gas distribution companies (NGDCs) and looks at changes and trends in the natural gas market, including usage, financial status of utilities, and market pricing.
Report to the General Assembly on Pipeline Placement of Natural Gas Gathering...Marcellus Drilling News
A report created and delivered to the PA legislature by PA Gov. Tom Corbett’s Energy Executive, Patrick Henderson, as a requirement under the state’s new Act 13 drilling law. The report provides a brief history of natural gas pipelines in the state with an excellent overview of how pipelines are regulated and who regulates them, followed by 16 recommendations for lawmakers to consider in crafting new policies.
Gürcan Gülen presented on predicting future natural gas supply and demand. Some key points:
fueling stations in the U.S.
- There are abundant shale gas resources in the U.S., but deliverability depends on factors like infrastructure and prices needed for producers to be profitable.
- Demand is difficult to predict and depends on uncertain factors like economic growth, power generation fuel mix, industrial demand, and exports.
- For gas to significantly displace other fuels like coal in power generation, the gas price needs to remain competitive, but coal and nuclear face regulatory risks that could boost gas demand.
The document discusses the impact of India's recent hike in domestic natural gas prices. It will have the following effects:
1) It will be positive for upstream oil and gas companies' earnings and investment sentiments, but the lack of clarity on premium prices for gas from complex offshore fields is a damper.
2) A material increase in domestic gas production is only likely after 4-5 years due to approval delays and the long lead time needed for developing fields. Investments by one consortium may also be subdued due to arbitration issues.
3) It will be marginally negative for the power, fertilizer, and gas distribution sectors as their price competitiveness weakens.
4) It will
Antero Resources is an E&P company focused on developing shale gas assets in the Appalachian region, including the Marcellus and Utica shales. It has over 429,000 net acres across its core positions. Antero has a proven track record of growth, increasing its proved reserves by 44% in the first half of 2013 to over 6 trillion cubic feet equivalent. It also grew production 115% year-over-year to 458 million cubic feet equivalent per day as of the second quarter of 2013. Antero has a large inventory of undrilled locations that can support further production growth from its sizable reserves and low-cost operating model.
Dejour provides a corporate presentation summarizing its oil and gas assets and operations. The company holds over 45,000 net acres in the Piceance Basin and over 19,000 net acres in the Peace River Arch region. Dejour expects production to increase to over 1,200 BOE/d in Q3 2015 from existing wells at its Woodrush, Hunter, and Kokopelli projects. The presentation also highlights Dejour's other exploration prospects and provides a financial and corporate overview.
PLG Consulting’s CEO, Graham Brisben presented his presentation Shale Developments: The Evolving Transportation Impacts to the Broe Group on June 23, 2014.
The PA Gas Outlook Report is published annually by the PA Public Utility Commission. The report summarizes the financial and supply data for PA's natural gas distribution companies (NGDCs) and looks at changes and trends in the natural gas market, including usage, financial status of utilities, and market pricing.
Report to the General Assembly on Pipeline Placement of Natural Gas Gathering...Marcellus Drilling News
A report created and delivered to the PA legislature by PA Gov. Tom Corbett’s Energy Executive, Patrick Henderson, as a requirement under the state’s new Act 13 drilling law. The report provides a brief history of natural gas pipelines in the state with an excellent overview of how pipelines are regulated and who regulates them, followed by 16 recommendations for lawmakers to consider in crafting new policies.
Gürcan Gülen presented on predicting future natural gas supply and demand. Some key points:
fueling stations in the U.S.
- There are abundant shale gas resources in the U.S., but deliverability depends on factors like infrastructure and prices needed for producers to be profitable.
- Demand is difficult to predict and depends on uncertain factors like economic growth, power generation fuel mix, industrial demand, and exports.
- For gas to significantly displace other fuels like coal in power generation, the gas price needs to remain competitive, but coal and nuclear face regulatory risks that could boost gas demand.
The document discusses the impact of India's recent hike in domestic natural gas prices. It will have the following effects:
1) It will be positive for upstream oil and gas companies' earnings and investment sentiments, but the lack of clarity on premium prices for gas from complex offshore fields is a damper.
2) A material increase in domestic gas production is only likely after 4-5 years due to approval delays and the long lead time needed for developing fields. Investments by one consortium may also be subdued due to arbitration issues.
3) It will be marginally negative for the power, fertilizer, and gas distribution sectors as their price competitiveness weakens.
4) It will
Antero Resources is an E&P company focused on developing shale gas assets in the Appalachian region, including the Marcellus and Utica shales. It has over 429,000 net acres across its core positions. Antero has a proven track record of growth, increasing its proved reserves by 44% in the first half of 2013 to over 6 trillion cubic feet equivalent. It also grew production 115% year-over-year to 458 million cubic feet equivalent per day as of the second quarter of 2013. Antero has a large inventory of undrilled locations that can support further production growth from its sizable reserves and low-cost operating model.
Dejour provides a corporate presentation summarizing its oil and gas assets and operations. The company holds over 45,000 net acres in the Piceance Basin and over 19,000 net acres in the Peace River Arch region. Dejour expects production to increase to over 1,200 BOE/d in Q3 2015 from existing wells at its Woodrush, Hunter, and Kokopelli projects. The presentation also highlights Dejour's other exploration prospects and provides a financial and corporate overview.
PLG Consulting’s CEO, Graham Brisben presented his presentation Shale Developments: The Evolving Transportation Impacts to the Broe Group on June 23, 2014.
A new report from the U.S. Energy Information Administration detailing trends and costs in upstream (i.e. drilling) for U.S. oil and natural gas. Full of useful facts and figures and predictions from our favorite government agency.
Scandinavia Oil-Gas Magazine May 2011 paperD.K. Das
This document discusses the potential for LNG exports from the United States to Japan. It notes that Japan is the world's largest LNG importer and will likely increase imports following the Fukushima disaster. The US has large natural gas reserves and proposed LNG export terminals on the Gulf Coast that could supply Japan. An analysis of delivery costs suggests US LNG delivered to Japan could be competitive at $7.17/MMBtu compared to other suppliers. However, risks include regulatory hurdles, potential oversupply from other exporters, and environmental concerns around fracking. If these challenges can be addressed, US LNG exports have the potential to supply growing Asian demand.
This document summarizes a presentation on regulatory and organizational challenges facing gas development in Indonesia. Recent regulations have both positive and negative impacts on the gas supply chain. Key challenges include domestic gas pricing, PSC terms, and the lack of a coordinated gas development plan across government institutions. Examples show a lack of implementation for announced gas infrastructure projects and demand not being met. Overall, conflicting policies and a lack of single decision authority on gas development planning have contributed to current gas supply and infrastructure shortfalls.
This document analyzes challenges related to unconventional gas reserves reporting. Volatile natural gas prices can lead to downgrading of reserves if production costs are too high. New SEC rules have accelerated unconventional gas reserves growth but also introduced more volatility and risk. There is concern about investment security due to volatile gas prices and uncertainty around reported reserves volumes. This is exacerbated by unprecedented increases in proved undeveloped gas reserves reported by unconventional gas operators under new SEC rules. The document examines reserves reporting differences between conventional and unconventional gas companies.
The document summarizes the extreme price spikes in the PJM wholesale power market during January 2014 due to a polar vortex event. Delivered natural gas prices in eastern markets reached record levels over $100/MMBtu, while gas at the Henry Hub benchmark was under $5/MMBtu. This caused wholesale power prices to exceed PJM's generator offer cap of $1,000/MWh, endangering reliability. The price spikes were caused by constraints on pipeline capacity limiting gas supply for gas-fired power plants during peak winter demand. The events highlighted the need for policies ensuring adequate planning and pricing signals for reliable winter operations.
An updated PowerPoint presentation summarizing CONSOL's second quarter 2016 operating and financial status. CONSOL has largely completed a transition from coal company to natural gas driller--focused on the Marcellus and Utica Shale region.
Dr Dev Kambhampati | FERC- Summer 2014 Energy Market & Reliability AssessmentDr Dev Kambhampati
The document provides a summary of the Summer 2014 Energy Market and Reliability Assessment. Key points include:
- Reserve margins are projected to remain adequate across all regions of the country despite some generation retirements. Texas is expected to be slightly above its reserve margin target.
- Drought conditions in California could tighten electric and gas markets as hydro generation decreases and gas-fired generation increases. Transmission constraints also remain in parts of Southern California.
- The expansion of markets in SPP and MISO South will operate for the first time under summer conditions, which should improve dispatch efficiency. However, low coal stockpiles in parts of the Midwest may put upward pressure on prices.
- Natural gas and electric futures
The document analyzes the empirical relationship between natural gas and crude oil prices. It discusses:
1) Natural gas and crude oil prices have historically been linked due to their roles as primary energy sources and the ability of power plants to substitute between the two fuels.
2) Previous studies have found both long-term cointegration and decoupling between natural gas and oil prices over time, depending on market conditions and variables like seasonal demand factors.
3) The author's research aims to analyze the current long-term relationship and whether natural gas prices remain anchored to or decoupled from oil prices when accounting for other demand and supply variables.
June 2021- Sonoro Gold - Forecast Timeline to PEAMomentumPR
Sonoro Gold is a publicly listed exploration and development company with a portfolio of exploration-stage precious metal properties in Sonora state, Mexico. The company has highly experienced operational and management teams with proven records for the discovery and development of natural resource deposits.
The document provides an overview of Cypress Energy Partners, L.P., which offers water and environmental services and pipeline inspection and integrity services to energy companies. It notes that increased U.S. oil and gas production is driving greater demand for saltwater disposal and pipeline inspection. Cypress owns saltwater disposal facilities and has a stake in a pipeline inspection business. The document highlights several growth drivers in the company's end markets like increasing production volumes, water usage, and regulatory scrutiny pushing outsourcing of waste services to specialists.
White Paper: Shell Petrochemical Complex (“Cracker”) Project OverviewMarcellus Drilling News
A white paper issue by the Ben Franklin Shale Gas Innovation and Commercialization Center. Provides an excellent overview of the coming ethane cracker in Beaver County, PA--with details for how and who can benefit from it.
The document discusses Connecticut's participation in the Federal Highway Administration's Alternative Fuel Corridor Program. It outlines how Connecticut has designated sections of Interstates 84, 91, 95, and 395 as ready for electric vehicle, compressed natural gas, and propane signage. The presentation notes Connecticut's commitment to reducing greenhouse gas emissions from transportation and improving air quality. It describes recent and upcoming activities related to installing alternative fuel corridor signage and pursuing a hydrogen fuel corridor designation.
The document summarizes a meeting to discuss planning for climate change impacts on water supply. Speakers will brief attendees on local climate studies showing warming trends and projections of reduced precipitation and snowpack. This could decrease water supply. Regulations like AB 32 require reducing greenhouse gas emissions. The Water Authority partners with scientists and other agencies to understand climate impacts and find solutions. It incorporates climate change into long-term planning and develops strategies to diversify supply, increase storage, and promote conservation and efficiency to adapt to potential impacts.
This document is a digital representation of a report by DeGolyer and MacNaughton regarding estimates of prospective gas resources in a Devonian shale gas play. The report estimates a 18.2% probability (Pg) of the mean gas resources being discovered based on probabilities of key geologic factors. It cautions that the Pg-adjusted estimates are not reserves and are dependent on currently available data, which could change with future data acquisition. The report distinguishes between nonassociated gas, gas-cap gas, and solution gas in known accumulations and identifies prospective resources simply as gas due to uncertainty in reservoirs.
Eia pakistan shale oil and gas potential summary for pbc 2013 ver2Abbas Bilgrami
The document discusses an assessment of shale oil and gas resources in 41 countries outside the United States. It summarizes that the assessment found 137 shale formations with substantial shale oil and gas resources. While the estimates will evolve as more data is collected, shale resources not previously counted as recoverable constitute a significant portion of global oil and gas supplies. It's important to distinguish technically recoverable resources from economically recoverable resources that can be profitably produced.
Sunoco Logistics Petition to the PA Public Utility Commission Ending Request ...Marcellus Drilling News
A petition filed by Sunoco Logistics on March 5 withdrawing their request to be exempt from local zoning provisions in building 31 pump and valve stations along the route of the Mariner East 1 pipeline that traverses PA from west to east. Sunoco reports working out their differences with the 31 affected municipalities along the route.
A 24-page "report" by the anti-drilling group Environmental Advocates of New York that supposedly says the little bit of drill cuttings (leftover rock and dirt) that come from drilling shale wells in PA that goes into NY landfills will make New Yorkers glow in the dark from radiation poisoning. It's bogus crap.
EPA's Final Rule Forcing O&G Drillers to Capture Tiny Amounts of Fugitive Met...Marcellus Drilling News
An onerous and expensive set of rules from a rogue, out-of-control federal bureaucracy--the Environmental Protection Agency--forcing shale drillers to spend huge amounts of money to capture tiny amounts of leaking methane. All in the name of mythical man-made global warming. It is one of Obama's last dirty tricks to attack the fossil fuel industry.
The monthly tabulation and prediction from the U.S. Energy Information Administration on production and activity in the largest 7 U.S. shale plays. All 7 shale plays will experience a decrease in natural gas production from the previous month due to low commodity prices.
A new report from the U.S. Energy Information Administration detailing trends and costs in upstream (i.e. drilling) for U.S. oil and natural gas. Full of useful facts and figures and predictions from our favorite government agency.
Scandinavia Oil-Gas Magazine May 2011 paperD.K. Das
This document discusses the potential for LNG exports from the United States to Japan. It notes that Japan is the world's largest LNG importer and will likely increase imports following the Fukushima disaster. The US has large natural gas reserves and proposed LNG export terminals on the Gulf Coast that could supply Japan. An analysis of delivery costs suggests US LNG delivered to Japan could be competitive at $7.17/MMBtu compared to other suppliers. However, risks include regulatory hurdles, potential oversupply from other exporters, and environmental concerns around fracking. If these challenges can be addressed, US LNG exports have the potential to supply growing Asian demand.
This document summarizes a presentation on regulatory and organizational challenges facing gas development in Indonesia. Recent regulations have both positive and negative impacts on the gas supply chain. Key challenges include domestic gas pricing, PSC terms, and the lack of a coordinated gas development plan across government institutions. Examples show a lack of implementation for announced gas infrastructure projects and demand not being met. Overall, conflicting policies and a lack of single decision authority on gas development planning have contributed to current gas supply and infrastructure shortfalls.
This document analyzes challenges related to unconventional gas reserves reporting. Volatile natural gas prices can lead to downgrading of reserves if production costs are too high. New SEC rules have accelerated unconventional gas reserves growth but also introduced more volatility and risk. There is concern about investment security due to volatile gas prices and uncertainty around reported reserves volumes. This is exacerbated by unprecedented increases in proved undeveloped gas reserves reported by unconventional gas operators under new SEC rules. The document examines reserves reporting differences between conventional and unconventional gas companies.
The document summarizes the extreme price spikes in the PJM wholesale power market during January 2014 due to a polar vortex event. Delivered natural gas prices in eastern markets reached record levels over $100/MMBtu, while gas at the Henry Hub benchmark was under $5/MMBtu. This caused wholesale power prices to exceed PJM's generator offer cap of $1,000/MWh, endangering reliability. The price spikes were caused by constraints on pipeline capacity limiting gas supply for gas-fired power plants during peak winter demand. The events highlighted the need for policies ensuring adequate planning and pricing signals for reliable winter operations.
An updated PowerPoint presentation summarizing CONSOL's second quarter 2016 operating and financial status. CONSOL has largely completed a transition from coal company to natural gas driller--focused on the Marcellus and Utica Shale region.
Dr Dev Kambhampati | FERC- Summer 2014 Energy Market & Reliability AssessmentDr Dev Kambhampati
The document provides a summary of the Summer 2014 Energy Market and Reliability Assessment. Key points include:
- Reserve margins are projected to remain adequate across all regions of the country despite some generation retirements. Texas is expected to be slightly above its reserve margin target.
- Drought conditions in California could tighten electric and gas markets as hydro generation decreases and gas-fired generation increases. Transmission constraints also remain in parts of Southern California.
- The expansion of markets in SPP and MISO South will operate for the first time under summer conditions, which should improve dispatch efficiency. However, low coal stockpiles in parts of the Midwest may put upward pressure on prices.
- Natural gas and electric futures
The document analyzes the empirical relationship between natural gas and crude oil prices. It discusses:
1) Natural gas and crude oil prices have historically been linked due to their roles as primary energy sources and the ability of power plants to substitute between the two fuels.
2) Previous studies have found both long-term cointegration and decoupling between natural gas and oil prices over time, depending on market conditions and variables like seasonal demand factors.
3) The author's research aims to analyze the current long-term relationship and whether natural gas prices remain anchored to or decoupled from oil prices when accounting for other demand and supply variables.
June 2021- Sonoro Gold - Forecast Timeline to PEAMomentumPR
Sonoro Gold is a publicly listed exploration and development company with a portfolio of exploration-stage precious metal properties in Sonora state, Mexico. The company has highly experienced operational and management teams with proven records for the discovery and development of natural resource deposits.
The document provides an overview of Cypress Energy Partners, L.P., which offers water and environmental services and pipeline inspection and integrity services to energy companies. It notes that increased U.S. oil and gas production is driving greater demand for saltwater disposal and pipeline inspection. Cypress owns saltwater disposal facilities and has a stake in a pipeline inspection business. The document highlights several growth drivers in the company's end markets like increasing production volumes, water usage, and regulatory scrutiny pushing outsourcing of waste services to specialists.
White Paper: Shell Petrochemical Complex (“Cracker”) Project OverviewMarcellus Drilling News
A white paper issue by the Ben Franklin Shale Gas Innovation and Commercialization Center. Provides an excellent overview of the coming ethane cracker in Beaver County, PA--with details for how and who can benefit from it.
The document discusses Connecticut's participation in the Federal Highway Administration's Alternative Fuel Corridor Program. It outlines how Connecticut has designated sections of Interstates 84, 91, 95, and 395 as ready for electric vehicle, compressed natural gas, and propane signage. The presentation notes Connecticut's commitment to reducing greenhouse gas emissions from transportation and improving air quality. It describes recent and upcoming activities related to installing alternative fuel corridor signage and pursuing a hydrogen fuel corridor designation.
The document summarizes a meeting to discuss planning for climate change impacts on water supply. Speakers will brief attendees on local climate studies showing warming trends and projections of reduced precipitation and snowpack. This could decrease water supply. Regulations like AB 32 require reducing greenhouse gas emissions. The Water Authority partners with scientists and other agencies to understand climate impacts and find solutions. It incorporates climate change into long-term planning and develops strategies to diversify supply, increase storage, and promote conservation and efficiency to adapt to potential impacts.
This document is a digital representation of a report by DeGolyer and MacNaughton regarding estimates of prospective gas resources in a Devonian shale gas play. The report estimates a 18.2% probability (Pg) of the mean gas resources being discovered based on probabilities of key geologic factors. It cautions that the Pg-adjusted estimates are not reserves and are dependent on currently available data, which could change with future data acquisition. The report distinguishes between nonassociated gas, gas-cap gas, and solution gas in known accumulations and identifies prospective resources simply as gas due to uncertainty in reservoirs.
Eia pakistan shale oil and gas potential summary for pbc 2013 ver2Abbas Bilgrami
The document discusses an assessment of shale oil and gas resources in 41 countries outside the United States. It summarizes that the assessment found 137 shale formations with substantial shale oil and gas resources. While the estimates will evolve as more data is collected, shale resources not previously counted as recoverable constitute a significant portion of global oil and gas supplies. It's important to distinguish technically recoverable resources from economically recoverable resources that can be profitably produced.
Sunoco Logistics Petition to the PA Public Utility Commission Ending Request ...Marcellus Drilling News
A petition filed by Sunoco Logistics on March 5 withdrawing their request to be exempt from local zoning provisions in building 31 pump and valve stations along the route of the Mariner East 1 pipeline that traverses PA from west to east. Sunoco reports working out their differences with the 31 affected municipalities along the route.
A 24-page "report" by the anti-drilling group Environmental Advocates of New York that supposedly says the little bit of drill cuttings (leftover rock and dirt) that come from drilling shale wells in PA that goes into NY landfills will make New Yorkers glow in the dark from radiation poisoning. It's bogus crap.
EPA's Final Rule Forcing O&G Drillers to Capture Tiny Amounts of Fugitive Met...Marcellus Drilling News
An onerous and expensive set of rules from a rogue, out-of-control federal bureaucracy--the Environmental Protection Agency--forcing shale drillers to spend huge amounts of money to capture tiny amounts of leaking methane. All in the name of mythical man-made global warming. It is one of Obama's last dirty tricks to attack the fossil fuel industry.
The monthly tabulation and prediction from the U.S. Energy Information Administration on production and activity in the largest 7 U.S. shale plays. All 7 shale plays will experience a decrease in natural gas production from the previous month due to low commodity prices.
The Material Safety Data Sheet for DOWTHERM™ MX Heat Transfer Fluid, a hazardous chemical that spilled at the MarkWest Mobley, WV natural gas processing plant. Some 3,000 gallons spilled on the ground and into the North Fork of Fishing Creek, temporarily disrupting the drinking water supply of a nearby community.
The U.S. Fish and Wildlife Service has listed the northern long-eared bat as "threatened" under the Endangered Species Act. That designation will mean onerous new regulations placed on not only the oil and gas industry, but also on agriculture and construction. The problem is, the bat is not threatened by habitat destruction--they are threatened by a fungus called white nose syndrome. USFWS is "fixing" the wrong problem with their listing of the bat as threatened and these harsh new rules.
The U.S. Energy Information Administration's monthly Drilling Productivity Report for January 2015. The report shows expected production for shale oil and gas for the country's 7 largest shale plays. As in previous months, the Marcellus and Utica regions continue to expand their production rapidly.
An annual report issued by ExxonMobil predicting the energy scene from now until 2040. In this edition Exxon says fossil energy--oil, natural gas and coal--will continue to produce 80% of the world's energy through 2040.
An updated slide deck with lots of interesting charts and graphs outlining where Rice has been, and where they are heading with their Marcellus/Utica drilling program (and midstream program).
UK Research: Truck Traffic from Fracking has Negligible Impact on Environment...Marcellus Drilling News
The document presents a traffic impacts model (TIM) to assess the environmental impacts of road traffic from hydraulic fracturing operations. The TIM estimates impacts such as greenhouse gas emissions, local air quality emissions, noise, and road wear from hypothetical fracking scenarios. Modeling a single well pad found short-term but large magnitude impacts, such as excess NOx emissions of 30% on peak activity days. Modeling multiple pad development over decades found more modest cumulative CO2 emissions ranging from 2.5 to 160.4 kilotons depending on the number of wells. The TIM is designed to help inform decisions about where and how fracking may occur given likely traffic-related environmental effects.
Draft Environmental Assessment for drilling in the Marietta Unit of the Wayne...Marcellus Drilling News
The Bureau of Land Management (BLM) proposes to lease approximately 40,000 acres of federally-owned mineral rights located within the Wayne National Forest in Ohio for potential future oil and gas development. This environmental assessment analyzes the impacts of leasing the mineral rights under a reasonably foreseeable development scenario and a no action alternative. Leasing the mineral rights would generate revenue but could also result in minor environmental impacts if development occurs, such as air emissions, habitat disturbance, and noise. With required stipulations and permits, impacts would be minimized. A no action alternative would forgo revenues but prevent potential impacts from future development. The BLM will decide whether to lease the mineral rights and what stipulations would apply to any leases
Preview pages for the Marcellus and Utica Shale Databook 2015, Volume 1. This first volume (of three) features detailed maps and charts showing where Marcellus & Utica Shale well permits have been issued throughout PA, OH and WV for January through April of 2015. Each detail map shows major natural gas pipelines, the location of compressor stations, and the locations for each permit issued appended with the driller's name. UPDATED in this edition: How to value wells and property in the northeast shale region. Also an updated directory of the 84 active drillers in the Marcellus/Utica, and much more! This is must-have information for landowners, drillers, and anyone interested in answering the question--just how long (and how much) will a well produce? Many other special features make this an indispensable tool for those with an interest in drilling in the Marcellus/Utica. Visit this page for more details: http://marcellusdrilling.com/databook.
Ohio House Bill 540 - Funnels More Severance Tax Money to Impacted CommunitiesMarcellus Drilling News
Ohio House Bill 540, titled "Oil and Gas Well Fund-limit amounts credited to/allocate excess funds" and introduced by Democrat Jack Cera, would reallocate money raised via the severance tax and funnel more of that money to local communities where fracking happens and therefore are more impacted by it.
The monthly tabulation and prediction from the U.S. Energy Information Administration on production and activity in the largest 7 U.S. shale plays. All 7 shale plays will experience a decrease in natural gas production from the previous month due to low commodity prices.
Report: North American Midstream Infrastructure Through 2035: Leaning into th...Marcellus Drilling News
An updated study from the Interstate Natural Gas Association of America (INGAA), which finds the U.S. and Canada needs to invest $546 billion (real 2015$) total over the 21-year period from 2015 to 2035--or $26 billion per year--in natural gas, crude oil and natural gas liquids infrastructure.
A presentation delivered by Cabot Oil & Gas at the Scotia Howard Weil Energy Conference in New Orleans in March 2016. During the presentation we learn Cabot plans to complete 40 wells in the Marcellus in 2016 and grow production slightly--up to 7% in 2016 over 2015.
The monthly Short-Term Energy Outlook (STEO) from the U.S. Energy Information Administration for April 2016. This issue makes a couple of key points re natural gas: (1) U.S. natural gas inventories just finished the winter heating season at their highest level ever, and are expected to be at a record high at the start of next winter heating season in November. (2) This summer natural gas consumption for electricity generation is expected to reach a record high. Here's the natgas section of the STEO, along with a copy of the full report.
Annual report from BP looking at their best guesses about where energy, of all kinds, is heading from now until 2035. In this year's report, BP predicts (1) By 2035, across the entire world, 80% of all energy will come from fossil fuels. (2) Natural gas is the largest-growing fossil fuel and by 2035 it will have replaced coal as the #2 source of energy in the world. (3) The U.S. will achieve overall energy self-sufficiency by 2021, and oil self-sufficiency by 2030.
Report: Access Northeast Project - Reliability Benefits and Energy Cost Savin...Marcellus Drilling News
A report commissioned by Spectra Energy and its partners, researched and published by ICF International, which provides strong justification for the proposed Access Northeast pipeline project in New England. The project would flow Marcellus Shale gas from Pennsylvania to New England (and into Canada), providing New England electric generators that use natgas as fuel with an important, cheap new source. The project would lead to much lower electricity costs for New Englanders.
PennEast Pipeline Response to NJDRC Comments Against Pipeline ProjectMarcellus Drilling News
PennEast Pipelines response to analysis provided to the Federal Energy Regulatory Commission by the New Jersey Division of the Rate Council (NJDRC). The NJDRC told FERC that PennEast isn't needed and questioned its cost recovery rate. PennEast responded to that analysis with an independent report written by Concentric Energy Advisors, which refutes (i.e. obliterates) the "incorrect assumptions" made in the NJDRC comments to FERC.
Changes to the generation portfolio, the introduction of significant renewable resources, and the deployment of customer-side resources are fundamentally changing the way electricity is produced and delivered to customers. These changes are having a significant impact on the developments and operation of the transmission system and are occurring in an environment of decreasing demand growth which impacts utility revenues and puts pressure on rates. This presentation will examine how they will impact the amount and location of transmission needed, the rates that can be charged for it, and its relative value in a utility’s portfolio assets.
Regulators should consider the market value of energy and capacity provided by wind projects when setting development policies. An analysis of hypothetical offshore and onshore wind projects in New England found that an offshore project would have generated more annual energy and higher capacity values, especially during peak hours. This is due to stronger offshore wind resources. The offshore project also would have received slightly higher energy prices due to its proximity to load centers. As a result, the offshore project would have realized higher total energy and capacity revenues compared to the onshore project over 2012-2014. However, offshore wind has higher capital costs than onshore wind.
Wellington&Cira Law Seminars Presentation 072610fredwellington
The document summarizes a presentation by Navigant Consulting on the financial impacts of renewable energy policies in the Pacific Northwest. It finds that remaining wind resources in Oregon and Washington will likely not be sufficient to meet states' 2020 renewable portfolio standard targets. This could increase renewable energy compliance costs for utilities if they do not procure higher quality wind resources early on or rely more on other renewable resources like geothermal. The analysis compares costs under different scenarios of accelerated, incremental, and import-reliant renewable resource development. Prudent renewable energy procurement is important to manage risks to utility shareholders and ratepayers from increased costs of non-cost effective compliance strategies.
Wood MacKenzie Alaska LNG Competitiveness Study Aug 2016Brad Keithley
This document provides a summary of a study conducted by Wood Mackenzie on the competitiveness of the proposed Alaska LNG project. The study finds that the Alaska LNG project currently has one of the highest cost of supply estimates compared to other proposed LNG projects targeting the North Asia market. Several options are explored that could help reduce the project's costs and improve its competitiveness, including implementing a third-party owned tolling structure, increasing the State of Alaska's ownership stake, and making changes to the fiscal regime through reductions in taxes. However, the analysis finds that even with these options the project may still struggle to be competitive at current LNG market prices.
Copy of a letter sent by the Natural Gas Supply Association to the NY Dept. of Environmental Conservation, politely requesting they get off their considerable rear-ends and approve air permits for Dominion's New Market Project.
The ScottMadden Energy Industry Update – August 2014ScottMadden, Inc.
We are pleased to announce our Summer 2014 issue of the ScottMadden Energy Industry Update. This semi-annual publication offers our view of major events and emerging trends in the energy industry.
The energy and utility industries continue to anticipate and react to potential fundamental shifts in the 100+ year-old model of investment, regulation, and earnings. Policy and regulatory changes are big factors driving the design of the new landscape. For many of these changes, significant investment in existing and new infrastructure is needed across all parts of the energy value chain. And by the way, load growth is no longer, so investment and cost recovery are uncertain. Themed “I Feel the Earth Move under My Feet,” this issue surveys a broad array of strategic issues.
For more information, please visit www.scottmadden.com.
The document discusses load profiling arrangements for the NSW gas market as it transitions to full retail competition (FRC). It summarizes that net system load profiling (NSLP) using regional profiles will be used to facilitate FRC. Key aspects include annual apportionment of loads to retailers, forward reconciliation over 28 days, and global settlements to spread errors across all participants. The arrangements aim to balance objectives like equity, efficiency and minimizing barriers to competition during the transition to FRC.
The document provides an overview of the North American natural gas market, including natural gas demand, supply, and pricing dynamics. It notes that natural gas demand in the US is driven by economic growth, weather, and relative fuel prices, while domestic supply has leveled off as existing fields mature. With demand and supply tightly balanced, prices have trended upward in recent years. The market is working to increase supply from unconventional resources and new areas, but significant gas resources remain restricted from development.
This document analyzes the cost structure of wind power compared to other energy sources. It finds that while onshore wind has very competitive capital costs, offshore wind costs are significantly higher. It also discusses external costs and benefits associated with different energy sources as well as other factors like government subsidies that impact costs. The conclusion is that the best energy source depends on the priorities of different stakeholders and there are tradeoffs to consider between financial and external costs.
A new report just issued by the New England Coalition for Affordable Energy says New England is at a much greater risk for higher energy costs in the short-term because of lack of new pipelines.
The document provides a summary and analysis of NERC's Initial Reliability Review of the EPA's proposed Clean Power Plan. The analysis finds that while NERC raises some valid concerns about assumptions in EPA's analysis, reliability is unlikely to be materially affected by the CPP. Compliance can be achieved through a combination of coal plant modifications, gas switching, renewable energy expansion, and energy efficiency, utilizing existing reliability tools. The transformation of the power system is ongoing and system operators have sufficient flexibility and options to ensure reliability with the CPP.
The 25-page executive summary for a study published in January 2014 by IHS titled "Fueling the Future with Natural Gas: Brining it Home." The new study finds that because of the ongoing rush of new natural gas supplies from shale drilling, the Henry Hub benchmark price will likely stay between $4-$5 per Mcf until 2035. It also finds homeowners will save a signifcant amount of money by heating with natural gas.
Energy equipment & services monthly report – september finalCapstone Headwaters
Crude prices have moderated somewhat after reaching the upper $40
range
–– Prices weakened by rising exports from Iran, elevated inventories, and
weak refinery demand
• US Rig counts continue to improve moderately
–– Since August 12, the US onshore market has added 25 rigs, bringing the
total rig count to 506
–– International rig counts rose slightly by 66 in August
• Refining utilization decreased mildly since last month, and more
substantial declines are expected going forward
–– 300k bbl/d capacity expected to be down for routine maintenance at
times during fourth quarter, excluding economic run cuts or unplanned
downtime
• In Q2 2016, overall solar system pricing fell by up to 7.5%. Utility fixedtilt
and tracking projects in Q2 2016 saw an average pricing of $1.17/Wdc
and $1.30/Wdc, respectively.
• Continued elevated temperatures led to record power demand across
the country, including an
Resource Assessment of Potentially Producible Natural Gas Volumes From the Ma...Marcellus Drilling News
A so-called "study" by discredited peak oil theorist Art Berman on behalf of the New York League of [Liberal Democrat Anti-Drilling] Women Voters. The ladies wanted a study that would say "ain't enough gas at these prices to make it worth fracking for." They got what they asked for. A laughable piece of trash trying to pass as research.
The Unheralded Value In Offshore Wind An Evaluation Using pCoudAnalyticsKofi Amoako-Gyan
This document analyzes the benefits of incorporating offshore wind power into the New England electric grid using power system modeling software. It finds that adding offshore wind reduces costs, emissions, and locational marginal prices. Specifically:
- Adding 1200MW of offshore wind reduces natural gas usage by 6.5% and coal by 5.6%, lowering emissions of CO2 by 3.24 million tons, SO2 by 2,859 tons, and NOx by 1,121 tons.
- Offshore wind decreases operating costs for fuels and maintenance in the region based on the size of installation, with 1200MW saving over $100 million.
- Wholesale electricity costs paid by consumers are also reduced, as the modeling
2012-10-01 Decision - Minnesota Department of Commerce - Division of Energy R...Silicon Energy
The document is a decision from the Minnesota Department of Commerce regarding approval of Northern States Power Company's (Xcel) 2013-2015 Triennial Natural Gas and Electric Conservation Improvement Program. It also addresses alternative conservation program proposals from Minnesota Waste Wise and the Center for Energy and Environment.
The Commissioner approves Xcel's petition with some modifications and approves one of the alternative programs. Xcel's proposed savings goals and budgets meet statutory requirements. The decision also ensures Xcel's program includes adequate low-income initiatives and promotes efficient lighting and lamp recycling as required by law.
Dr Dev Kambhampati | DOE NETL Report- Cost & Performance Baseline for Fossil ...Dr Dev Kambhampati
This document provides a summary of cost and performance baselines for fossil energy power plants, including integrated gasification combined cycle (IGCC), pulverized coal (PC), and natural gas combined cycle (NGCC) configurations. Key findings include:
- IGCC, PC, and NGCC plants without carbon capture can achieve efficiencies of 39%, 39%, and 58% respectively. With capture, efficiencies drop to 32-35%, 30-33%, and 45-48%.
- Total overnight capital costs for non-capture plants are $718/kW for NGCC, $2,010/kW for PC, and $2,505/kW for IGCC on average. Capture increases
public serviceenterprise group LehmanConferencefinance20
Public Service Enterprise Group presented at a conference on global warming solutions. They discussed New Jersey's draft Energy Master Plan, which aims to reduce energy consumption 20% by 2020 through efficiency, lower peak demand 5,700 MW, and meet 22.5% of electricity needs through renewable sources like solar and wind. PSE&G outlined their role in supporting these goals through energy efficiency programs, a $105 million solar investment program, and exploring additional investments in solar, efficiency, demand response, wind, and other technologies.
Similar to PennEast Pipeline - Energy Market Savings Report & Analysis (20)
The document summarizes five key facts about the recovery of US shale oil production:
1) Rig counts have increased by 90% since bottoming out in May 2016 and are up 30% year-over-year, signaling increased drilling and production capacity.
2) While decline rates remain steep, production profiles have increased substantially due to technological advances, meaning aggregate supply will be stronger.
3) Preliminary data shows that net new shale supply turned positive in December 2016 for the first time since March 2015, recovering just 7 months after rig counts increased.
4) Increased drilling activity is supported by a large stock of drilled but uncompleted wells, demonstrating the recovery and expansion of the shale sector.
5)
Quarterly legislative action update: Marcellus and Utica shale region (4Q16)Marcellus Drilling News
A quarterly update from the legal beagles at global law firm Norton Rose Fulbright. A quarterly legislative action update for the second quarter of 2016 looking at previously laws acted upon, and new laws introduced, affecting the oil and gas industry in Pennsylvania, Ohio and West Virginia.
An update from Spectra Energy on their proposed $3 billion project to connect four existing pipeline systems to flow more Marcellus/Utica gas to New England. In short, Spectra has put the project on pause until mid-2017 while it attempts to get new customers signed.
A letter from Rover Pipeline to the Federal Energy Regulatory Commission requesting the agency issue the final certificate that will allow Rover to begin tree-clearing and construction of the 511-mile pipeline through Pennsylvania, West Virginia, Ohio and Michigan. If the certificate is delayed beyond the end of 2016, it will delay the project an extra year due to tree-clearing restrictions (to accommodate federally-protected bats).
DOE Order Granting Elba Island LNG Right to Export to Non-FTA CountriesMarcellus Drilling News
An order issued by the U.S. Dept. of Energy that allows the Elba Island LNG export facility to export LNG to countries with no free trade agreement with the U.S. Countries like Japan and India have no FTA with our country (i.e. friendly countries)--so this is good news indeed. Although the facility would have operated by sending LNG to FTA countries, this order opens the market much wider.
A study released in December 2016 by the London School of Economics, titled "On the Comparative Advantage of U.S. Manufacturing: Evidence from the Shale Gas Revolution." While America has enough shale gas to export plenty of it, exporting it is not as economic as exporting oil due to the elaborate processes to liquefy and regassify natural gas--therefore a lot of the gas stays right here at home, making the U.S. one of (if not the) cheapest places on the planet to establish manufacturing plants, especially for manufacturers that use natural gas and NGLs (natural gas liquids). Therefore, manufacturing, especially in the petrochemical sector, is ramping back up in the U.S. For every two jobs created by fracking, another one job is created in the manufacturing sector.
Letter From 24 States Asking Trump & Congress to Withdraw the Unlawful Clean ...Marcellus Drilling News
A letter from the attorneys general from 24 of the states opposed to the Obama Clean Power Plan to President-Elect Trump, RINO Senate Majority Leader Mitch McConnel and RINO House Speaker Paul Ryan. The letter asks Trump to dump the CPP on Day One when he takes office, and asks Congress to adopt legislation to prevent the EPA from such an egregious overreach ever again.
Report: New U.S. Power Costs: by County, with Environmental ExternalitiesMarcellus Drilling News
Natural gas and wind are the lowest-cost technology options for new electricity generation across much of the U.S. when cost, public health impacts and environmental effects are considered. So says this new research paper released by The University of Texas at Austin. Researchers assessed multiple generation technologies including coal, natural gas, solar, wind and nuclear. Their findings are depicted in a series of maps illustrating the cost of each generation technology on a county-by-county basis throughout the U.S.
Annual report issued by the U.S. Energy Information Administration showing oil and natural gas proved reserves, in this case for 2015. These reports are issued almost a year after the period for which they report. This report shows proved reserves for natural gas dropped by 64.5 trillion cubic feet (Tcf), or 16.6%. U.S. crude oil and lease condensate proved reserves also decreased--from 39.9 billion barrels to 35.2 billion barrels (down 11.8%) in 2015. Proved reserves are calculated on a number of factors, including price.
The document is a report from the U.S. Energy Information Administration analyzing oil and gas production from seven regions in the U.S. It includes charts and tables showing historical and projected production levels of oil and gas from each region from 2008 to 2017, as well as metrics like the average production per rig. The regions - Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, Permian, and Utica - accounted for 92% of domestic oil production growth and all domestic natural gas production growth from 2011-2014.
Velocys is the manufacturer of gas-to-liquids (GTL) plants that convert natural gas (a hyrdocarbon) into other hydrocarbons, like diesel fuel, gasoline, and even waxes. This PowerPoint presentation lays out the Velocys plan to get the company growing. GTL plants have not (so far) taken off in the U.S. Velocys hopes to change that. They specialize in small GTL plants.
PA DEP Revised Permit for Natural Gas Compression Stations, Processing Plants...Marcellus Drilling News
In January 2016, Gov. Wolf announced the DEP would revise its current general permit (GP-5) to update the permitting requirements for sources at natural gas compression, processing, and transmission facilities. This is the revised GP-5.
PA DEP Permit for Unconventional NatGas Well Site Operations and Remote Piggi...Marcellus Drilling News
In January 2016, PA Gov. Wolf announced the Dept. of Environmental Protection would develop a general permit for sources at new or modified unconventional well sites and remote pigging stations (GP-5A). This is the proposed permit.
Onerous new regulations for the Pennsylvania Marcellus Shale industry proposed by the state Dept. of Environmental Protection. The new regs will, according to the DEP, help PA reduce so-called fugitive methane emissions and some types of air pollution (VOCs). This is liberal Gov. Tom Wolf's way of addressing mythical man-made global warming.
The monthly Short-Term Energy Outlook (STEO) from the U.S. Energy Information Administration for December 2016. This issue makes a couple of key points re natural gas: (1) EIA predicts that natural gas production in the U.S. for 2016 will see a healthy decline over 2015 levels--1.3 billion cubic feet per day (Bcf/d) less in 2016. That's the first annual production decline since 2005! (2) The EIA predicts the average price for natural gas at the benchmark Henry Hub will climb from $2.49/Mcf (thousand cubic feet) in 2016 to a whopping $3.27/Mcf in 2017. Why the jump? Growing domestic natural gas consumption, along with higher pipeline exports to Mexico and liquefied natural gas exports.
This document provides an overview of the natural gas market in the Northeast United States, including New England, New York, New Jersey, and Pennsylvania. It details statistics on gas customers, consumption, infrastructure like pipelines and storage, and production. A key point is that the development of the Marcellus Shale in Pennsylvania has significantly increased domestic gas production in the region and reduced its reliance on other supply basins and imports.
The Pennsylvania Public Utility Commission responded to each point raised in a draft copy of the PA Auditor General's audit of how Act 13 impact fee money, raised from Marcellus Shale drillers, gets spent by local municipalities. The PUC says it's not their job to monitor how the money gets spent, only in how much is raised and distributed.
Pennsylvania Public Utility Commission Act 13/Impact Fees Audit by PA Auditor...Marcellus Drilling News
A biased look at how 60% of impact fees raised from PA's shale drilling are spent, by the anti-drilling PA Auditor General. He chose to ignore an audit of 40% of the impact fees, which go to Harrisburg and disappear into the black hole of Harrisburg spending. The Auditor General claims, without basis in fact, that up to 24% of the funds are spent on items not allowed under the Act 13 law.
The final report from the Pennsylvania Dept. of Environmental Protection that finds, after several years of testing, no elevated levels of radiation from acid mine drainage coming from the Clyde Mine, flowing into Ten Mile Creek. Radical anti-drillers tried to smear the Marcellus industry with false claims of illegal wastewater dumping into the mine, with further claims of elevated radiation levels in the creek. After years of testing, the DEP found those allegations to be false.
FERC Order Denying Stay of Kinder Morgan's Broad Run Expansion ProjectMarcellus Drilling News
The Federal Energy Regulatory Commission denied a request to stay the authorization of Tennessee Gas Pipeline Company's Broad Run Expansion Project. The Commission found that the intervenors requesting the stay did not demonstrate they would suffer irreparable harm if the project proceeded. Specifically, the Commission determined that the environmental impacts to forest and a nearby animal rehabilitation center would be insignificant. Additionally, conditioning authorization on future permits did not improperly encroach on state authority. Therefore, justice did not require granting a stay.
21062024_First India Newspaper Jaipur.pdfFIRST INDIA
Find Latest India News and Breaking News these days from India on Politics, Business, Entertainment, Technology, Sports, Lifestyle and Coronavirus News in India and the world over that you can't miss. For real time update Visit our social media handle. Read First India NewsPaper in your morning replace. Visit First India.
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यूजीसी-नेट और NEET परीक्षा (कई अन्य के अलावा, 2018 तक सीबीएसई द्वारा आयोजित की जाती थी, जो भारत में सार्वजनिक और निजी स्कूलों के लिए एक राष्ट्रीय शिक्षा बोर्ड था (और है), जिसे भारत सरकार द्वारा नियंत्रित और प्रबंधित किया जाता था।
19 जून को बॉम्बे हाई कोर्ट ने विवादित फिल्म ‘हमारे बारह’ को 21 जून को थिएटर में रिलीज करने का रास्ता साफ कर दिया, हालांकि यह सुनिश्चित करने के बाद कि फिल्म निर्माता कुछ आपत्तिजनक अंशों को हटा दें।
Why We Chose ScyllaDB over DynamoDB for "User Watch Status"ScyllaDB
Yichen Wei and Adam Drennan share the architecture and technical requirements behind "user watch status" for a major global media streaming service, what that meant for their database, the pros and cons of the many options they considered for replacing DynamoDB, why they ultimately chose ScyllaDB, and their lessons learned so far.
Apna Punjab Media is a Punjabi newspaper that covers local and global news, cultural updates, and community events. It's a trusted source for Punjabi-speaking communities, offering a mix of traditional values and modern insights into Punjab's vibrant life and heritage.
Christian persecution in Islamic countries has intensified, with alarming incidents of violence, discrimination, and intolerance. This article highlights recent attacks in Nigeria, Pakistan, Egypt, Iran, and Iraq, exposing the multifaceted challenges faced by Christian communities. Despite the severity of these atrocities, the Western world's response remains muted due to political, economic, and social considerations. The urgent need for international intervention is underscored, emphasizing that without substantial support, the future of Christianity in these regions is at grave risk.
https://ecspe.org/the-rise-of-christian-persecution-in-islamic-countries/
18062024_First India Newspaper Jaipur.pdfFIRST INDIA
Find Latest India News and Breaking News these days from India on Politics, Business, Entertainment, Technology, Sports, Lifestyle and Coronavirus News in India and the world over that you can't miss. For real time update Visit our social media handle. Read First India NewsPaper in your morning replace. Visit First India.
CLICK:- https://firstindia.co.in/
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विवादास्पद फिल्म के ट्रेलर से गाली-गलौज वाले दृश्य हटा दिए गए हैं, और जुर्माना लगाया गया है। सुप्रीम कोर्ट और बॉम्बे हाई कोर्ट दोनों ने फिल्म की रिलीज पर रोक लगा दी है और उसे निलंबित कर दिया है। पहले यह फिल्म 7 जून और फिर 14 जून को रिलीज होने वाली थी, लेकिन अब यह 21 जून को रिलीज हो रही है।
19 जून को बॉम्बे हाई कोर्ट ने विवादित फिल्म ‘हमारे बारह’ को 21 जून को थिएटर में रिलीज करने का रास्ता साफ कर दिया, हालांकि यह सुनिश्चित करने के बाद कि फिल्म निर्माता कुछ आपत्तिजनक अंशों को हटा दें।
projet de traité négocié à Istanbul (anglais).pdfEdouardHusson
Ceci est le projet de traité qui avait été négocié entre Russes et Ukrainiens à Istanbul en mars 2022, avant que les Etats-Unis et la Grande-Bretagne ne détournent Kiev de signer.
La defensa del expresidente Juan Orlando Hernández, declarado culpable por narcotráfico en EE. UU., solicitó este viernes al juez Kevin Castel que imponga una condena mínima de 40 años de prisión.
#WenguiGuo#WashingtonFarm Guo Wengui Wolf son ambition exposed to open a far...rittaajmal71
Since fleeing to the United States in 2014, Guo Wengui has founded a number of projects in the United States, such as GTV Media Group, GTV private equity, farm loan project, G Club Operations Co., LTD., and Himalaya Exchange.
मद्रास उच्च न्यायालय के सेवानिवृत्त न्यायाधीश और केंद्र और राज्य सरकार के नौकरशाहों सहित आठ अन्य लोगों की अध्यक्षता वाली एक उच्च स्तरीय समिति ने 2021 में NEET परीक्षा को खत्म करने की सिफारिश की थी। महत्वपूर्ण बात यह है कि रिपोर्ट में 2010-11 में ग्रामीण पृष्ठभूमि से तमिल छात्रों की संख्या में 61.5% की भारी गिरावट को दर्शाया गया है। इसके बजाय मेट्रो छात्रों में वृद्धि दर्ज की गई है।
22062024_First India Newspaper Jaipur.pdfFIRST INDIA
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CLICK:- https://firstindia.co.in/
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Federal Authorities Urge Vigilance Amid Bird Flu Outbreak | The Lifesciences ...The Lifesciences Magazine
Federal authorities have advised the public to remain vigilant but calm in response to the ongoing bird flu outbreak of highly pathogenic avian influenza, commonly known as bird flu.
2. ESTIMATED ENERGY MARKET SAVINGS FROM
ADDITIONAL PIPELINE INFRASTRUCTURE SERVING
EASTERN PENNSYLVANIA AND NEW JERSEY
PREPARED FOR:
PENNEAST PIPELINE COMPANY, LLC
PennEast/PIPELINEMARCH 2015
PREPARED BY:
1CONCENTRIC
WWW.CEADVISORS.COM
3. Ujfj.
CoNCENTRIC EN ERGY ADVISORS
Concentric is a management consulting and
financial advisory firm focused on the North
American energy industry.
Energy Markets
oo
LU
Utility RegulationN
We offer a broad range of advisory and
support services, and our expertise spans all
aspects of the natural gas, power, and oil
markets.
<
Finance and M&A£
y
Litigation and Dispute ResolutionConcentric's workforce is comprised of 5
energy industry experts who have held z
positions with utility companies, state and 8
federal regulatory agencies, energy
marketers, and global energy companies.
Many members of Concentric’s team have been working together for more than 25 years.
Management and Operations Support
Concentric's experts have performed numerous strategic natural gas market assessments
throughout North America for pipelines, producers, natural gas storage providers, LNG developers,
and lenders. These assessments have evaluated historical and future markets for energy assets,
and have considered aspects including risk assessments, comparative cost assessments, valuations,
quantifications of savings associated with new infrastructure, and regulatory environment and
policy assessments.
The primary authors of this report are:
Toby Bishop
Vice President
Concentric Energy Advisors,Inc.
293 Boston Post Road West, Suite 500
Marlborough, MA 01752
tbishop@ceadvisors.com
Melissa Bartos
Assistant Vice President
Concentric Energy Advisors,Inc.
293 Boston Post Road West, Suite 500
Marlborough, MA 01752
mbartos@ceadvisors.com
CONCENTRICENERGYADVISORS,INC. i
4. DISCLAIMER
Concentric Energy Advisors, Inc. provides information and projections consistent with standard
practices. The analyses contained herein require certain simplifying assumptions; however, it is the
opinion of Concentric that these assumptions and the corresponding results reflected herein are
reasonable. All analyses are based on the best information available at the time they were
conducted. Concentric makes no warrantee or guarantee regarding the accuracy of any forecasts,
estimates, or analyses, or that such work products willbe acceptedby anylegal or regulatory body.
iiCONCENTRICENERGY ADVISORS,INC.
5. TABLE OF CONTENTS
SECTION 1: INTRODUCTION 2
A. OVERVIEW 2
B. EXECUTIVE SUMMARY 2
SECTION 2: MARKET OVERVIEW 5
A. NATURAL GAS DEMAND 5
B. EXISTING NATURAL GAS INFRASTRUCTURE 11
C. NATURAL GAS PRICING 12
SECTION 3: ANALYSIS FRAMEWORK 16
SECTION 4: AREAS OF POTENTIAL ENERGY COST SAVINGS 20
A. GAS-FIRED GENERATION SAVINGS 20
B. OIL-FIRED GENERATION DISPLACEMENT SAVINGS 23
C. INDUSTRIAL TRANSPORTATION CUSTOMER SAVINGS 24
D. LDC GAS SUPPLY SAVINGS 26
SECTION 5: ANALYSIS RESULTS 28
CONCENTRICENERGYADVISORS,INC. I
6. SECTION 1:
INTRODUCTION
A. OVERVIEW
Concentric Energy Advisors, Inc. ("Concentric") has been retained by PennEast Pipeline Company,
LLC ("PennEast”) to independently evaluate and estimate the potential savings to energy market
participants in eastern Pennsylvania and New Jersey associated with the PennEast Pipeline
project.1 As proposed, PennEast would be an approximately 114-mile, 36”-inch natural gas
transmission pipeline capable of transporting approximately 1 Bcf/d of natural gas from
northeastern Pennsylvania to Southeastern Pennsylvania and central New Jersey, with numerous
receipt and delivery points, as well as various interconnections with other natural gas transmission
pipelines along the route. The report herein provides an overview of Concentric's analysis and an
estimate of the savings that could have been achieved by natural gas and electric consumers in this
region in the winter of 2013/2014 due to the addition of the project's incremental pipeline
capacity.
B. EXECUTIVE SUMMARY
The primary conclusions from Concentric’s analysis are as follows:
• It is generally accepted that natural gas markets that are constrained during some or all
of the year, and thus reflect higher and more volatile natural gas pricing during such
periods, can benefit from additional pipeline capacity to mitigate the higher and more
volatile pricing.
• It has been well documented that the winter of 2013/2014, with its relatively severe
and prolonged cold, and resulting high levels of demand for natural gas from local
natural gas distribution companies, industrial customers and electric generators,
resulted in extremely volatile pricing and significantly higher natural gas prices in the
U.S. Northeast than had ever been previously experienced. While the winter of
2013/2014 was colder than other recent winters, it did not reach extreme levels.
Natural gas distribution companies ("LDCs") plan for "design” conditions that represent
significantly colder than normal weather to ensure reliable service to its customers even
during cold weather events, and the winter of 2013/2014 did not surpass LDC design
conditions. Because natural gas demand is expected to grow, similar weather
conditions could produce similar prices in the future, unless additional infrastructure is
built to alleviate constraints.
The sponsors of PennEast are: AGL Resources, NJR Pipeline Company, PSEG Power, South Jersey
Industries, Spectra Energy Partners ("Spectra"),andUGIEnergy Services (collectively, the "Sponsors”).
CONCENTRICENERGYADVISORS,INC. 2
7. • Additional natural gas pipeline capacity, such as proposed by PennEast, has the
potential to provide significant value to energy consumers in eastern Pennsylvania and
New Jersey by loweringnatural gas prices duringhigh price periods.
• To quantify the magnitude of the benefits that PennEast could provide, Concentric
estimated what natural gas prices could have otherwise been in the winter of
2013/2014 if an additional lBcf/day of pipeline capacity had been available by
evaluating the relationship between natural gas prices that actually occurred in eastern
Pennsylvania and New Jersey relative to the natural gas demand experienced in the
region on each day.2 All other factors were held constant, including weather,
operational issues, and the availability of natural gas and electric infrastructure.
• While recognizing that certain periods during the winter of 2013/2014 in eastern
Pennsylvania and New Jersey experienced record high natural gas prices, but did not
reach design conditions, we believe that using the most recent timeframe for which data
is fully available most accurately reflects the current market dynamics, including
recently constructed infrastructure projects, and provides a basis for reasonably
estimating potential savings that could be achieved in similar circumstances absent
additional infrastructure to mitigate the high natural gas prices experienced.
• Concentric focused on four primary areas of potential savings associated with additional
pipeline infrastructure and lower market area natural gas prices:
Savings that couldbe achievedby electric consumers whennatural gas-fired
generationresources set the electric energy price based on lower market area
natural gas prices ("Gas-Fired Generation Savings")
Savings that could be achieved by electric consumers when natural gas-fired
generation resources could displace less efficient and more costly oil-fired
generating resources, and set the electric energy price based on lower market
area natural gas prices ("Oil-Fired Generation Displacement Savings")
Savings that could be achieved byindustrial natural gas consumers that are
purchasingnatural gas supplies at lower market area natural gas prices
("Industrial Transport Customer Savings”)
Savings that couldbe achievedby LDC customers when LDCs have the
opportunity to purchase more natural gas supplies fromlower-cost,local
Marcellus Shale production as opposed to oftenhigher-cost Gulf Coast
production ("LDC Gas Supply Savings")
• Based on its analysis, and as summarized in Table 1, Concentric estimates that energy
consumers in eastern Pennsylvania and New Jersey could have saved over $890 million
in the winter of 2013/2014 had an additional 1 Bcf/d of pipeline capacity been
available.
2 Concentric relied onpublicly-available pricing, demand, and weather data for the natural gas and electric
markets for its analysis.
CONCENTRICENERGYADVISORS,INC. 3
8. Table 1:
Estimated Savings if an Additional1Bcf/dof Pipeline Capacity
HadBeen Available for the Winter of 2013/2014
(Allfiguresin$Millions)
Eastern
Pennsylvania New Jersey Total
$Gas-FiredGeneration
Oil-FiredGenerationDisplacement
Subtotal
$ $ 412.5
$ 119.1
225.8 186.7
$ $70.2 48.9
$ $ $ 531.6296.1 235.5
GasMarketSavings
LDC Gas Supply Procurement
Industrial TransportationCustomer
Subtotal
$ $ $ 106.2
$ 255.6
36.4 69.8
$ $182.5 73.1
$ $ $ 361.8218.9 142.9
Total Estimated Savings: $ $ 378.4 $ 893.4515.0
• The estimated savings figures reflected in Table 1 conservatively exclude potential
savings that may have been achieved in the electric market on "extreme peak days" in
which temperatures were coldest and natural gas demand was highest, and thus natural
gas prices were also highest.
CONCENTRICENERGYADVISORS,INC. 4
9. SECTION 2:
MARKET OVERVIEW
This section summarizes the eastern Pennsylvania and New Jersey natural gas market, providing
context for the estimated savings analysis discussed in the following sections. First, a discussion of
the natural gas demand by both LDCs and electric generators in the region is provided, followed by
a discussion of the natural gas infrastructure andnatural gas pricingin the region.
A. NATURAL GAS DEMAND
As illustrated in Figure 1, over the last five-year period for which data is available, i.e., 2009 to
2013, the demand for natural gas in Pennsylvania3 and New Jersey has steadily increased from
approximately 1,400 Bcf/year to 1,600 Bcf/year, which translates in an increase in the average
daily demand from 3,835 MMcf/d to 4,385 MMcf/dover theperiod.
Figure1:
Annual Natural Gas Consumption inPennsylvania and New Jersey4
1,800
1,600
1,400
1,200
1,000
i. 800
s
Ig 600
•3 400
200
0
2009 2010 2011 2012 2013
Residential Commercial Industrial Electric Power
Local natural gas distribution companies ("LDCs") deliver the majority of the natural gas consumed
in eastern Pennsylvania and New Jersey, servingresidential and commercial customers as well as a
significant portion of the industrial and power generation load. Certain industrial customers and
3 Note that the demand figures presented herein reflects data for the entire state of Pennsylvania as
consumption by end use data specific to eastern Pennsylvania is not published by the U.S. Energy
Information Administration ("EIA’’J. Demand trends in eastern Pennsylvania are expected to be similar
to those experiencedin the state as a whole.
4 EIA, Annual Natural Gas Consumption by End Use for New Jersey and Pennsylvania, release date
December 31, 2014.
CONCENTRICENERGYADVISORS,INC. 5
10. electric generators have direct connections to interstate pipelines, and thus are not served by the
LDCs.
The power generation segment experienced the largest growth in natural gas consumption in
Pennsylvania and New Jersey over the 2009 to 2013 period, with annual demand increasing from
approximately 375,000 MMcf (z.e., approximately 27% of the 2009 total natural gas consumption]
to approximately 580,000 MMcf (z.e., approximately 36% of the 2013 total natural gas
consumption). As a result, the power generation segment is now the largest consumer of natural
gas in Pennsylvania and New Jersey. In contrast, the share of natural gas consumption by the
residential and commercial segments in Pennsylvania and New Jersey declined from 2009 to 2013,
while the share of consumption by the industrial segment has remained almost constant.
The demand for natural gas in Pennsylvania and New Jersey rises significantly during winter
months as residential and commercial customers use natural gas to heat their homes and
businesses. In addition, demand by electric generators in the hot summer months for air
conditioning load is increasing mid-summer demand, meaning the lowest natural gas use occurs in
the shoulder months. Figure 2 illustrates the seasonality of the natural gas demand in Pennsylvania
and New Jersey, whereby the average day consumption during January 2014 was approximately
two and a half times greater than the average day consumption during September 2014. In
addition, this chart illustrates the particularlyhighnatural gas demand experienced last winter (z.e.,
November 2013 through March 2014) due to thepervasive cold weather.
Figure 2:
Monthly Natural Gas Consumptionin Pennsylvania andNew Jersey5
250
200
2. 150
C
IE
| 100
S
50
0
IMjiMIliUUUUisi
Residential Commercial Industrial Electric Power
5 EIA, Monthly Natural Gas Consumption by End Use for New Jersey and Pennsylvania, release date
December 31, 2014.
CONCENTRICENERGYADVISORS,INC. 6
11. LDCs in Eastern Pennsylvania andNew Jersey
Eastern Pennsylvania is served by four LDCs: UGI Utilities, Inc. ("UGI Utilities"); UGI Penn Natural
Gas, Inc. ("UGI Penn”); PECO Energy (“PECO”); andPhiladelphia Gas Works (“PGW"). There are also
four LDCs providing service in New Jersey: Public Service Electric and Gas ("PSEG”); New Jersey
Natural Gas ("NJNG"); South Jersey Gas ("SJG"); and Elizabethtown Gas ("Elizabethtown"). Figure 3
shows the service territory for each LDC.
Figure 3:
Service Territories of LDCs in Eastern Pennsylvania and New Jersey
'W T
•ÿh
J
cs ct;’Kv-
fee•--.r rr,,
-I
&V'
.•f UGI Utilities
UGI Pennl+J
PECO
PGW
, PSEG
SJG
I I Elizabethtown Gas
DE
,VA/ (
Table 2 presents summary operating statistics for each LDC in the region. As shown in Table 2,
PSEG is the largest LDC, and significantly larger than the other LDCs in eastern Pennsylvania and
New Jersey. All of these LDCs are projecting annual growth over the next three to five years,
ranging from approximately 0.5% to 2.7%.
CONCENTRICENERGYADVISORS,INC. 7
12. Table 2:
Eastern Pennsylvania and New fersey LDC Summary Operating Statistics6
2013
Retail Sales
Volumes
(Met)
No.of
Natural Gas
Customers
Peak Day
Sendout
(Mcf)
EasternPennsylvania
UGI Utilities
UGI Penn
PGW
PECO
357,408
163,796
498,694
498,843
116,675,523
56,733,872
73,229,988
85,834,449
654,050
416,488
616,000
759,594
Subtotal 1,518,741 332,473,832 2,446,132_
New lersev
PSEG
NJNG
1,790,240
501,595
359,732
278,871
453,524,804
67,616,570
58,997,922
52,732,119
2,973,000
690,415
495,056
440,148
SJG
Elizabethtown
Subtotal 2,930,438 632,871,415 4,598,619
Electric Utilities inEastern Pennsylvania andNew Jersey
As shown illustrated inFigure 4, there are seven investor-owned electric utilities serving customers
in eastern Pennsylvania and New Jersey.
Figure 4:
Service Territories of ElectricUtilitiesinEastern Pennsylvania andNew Jersey
i
IHY
V
'
— 7
4
n
%
/
;
YY<
I/
ft
i
PPL
MetEd
PECO
O PSEG
JCP&L
ACE
r c r
*
I
urii v4
A: wv Rockland Electric
7/ A DEf
6 Sources: EIA Form 176, Annual 1307(f) Filing materials, State LDC Filings, and information provided by
LDCs.
CONCENTRICENERGYADVISORS,INC. 8
13. In 2013, these seven electric utilities sold over 169 TWh of electricity to almost 7.5 million
customers. As shown in Figure 5, electric sales are approximately evenly split between the utilities
in eastern Pennsylvania (dotted on the graph) and those inNew Jersey (solid on the graph).7
Figure 5:
Electric Sales by Utility in Eastern Pennsylvania andNew Jersey
Share of 2013 Electric Sales by Utility
PPL
22%
MetEd
8‘
•ECO
23%
ACE
REC 7% JCPL
13%1%
The eastern Pennsylvania and New Jersey electricity market is part of the PJM Interconnection, a
regional transmission organization that coordinates the movement of wholesale electricity in the
mid-Atlantic region. The power generators located in eastern Pennsylvania and New Jersey are
dispatched by PJM in a least-cost manner, subject to certain market conditions and operational
constraints. The last generatingunit dispatched to serve demand within a particular area is known
as the "marginal unit," which sets the electric price paid by all customers in that area. As shown in
Figure 6, combined cycle (“CC") power plants and combustion turbines ("CT"), which are
predominantly fueled by natural gas, hold the largest share of generation capacity in eastern
Pennsylvania and New Jersey. In addition, natural gas-fired generation capacity has shown the
largest growth over the last several years, while coal-fired generation has shown the largest
decline, as a result of relatively low natural gas prices and increasingenvironmental restrictions on
coal-fired generation.8
7 FERC Form1data, as compiledby SNLFinancial.
Monitoring Analytics, LLC, "2014 Quarterly State of the Market Report for PJM: January through
September,” Table 12-10; and "2008 State of the Market Report for PJM,” Table 3-37.
8
CONCENTRICENERGYADVISORS,INC. 9
14. Figure 6:
Eastern Pennsylvania andNew Jersey Generation Capacity
2008 Capacity (MW) Sept 2014 Capacity (MW)
Nuclear
9,459
Nuclear
11,539
27% Coal)
11,753
28%
CC/CT
(mostly
Hydro
2,066
(mostly
Coal
mis25%
6%,
L
cc/a
(mostly
OtherHydro
2,616
Other Gas)
328212 18,16316,526
1%6% 0%39%
Growth in natural gas-fired generation is expected to continue. As stated by Market Monitoring
Analytics, LLC in their most recent State of the Market Report for PJM:
A significant change in the distribution ofunit types within the PJMfootprint is likely
as natural gas fired units continue to be developed and steam units continue to be
retired. While only 282.5 MW ofcoalfiredsteam capacity are currently in the queue,
10,475.8 MW of coalfired steam capacity are slatedfor deactivation. Most of these
retirements, 9,147 MW, are scheduled to take place byJune 1, 2015, in large part due
to the EPA’s Mercury and Air Toxics Standards (MATS) set to go into effect at that
time.In contrast, 39,287.9 MWofgasfiredcapacity are in the queue while only1,793.0
MWofnaturalgas units are planned to retire. The replacement ofoldersteam units by
units burning naturalgas could significantly affectfuture congestion, the role offirm
andinterruptiblegas supply, andnaturalgassupply infrastructure.9
While the statements by Marketing Analytics apply to the entire PJM region, the same conclusions
hold for eastern Pennsylvania and New Jersey. Over 80% of the capacity currently in the queue for
eastern Pennsylvania and New Jersey is natural gas-fired (totaling 13,140 MW), while less than 1%
is fueled by coal.10 As a result of the historical and expected future reliance on natural gas-fired
generation to meet electricity needs, demand for natural gas by electric generators is expected to
continue to grow.
9
Monitoring Analytics, LLC, "2014 Quarterly State of the Market Report for PJM: January through
September,” p. 399.
10 Monitoring Analytics, LLC, "2014 Quarterly State of the Market Report for PJM: January through
September,” Table 12-5.
CONCENTRICENERGYADVISORS,INC. 10
15. B. EXISTING NATURAL GAS INFRASTRUCTURE
LDCs purchase natural gas in production area supply basins (e.g., Gulf Coast; Marcellus), transport
it over natural gas pipelines, and then deliver it to end-use customers over the local distribution
system. Accordingly, LDCs typically have a number of natural gas supply contracts as well as
various firm transportation contracts for capacity on pipelines, and they pass on the costs of these
contracts to the customers for which they purchase natural gas supplies. Certain customers
(typically very large customers, e.g., industrials and electric generators) do not purchase their
natural gas from the LDC, instead they buy their natural gas from a third-party marketer at a
mutually agreeable price, usually tied to local market area natural gas prices. Regardless of the
price paid, natural gas generally must travel from production area supply basins to the market area
through the interstate pipeline system.
As illustrated in Figure 7, eastern Pennsylvania and New Jersey natural gas markets are served by
five major long-haul pipelines Transcontinental Gas Pipeline ("Transco") and Texas Eastern
Transmission ("TETCO") are the largest. The proposed PennEast project is also illustrated by a
dottedline on the map.11
Figure 7:
Major Natural Gas Pipelines in Eastern Pennsylvania andNew Jersey
Tennessee
%Transco
*>s
P/
%TETCO
NJ
Transco, TETCO, and Tennessee all originate in the Gulf of Mexico, and were originally built to
transport Gulf of Mexico gas supplies thousands of miles to consuming markets in the Northeast
that did not have sufficient natural gas production to meet demand. However, in the past decade,
advances in drilling technologies have made the extraction of natural gas from shale deposits across
North America more economic, adding substantial new natural gas production in places that did not
previously have significant natural gas production. Specifically, the Marcellus and Utica Shale
11 Note that the pipeline locations are approximate for illustrative purposes.
CONCENTRICENERGYADVISORS,INC. 1 1
16. formations, which cover a significant portion of Pennsylvania, West Virginia and Ohio, as well as
portions of several neighboring states, are now producing approximately 19 Bcf/d of natural gas.
Pennsylvania natural gas production ranked second in the nation as of 2013, after Texas, and
recently surpassed productionin Louisiana and offshore Gulf of Mexico production.12
The original pipeline network was not designed to transport the significant quantities of gas now
being produced in the Marcellus and Utica Shale region, creating a need for additional pipelines,
pipeline reversals, and pipeline expansions. A number of new natural gas pipeline projects,
including PennEast, have been proposed to transport the prolific natural gas production in the
Pennsylvania area to serve demand.
C. NATURAL GAS PRICING
There are generally two primary categories of natural gas pricing points: production area pricing
points and market area pricing points. Production area pricing points represent the price of the
natural gas commodity in a region in which there is significant natural gas production, (z'.e., the
wellhead, or the aggregation of production from different areas). Relevant production area price
points for eastern Pennsylvania and New Jersey include Henry Hub, a major trading point in
Louisiana that serves as a nation-wide benchmark price for natural gas, and more recently prices in
the Marcellus Shale production area, including the Transco Leidy Line ("Transco Leidy") index,
which represents the price ofnatural gas receipts onto Transco in northeasternPennsylvania.
Market area pricing points represent the price of the natural gas commodity in the area in which it
will be consumed, and reflects not only the cost of the commodity itself, but also the cost of
transportation and other value drivers based on circumstances in that particular market. Relevant
market area pricing points for eastern Pennsylvania and New Jersey include the Transco Zone 6
Non-NewYork (“TZ6NNY”) index price.13
A "basis differential" is the difference between the price of natural gas at two pricing points at a
given point in time [e.g., the difference between the Transco Leidy and TZ6NNY prices. Basis
differentials reflect the value (but not necessarily the cost) of transportation between two pricing
points at a particular time. To the extent that the basis differential between two points is
substantially higher than the cost of transportation between those same two points, and that
differential is sustained over a reasonably long period, this is an indication that there are pipeline
constraints between those points, and provides a signal to pipeline project developers that there
may be sufficient demand to contractually support the construction of new pipeline capacity to
alleviate those constraints.
12 ElA,Natural Gas MarketedProductionby State.
13 There are other published production area and market area prices in the eastern Pennsylvania and New
Jersey area, but for the purposes of this report, the focus will be on Transco Leidy and Transco Zone 6
non-New York.
CONCENTRICENERGYADVISORS,INC. 12
17. WINTER 2013/2014
It has been well documented that the winter of 2013/2014, with its relatively severe and prolonged
cold, and resulting high levels of demand for natural gas from local natural gas distribution
companies, industrial customers and electric generators, resulted in extremely volatile pricing and
significantly higher natural gas prices in the U.S. Northeast than had ever been previously
experienced despite certain new infrastructure projects being added to the region. It is important
to note that while the weather was colder than previous winters, the weather did not reach peak
design day conditions for which LDCs typically plan. Figure 8 illustrates the relationship between
production area prices (represented by Henry Hub and the Transco Leidy index prices) versus the
market area prices (representedby the TZ6NNY index price) for the winter of 2013/2014.
Figure 8:
Daily Spot Natural Gas Prices - Winter 2013/2014
$140.00
HMarket Area (T26NNY)
-Gulf Coast (Henry Hub)
-Marcellus (Transco Leidy)
$120.00
1$100.00
£
$80.00
5 $60.00
I£
1
I $40.00
$20.00
$0.00 'it nTWfTTTjttttWTTTTnT :
As shown in Figure 8, the TZ6NNY prices reached well over $100/Mcf in January 2014, and as
shown in the detailed graph in Figure 9, the TZ6NNY price exceeded $20/Mcf (the previous high
price in this region) on 13 days during the winter of 2013/2014.14
14 Daily spot midpoint prices as reportedby Intercontinental Exchange,Inc.
CONCENTRICENERGYADVISORS,INC. 13
18. Figure 9:
TZ6NNY Natural Gas Prices (Truncated at $20) - Winter 2013/201415
$20.00
$18.00
$16.00
|$14.00
r $12.00
1a. $10.00
- $8.00
2
| $6.00
$4.00
3
$2.00
$0.00
asassssassssssssssssss
The higher natural gas prices experienced in the winter of 2013/2014 caused a substantial increase
in energy costs for natural gas consumers purchasing their supplies in the market area. In addition,
due to the nature of the electric markets, wherein generators bids are significantly affected by their
fuel cost, the price of natural gas significantly affected the price of electricity. For example, Figure
10 illustrates the impact to electric prices inNew Jersey associated withhigh natural gas prices.
Figure 10:
Winter 2013/2014Electric and Natural Gas Prices
$600 $140
Electric Price - NJ Hub
$120$500
---Natural Gas Price - TZ6NNY
- $100
$400
3
-C
$80 £
- $60|
5 2$300 »2
w
I
V$200
$40
$100 $20
V. y
$0 $0
3 3oooooooo
PMfMrMtNfMrMfNfN
rH rH rH CM (N rH rH
rH1 rH
mcnmmcoÿ
TH T—1 rH rH t-l rH rH rH rH
O O
rvi rM
o
£m Cl.CM CO
rH
fN
15 SNL Financial.
CONCENTRICENERGYADVISORS,INC. 14
19. To put the impact on electric prices from high natural gas prices into perspective, Table 3 illustrates
the magnitude by which wholesale electric prices in eastern Pennsylvania and New Jersey were
higher than the previous winter. In each case, average wholesale electric prices were more than
double the prices experienced the previous winter.
Table 3:
Comparison of Wholesale Electric Pricesin Eastern Pennsylvania and New Jersey
Over the Past Two Winters
Avg.Wholesale Electric Prices
Winter
2012/2013
f$/MWh)
Winter
2013/2014
($/MWh)
Percent
Increase
EasternPennsylvania
Met-Ed Zone
PECO Zone
PPL Zone
$ 37.48
$ 37.16
$ 37.06
$ 78.27
$ 78.68
$ 78.36
109%
112%
111%
New lersev
$ 42.48
$ 39.08
$ 37.94
PSEG Zone
Jersey CentralP&L Zone
Atlantic City Electric Zone
$ 87.67
$ 82.07
$ 79.82
106%
110%
110%
There are a number of reasons for the spikes in spot natural gas prices that were experienced last
winter in major demand centers along the east coast, which include: (ij colder than normal
weather that increased peak demands; (ii] reductions in the availability of natural gas supply and
pipeline transportation attributable to these weather conditions; (iiij lower than expected storage
inventories; and (ivj increased reliance on natural gas for power generation in competitive
wholesale electric markets.16 However, while the winter of 2013/2014 was colder than other
recent winters, it did not reach extreme levels. LDCs plan for "design” conditions that represent
significantly colder than normal weather to ensure reliable service to its customers even during
cold weather events. The Polar Vortex and the rest of the winter of 2013/2014 did not surpass LDC
design conditions. Because natural gas demand from LDCs and electric generators is expected to
grow, similar weather conditions in the future could produce similar natural gas, and thus electric
prices, unless additional infrastructure is built to alleviate constraints.
16 Natural gas-fired electric generators do not have an electricity market mechanism to recover fixed
demand charges associated with reserving capacity on interstate pipelines and thus rely on interruptible
pipeline transportation, a circumstance that can cause increased competition for natural gas, and thus
cause an increase in the price ofnatural gas and electricity prices.
CONCENTRICENERGYADVISORS,INC. 15
20. SECTION 3:
ANALYSIS FRAMEWORK
It is generally accepted that natural gas markets that are constrained during some or all of the year,
and thus reflect higher and more volatile natural gas pricing during such periods, can benefit from
additional pipeline capacity to mitigate the higher and more volatile pricing. Given this, the
objective of Concentric’s analysis was to estimate, based on recent history (i.e., the winter of
2013/2014], what the market area price of natural gas paid by customers would have been had an
additional 1 Bcf/d of pipeline capacity been available to transport natural gas supplies into the
eastern Pennsylvania and New Jersey region. It should be noted that our analysis assumed that all
other circumstances that existed in the winter of 2013/2014 were unchanged, including factors
such as weather, operational issues, other natural gas supply and transportation infrastructure, and
electric market infrastructure. Clearly, different circumstances going forward will produce
different results. However, similar market conditions that recently produced such high natural gas
prices can occur again, and the analysis presented herein provides an estimate of the magnitude of
the potential financial benefits to market participants that could have been attained if additional
pipeline capacity had been available to provide greater access to natural gas, particularly when
natural gas demandin this region was at its highest.
To determine the potential natural gas cost savings that could have been realized by energy
consumers had an additional 1 Bcf/d of capacity previously been available due to PennEast,
Concentric estimated the market area natural gas prices in eastern Pennsylvania and New Jersey
that may have otherwise occurred during the winter of 2013/2014, i.e., November 2013 through
March 2014. We focused our analysis on this region since it is the area that will be directly served
by PennEast, and thus,natural gas prices in this region willbe most directly affected by the addition
of suchincremental pipeline capacity.17
Concentric based the analysis on the winter of 2013/2014 because it is the most recent winter
season for which pricing and market information is available. While recognizing that certain
periods during the winter of 2013/2014 experienced very high natural gas prices, we believe that
using the most recent timeframe for which data is available most accurately reflects the current
market dynamics and provides a reasonable estimate of potential savings that could be achieved in
similar circumstances. For example, the pipeline infrastructure in the eastern Pennsylvania and
New Jersey region that is currently operational is similar to the pipeline infrastructure that was
operational for the winter of 2013/2014, and that is much less the case for periods prior to the
winter of 2013/2014. In particular, there was substantial new pipeline infrastructure that came
online just before the winter of 2013/2014 that served the eastern Pennsylvania and New Jersey
17 Concentric recognizes that the availability of additional pipeline capacity in eastern Pennsylvania and
New Jersey could not only reduce natural gas prices within this particular region, but, assuming there
were no constraints during some or all of the year, also reduce natural gas prices in adjacent regions [e.g.,
New York City) by increasing availability of natural gas in these adjacent markets as well. These lower
natural gas prices could also reduce energy prices in the electric markets in adjacent areas. However, for
purposes of this analysis, the estimated savings associated with1Bcf/d of incremental pipeline capacity
was focused solely on eastern Pennsylvania and New Jersey.
CONCENTRICENERGYADVISORS,INC. 16
21. region (e.g., Spectra 's New Jersey-New York Expansion project; Transco’s Northeast Supply Link]
that was not online in earlier periods.18
To estimate the natural gas price reductions that would have otherwise occurred with additional
pipeline capacity, Concentric evaluated the basis differentials between Transco Leidy and TZ6NNY
that occurred during the winter of 2013/2014 relative to the amount of natural gas demand
experienced in eastern Pennsylvania and New Jersey each day. Figure 11 illustrates the
relationship between demand and basis differentials for the region. The published daily Transco
Leidy index prices were used as a proxy for the production area price of natural gas to be received
by PennEast, as this pricing point is reflective of natural gas receipts into Transco in eastern
Pennsylvania from the Marcellus supply region. The published daily TZ6NNY index prices were
used as a proxy for the prices of natural gas delivered by PennEast into the eastern Pennsylvania
and New Jersey markets. The TZ6NNY index prices reflect the price of natural gas deliveries off of
Transco for the region south and west of New York City, including eastern Pennsylvania and New
Jersey.
Figure 11:
Scatterplot of Winter 2013/2014Natural Gas Demand and Basis Differentials
$120
$110
s $100
§
$90
5 $80
••$70
3
S $60
|$50
$40
I $30
g $20
P $10
$0
4,000,000 5,000,000 7,000,000
Regional Natural Gas Demand (Mcf/d)
6,000,000 8,000,000 9,000,000
As expected, the daily basis differentials are high when demand is high, and basis differentials are
lower when demand is low, reflecting the supply/demand balance in the market. The relationship
between the daily basis differentials and natural gas demand for the region was utilized to develop
18
Spectra’s New Jersey-New York project, which provided an additional 800 MMcf/ of pipeline capacity
into service effective November 1, 2013, is an extension of the Algonquin Gas Transmission and Texas
Eastern Transmission pipeline systems, allowing gas supplies off of both of those systems, including from
the Marcellus, to serve northern New Jersey and the greater New York City metropolitan area. Transco's
Northeast Supply Direct project, which went into service in stages in August and November 2013,
provided an additional 250 MMcf/d of pipeline capacity directly to customers in Pennsylvania, New
Jersey and New York.
CONCENTRICENERGYADVISORS,INC. 17
22. revised basis differentials that were assumed would have otherwise occurred had an additional 1
Bcf/dof pipeline capacity been serving the region. The analysis assumed that the basis differentials
on each day would have been reduced by a specific percentage had additional pipeline capacity
been available. The assumed percentage reductions were established by calculating the average
basis differential for all of the days in which the demand on those days was within a particular 1Bcf
increment ("tranche”), and then comparing the average basis differential from one tranche to the
next tranche when demand was lower by 1Bcf, or stated differently, pipeline supplies and capacity
available to market participants was 1Bcfhigher.
For example, when demand in the winter of 2013/2014 in eastern Pennsylvania and New Jersey
was the highest - between 8.0 Bcf and 9.0 Bcf ("Tranche 1”) - basis differentials were also relatively
high,ranging from approximately $6.00/Mcf to $119/Mcf. However, when demand was 1Bcf lower
- between 7.0 Bcf and 8.0 Bcf ("Tranche 2") - the basis differentials were much lower on average,
and on many days under $5.00/Mcf. In fact, as shown in Table 4, the average basis differential
associated with demand levels in Tranche 2 was 90% lower than the average basis differential
associated with demand levels in Tranche 1(z.e., the percentage difference between $37.62/Mcf and
$3.69/Mcf). Thus, it was assumed that if an additional 1 Bcf/d of pipeline capacity had been
available in the winter of 2013/2014, the basis differentials experienced on the days in which
demand was highest, i.e., between 8.0 and 9.0 Bcf/d, would have been 90% lower than they
otherwise were. In other words, the analysis assumed that the basis differentials at those demand
levels would have been more reflective of the basis differentials that were actually experienced
when demand for pipeline capacity was approximately 1Bcf/d lower, and thus a greater potential
for parties to access natural gas supplies.
Table 4:
Assumed Basis Differential Reductions Based on Demand
Avg.Basis
Differential
Winter
2013/14
% Change in
Avg. Basis
Relative to
NextTranche
Tranche1: 8.0 Bcf/dto 9.0 Bcf/d $
Tranche 2: 7.0 Bcf/dto 7.9 Bcf/d $
Tranche 3: 6.0 Bcf/dto 6.9 Bcf/d $
Tranche 4: 5.0 Bcf/dto 5.9 Bcf/d $
Tranche 5: 4.0 Bcf/dto 4.9 Bcf/d $
37.62 90%
3.69 68%
1.18 36%
0.75 19%
0.61 n/a
This process for determining the percentage reduction in the basis differentials was also used for
the days that experienced lower demand [i.e., demandin Tranches 2, 3 and 4), although as shown in
Table 4, the assumed percentage reductions in the basis differentials were much lower at the lower
demand levels. Also, as shown in Table 4, the analysis assumed that if gas demand on a day was
lower than 5.0 Bcf, then then there would have been no change in the actual basis differential.
The revised market area price was determined by adding the revised basis differential to the actual
production area price (i.e., Transco Leidy) on each day. Thus, while the revised basis differentials
were assumed to be reduced by the percentages noted in Table 4, the assumed reductions in the
CONCENTRICENERGYADVISORS,INC. 18
23. market area (i.e., TZ6NNY) prices represented a lower percentage.19 Also, if the revised basis
differential was unchanged relative to the actual basis differential, the revised TZ6NNY price was
assumed to be the same as the actual TZ6NNY price.
19 For example,if the actual TZ6NYY price on particular day was $6.00/Mcfand the Transco Leidy price was
$2.00/Mcf, the basis differential would have been $4.00/Mcf. Assuming the demand on that day was
between 7.0 and 8.0 Bcf, then the assumed reductionin the basis differential on that particular day due to
the addition of an additional 1 Bcf/d of capacity would have been 68%. Thus, the revised basis
differential would have been $1.38/Mcf (i.e., a 68% reduction from $4.00/Mcf), and the revised TZ6NNY
price was assumed to be $3.38/Mcf (i.e., the Transco Leidy price of $2.00/Mcf plus the revised basis
differential of $1.38/Mcf). Therefore, this means that the percentage reduction in the actual TZ6NNY
price relative to the revised TZ6NNY price on that particular day was assumed to be 44% (i.e., the
percentage reduction from $6.00/Mcfto $3.38/Mcf).
CONCENTRICENERGYADVISORS,INC. 19
24. SECTION 4:
AREAS OF POTENTIAL ENERGY COST SAVINGS
Lower natural gas prices can provide benefits to energy consumers in a number of different
respects. For purposes of Concentric's analysis, we evaluated four primary areas in which energy
cost savings could have been achieved by consumers from lower natural gas prices due to the
availability of an additional 1Bcf/d of pipeline capacity. Two of these areas relate to the electric
market,and two of those areas relate to the natural gas market:
• Savings that couldbe achieved by electric consumers whennatural gas-fired generation
resources set the electric energy price based onlower market area natural gas prices
("Gas-Fired Generation Savings")
• Savings that could be achieved by electric consumers when natural gas-fired generation
resources could displace less efficient and more costly oil-fired generatingresources,
and set the electric energy price based onlower market area natural gas prices ("Oil-
Fired Generation Displacement Savings")
• Savings that could be achieved by industrial natural gas consumers that are purchasing
natural gas supplies at lower market area natural gas prices ("Industrial Transport
Customer Savings")
• Savings that could be achieved by LDC customers when LDCs have the opportunity to
purchase more natural gas supplies fromlower-cost,local Marcellus Shale production
as opposed to oftenhigher-cost Gulf Coast production ("LDC Gas Supply Savings")
The basis for savings in each of these areas and the approach utilized by Concentric to estimate
savings for each area are described in more detail below. As described, we estimate that had an
additional1Bcf/d of pipeline capacity been available in the winter of 2013/2014,natural gas prices
in eastern Pennsylvania and New Jersey would have otherwise been tempered and not reached the
levels that they in fact did, and consumers in the region couldhave potentially saved, on a combined
basis, over $890 millionin reduced natural gas and electric power costs.
A. GAS-FIRED GENERATION SAVINGS
As previously noted, the wholesale generating resources in eastern Pennsylvania and New Jersey
are a part of PJM, and natural gas-fired generationplays a critical role in PJM, with the costs of such
generating resources often setting the price of power that consumers pay. Natural gas-fired
generators operating in the competitive electric markets in these regions typically purchase gas at
local spot market prices,meaning that they make daily purchases of natural gas when their facilities
are called upon by PJM to operate. As a result, the availability of additional natural gas in eastern
Pennsylvania and New Jersey during the winter of 2013/2014 could have lowered natural gas
prices in this region and correspondingly reduced wholesale electric energy prices. In other words,
if an additional 1 Bcf/d of capacity had been available to market participants in the winter of
2013/2014, thus dampeningmarket area natural gas prices, that wouldinturn have translated into
CONCENTRICENERGYADVISORS,INC. 20
25. lower electric energy prices in those hours when electric prices were largely set by gas-fired
generation.
Accordingly, for purposes of the analysis, Concentric utilizedits estimate of lower natural gas prices
to estimate the savings that could have been achieved in the electric market during hours in which
natural gas-fired generation largely set the energy price in eastern Pennsylvania and New
Jersey. To quantify the potential benefits to electricity customers, we utilized the following
information and assumptions pertaining to the winter of 2013/2014:
• Hourly electric energy prices reported by PJM for the day ahead energy market for the
PJM zones in eastern Pennsylvania and New Jersey;20
• Hourly electric demand (i.e., load) for the PJM zones in eastern Pennsylvania and New
Jersey;
• Data provided by the PJM market monitor regarding the fuel type of the generating
units setting the electric energy prices in eachhour.
The data provided by the PJM market monitor reflect the percentage of five-minute increments in
each hour in which a specific fuel type set the energy price. Concentric assumed that the fuel type
in each hour that set the price for the largest percentage of the five-minute increments established
the price overall in that hour. To the extent that two or more fuel types set the energy price for an
equivalent percentage of the five-minute increments in a particular hour, it was assumed that, if
natural gas was one of those fuel types, natural gas-fired generation set the price in that hour.
Alternatively, it was assumed that if an oil or oil-based fuel type was one of the fuel types that
equally set the energy price in a particular hour (but natural gas was not), it was assumed that an
oil-fired generating unit set the price in that hour. Table 5 provides a summary of the number of
the hours in the winter of 2013/2014 in which it was assumed that natural gas-fired generation or
oil-fired generation set the electric energy price in eastern Pennsylvania and New Jersey.
Table 5:
Number of Hours Natural Gas or Oil-Fired Generation Assumed to Set the
Wholesale Electric Energy Price inEastern Pennsylvania and New Jersey
NatGas Oil
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Total
144 24
159 43
152 77
314 30
256 38
1025 212
First, for each hour of the winter of 2013/2014, the actual electric energy cost based on the energy
price and electric demand data reportedby PJM was determined. Then, based on our analysis,if the
20 The PJM zones for which hourly price and load were obtained were: the New Jersey Hub, Metropolitan
Edison Company, PECO and PPL.
CONCENTRICENERGYADVISORS,INC. 21
26. estimated revised natural gas price applicable in any hour would have been lower had additional
pipeline capacity otherwise been available, and natural gas was the marginal fuel setting the price
of electric energy in that particular hour, a new electric energy price was calculated. Specifically,
the new electric energy price was calculated by assuming that the percentage reduction in the
natural gas price in any hour would translate into an equivalent percentage reductionin the electric
energy price. For example, if the market area natural gas price (z'.e., the TZ6NNY price) was
assumed to be reduced by 20% on a particular day due to the availability of additional pipeline
capacity, then it was generally assumed that the electric energy prices in the hours of that day when
the price was set by a natural gas-fired generating unit would have also been reduced by 20%.
Therefore, for those hours during the winter of 2013/2014 in which natural gas was setting the
electric energy price, a revised electric energy cost was calculated, which was then compared to the
actual electric energy cost in that hour to determine the potential savings associated with providing
additional pipeline capacity.
The exception is that Concentric conservatively assumed that there would be no such electric
market savings on days when demand for pipeline capacity in eastern Pennsylvania andNew Jersey
was very high ["extreme peak days"). Currently, during the winter peak period, gas is primarily
flowing from the Marcellus and Gulf Coast producing areas to markets in eastern Pennsylvania and
New Jersey and the major pipelines serving the area are very highly utilized. PennEast would
provide an additional 1Bcf/d of capacity to the region generally and, as discussed, thus tend to
reduce natural gas prices that would otherwise be experienced. However, during periods of
extremely high demand when pipeline capacity in the region is highly constrained, the addition of
such additional capacity may not result in lower market area prices in areas north (or downstream)
of the terminus of PennEast without additional pipeline capacity on other pipelines (e.g., Transco or
TETCO) to allow additional gas to reachmarkets innorthernNew Jersey (see the map in Figure 7).
As a result, shippers [e.g., LDCs) that directly connect to PennEast, or hold pipeline capacity to take
gas from PennEast to points north of PennEast will still achieve benefits, even on extreme peak
days; however, parties that have not contracted for pipeline capacity and are paying local market
prices may not see a price benefit provided by the additional capacity of PennEast on extreme peak
days when pipeline utilizationis very high. In contrast, Concentric expects that parties south of the
terminus of PennEast would be able to realize a benefit from lower gas prices resulting from the
addition of PennEast capacity throughout the winter, including on extreme peak days, either
through upstream capacity on other pipelines not being utilized because of parties using PennEast
capacity, or through the ability to effectuate deliveries in those locations through displacement or
backhauls.
While information is available regarding when gas-fired generating units set the electric energy
price in PJM, information is not publicly available as to which gas-fired generating unit or the
location of the unit setting the price. Based on the assumption that lower natural gas prices may
not be realized at points north of PennEast during extreme peak days, and since it is not known
whether the location of the generation unit setting the electric energy price was north or south of
PennEast, it was conservatively assumed that no savings would be achieved by lower electric
energy prices on extreme peak days.
CONCENTRICENERGYADVISORS,INC. 22
27. Concentric defined an extreme peak day as any day when demand in eastern Pennsylvania and New
Jersey was greater than 8 Bcf or the HDDs were greater than 46.21 As previously discussed (see
Table 4), it was estimated that for those high demand days, the basis differential between Transco
Leidy and TZ6NNY would have otherwise been reduced by 90%, and thus the TZ6NNY price would
have also been reduced, due to an incremental 1 Bcf/d of pipeline capacity into the region.
However, since demand on those days was very high, and thus have been defined as extreme peak
days, the natural gas price benefit in the market area on such days was conservatively assumed to
not flow through to the electric market for purposes of estimatingthe savings herein.
Based on its analysis, Concentric estimated that electric consumers in eastern Pennsylvania and
New Jersey could have saved approximately $226 million and $187 million, respectively, in the
winter of 2013/2014 had an additional 1Bcf/d of capacity been available to temper natural gas
prices when gas-fired generators set the electric price. Concentric recognizes that the electric
energy markets are very complex, reflecting the bidding behavior of numerous generating units
based on their respective cost structures, market strategies and market conditions. As described,
the analysis reflected herein makes the simplifying assumption that all else would have been equal
in a circumstance in which natural gas prices were reduced. While this may not have in fact been
the case, we believe it is a reasonable means of estimating the savings that could have been
achieved in the wholesale electric market associated with gas-fired generation had additional
pipeline capacity been available.
B. OIL-FIRED GENERATION DISPLACEMENT SAVINGS
Electric generation fueled by oil-based products (e.g., light fuel oil, heavy fuel oil, kerosene] are
generally more expensive than other forms of generation and thus are utilized to produce power
only during periods of peak electric demand when less expensive generating resources are either
already operating or otherwise unavailable. The availability of 1 Bcf/d of incremental pipeline
capacity into eastern Pennsylvania and New Jersey in the winter of 2013/2014 would have created
an opportunity for natural gas-fired generation that was unable to purchase natural gas, either due
to constrained pipeline capacity or because gas prices were too high, to operate instead of oil-fired
generation in those hours when oil-fired generation was called upon by PJM to operate. Effectively,
the availability of additional natural gas could have created the opportunity for natural gas-fired
generation to displace oil-fired generation, and thus potentially lower costs to electric consumers in
the hours in which such displacement could have occurred. Additionally, over the longer-term,
with increased access to natural gas supplies,lower cost natural gas-fired generating capacity could
also be constructed to displace the more expensive oil-fired generating units, creating the further
opportunity for future savings to electric consumers,
21 Heating degree days ("HDDs"] are defined as the magnitude of the difference that the actual temperature
is less than 65 degree Fahrenheit. For example, if the average daily temperature on a particular day was
30 degrees Fahrenheit, then that day would be characterized as having 35 HDDs (z'.e., the difference
between 65 and 30], Not surprisingly, since natural gas demand is largely a function of weather, when
the HDDs on a particular day were greater than 46, the demand was also greater than 8 Bcf.
CONCENTRICENERGYADVISORS,INC. 23
28. Accordingly, Concentric estimated the savings that may have been achievable in the electric market
duringhours in which oil-fired generation set the electric energy price in eastern Pennsylvania and
New Jersey during the winter of 2013/2014. This analysis relied upon the same hourly pricing,
load and marginal fuel data from PJM as just described in the Gas-Fired Generation Savings analysis.
Furthermore, it was assumed that in those specific hours when oil-fired generation was setting the
electric energy price, that price wouldhave otherwise been no higher than the electric energy price
in an hour during that same day when the electric energy price was set by a natural gas-fired
generator. Thus, the estimated savings in those hours when oil-fired generation was setting the
electric energy price were based on the difference between the actual electric energy price and the
revised electric energy price estimated to have occurred if additional natural gas pipeline capacity
and supply had been available, multiplied by the applicable load in that hour. Again, however, the
exception is that Concentric’s analysis also conservatively did not assume any savings associated
with natural gas-fired generation displacing oil-fired generation during extreme peak days. This
was done for the same reasons previously discussed regarding the Gas-Fired Generation Savings
analysis.
With the opportunity for oil-fired generation to be displaced by lower cost natural gas-fired
generation, it is estimated that electric consumers in eastern Pennsylvania and New Jersey could
have saved approximately $70 million and $49 million, respectively, in the winter of 2013/2014
had an additional 1Bcf/d of capacity beenavailable to temper natural gas prices.
C. INDUSTRIAL TRANSPORTATION CUSTOMER SAVINGS
Unlike most residential and smaller commercial natural gas customers, many industrial customers,
which can have very substantial daily natural gas requirements, procure their own natural gas
supplies as opposed to having their LDC purchase such supplies on their behalf. Such industrial
customers are referred to as "transportation" customers of the LDC since the LDC only has to
transport through their distribution system, not purchase, the gas for these industrial customers.22
Industrial transportation customers generally purchase their supplies from third-party marketers
and these supplies are typically priced based on market area price indices (as opposed to
production area price indices reflective of Marcellus or Gulf Coast prices).
To estimate the savings that industrial transportation customers in eastern Pennsylvania and New
Jersey may have achieved in the winter of 2013/2014 due to additional pipeline capacity
dampening market area natural gas prices, Concentric first determined the total natural gas
demand for these customers. Table 6 illustrates the 2013 annual demand for the industrial
transportation customers in the service territories of the LDCs in eastern Pennsylvania and New
Jersey.23
22 Customers for which the LDC both purchases natural gas supply and pipeline transportation service, as
well as distributes that gas to the customer, are knownas "sales” customers.
23 The 2013 data was the most recently available information at the time this analysis was conducted.
CONCENTRICENERGYADVISORS,INC. 24
29. Table 6:
2013 Annual Natural Gas Demand for the Industrial Transportation Customers
in Eastern Pennsylvania andNew Jersey
Assumed
Daily
Demand
(Mcf/dJ
Annual
Demand
(McQ
EasternPennsylvania
PECO Energy
PhiladelphiaGas Works
UGI PennNaturalGas
UGI Utilities
27,022,708
7,454,323
19,576,624
31,175,995
74,035
20,423
53,635
85,414
Subtotal 85,229,650 233,506
New lersev
New Jersey Natural Gas
ElizabethtownGas
2,753,001
11,468,722
28,671,461
13,684,531
7,542
31,421
78,552
37,492
Public Service Electric & Gas
SouthJersey Gas
Subtotal 56,577,715 155,007
While natural gas usage patterns vary by customer based on their specific circumstances, industrial
customers’ demand as a whole is generally muchless weather-sensitive than it is for residential and
commercial natural gas customers. Therefore, it was assumed that these industrial customers have
consistent demand throughout the year.
Next, to estimate the potential savings that these customers could have achieved, Concentric
assumed that all of the industrial transportation customers in eastern Pennsylvania and New Jersey
purchase their natural gas supplies at market-area prices, and thus would have benefitted from
additional pipeline capacity lowering the market area spot natural gas prices last winter. Thus, the
estimated savings for the industrial transportation customers were calculated by multiplying the
daily demand for these customers by the difference between the actual market area price (again,
the TZ6NYY price] and the revised market area price discussed previously. Again, the exception
was that no savings were assumed to be achievable by industrial transportation customers in
northern New Jersey on extreme peak days. As described previously, the analysis conservatively
assumed that market area prices north of PennEast would not be reduced as a result of additional
capacity on extreme peak days, and thus industrial transportation customers located north of
CONCENTRICENERGYADVISORS,INC. 25
30. PennEast in northern New Jersey that were purchasing natural gas supplies at market area prices
would not have achieved the benefit of a natural gas price reduction on extreme peak days.24
Based on the analysis, it is estimated that industrial transportation consumers in eastern
Pennsylvania and New Jersey could have saved approximately $182 million and $73 million,
respectively, in the winter of 2013/2014 had an additional 1Bcf/d of capacity been available and
otherwise dampened market area natural gas prices.
D. LDC GAS SUPPLY SAVINGS
Most LDCs do not purchase a significant amount of natural gas to serve their sales customers at
market area prices, but rather purchase supplies directly in producing areas and transport the gas
over long-haul pipelines to their distribution systems. Thus, most LDC customers are largely
insulated from market area price spikes, such as occurred in the winter of 2013/2014 in the U.S.
Northeast. LDCs in the Northeast have traditionally relied upon gas supply purchased in the Gulf
Coast, transporting that gas via long-haul pipelines to their service territories. However, with the
advent of significant natural gas supply development in the Marcellus and Utica shale basins located
close to the Northeast markets, many LDCs have diversified a portion of their gas supply portfolios
to access natural gas from the Marcellus and Utica basins. The continued prolific development of
natural gas supplies from these shale basins has caused an abundance of supply in the region, and
thus prices in these producing regions have consistently traded below the prices for natural gas
produced along the Gulf Coast. Figure 12 illustrates the differences in natural gas prices in the
Marcellus versus the Gulf Coast during the winter of 2013/2014.
24 Concentric assumed that the demand associated with the industrial transportation customers of PSEG
and Elizabethtown were representative of the industrial transportation customer demand in northern
New Jersey that may not otherwise benefit on an extreme peak day from a natural gas price reduction
associated with incremental pipeline capacity. The entire service territory of these two LDCs is not
located in northern New Jersey. In addition, a portion of NJNG's service territory is also located in
northern New Jersey. However, for purposes of the analysis, Concentric believes that using the demand
of the industrial transportation customers of PSEG and Elizabethtown as representative of such demand
innorthern New Jersey is reasonable.
CONCENTRICENERGYADVISORS,INC. 26
31. Figure 12:
Natural Gas Price Differences between the Marcellus andGulf Coast Producing Areas
$9.00
$8.00
Basis Differential
-Gulf Coast (Henry Hub)
-Marcellus (Transco Leidy)
$7.00
$6.00
|S5 W
£ $4.00
$3.00
| $2.00
$1.00
iJWS
1
$0.00
$(1.00)
IIIIIIII1 1 1 1 1 1 1 1 11 1 1 1 1
The basis differential between natural gas prices in the Marcellus and along the Gulf Coast, creates
an opportunity for LDCs to attain savings by switching the location of their purchases from the Gulf
Coast to the Marcellus. Concentric has not evaluated whether or to what extent LDCs in eastern
Pennsylvania and New Jersey have shifted their natural gas purchases, or whether they intend to do
so in the future. Rather, for purposes of the analysis, Concentric has assumed that half of the 1
Bcf/d of capacity of PennEast could have been utilized to purchase Marcellus supplies rather than
Gulf Coast supplies. Additionally, Concentric assumed that pipeline transportation costs, including
the cost required for pipeline fuel, are equivalent from the Gulf Coast versus the Marcellus, and that
LDCs would have been able to realize the full pricing differential between the Gulf Coast and
Marcellus prices last winter.
Accordingly, it is estimated that LDCs in eastern Pennsylvania and New Jersey could have saved
approximately $106 million in total in the winter of 2013/2014 had PennEast been available and
provided an opportunity for greater reliance on relatively cheaper Marcellus production. Allocating
the total savings to eastern Pennsylvania and New Jersey based on each region's respective gas
sales volumes for 2013 would result inan estimated savings of $36 and $70 million, respectively.
CONCENTRICENERGYADVISORS,INC. 27
32. SECTION 5:
ANALYSIS RESULTS
Table 7 summarizes the estimated savings for each of the four categories that Concentric evaluated,
with the savings presented separately for eastern Pennsylvania and New Jersey.
Table 7:
EstimatedEnergy Savings if an Additional1Bcf/d of Pipeline Capacity
HadBeen Available for the Winter of 2013/2014
(AllfiguresinSMillions)
Eastern
Pennsylvania New Jersey Total
Electric MarketSavings
Gas-FiredGeneration
Oil-FiredGenerationDisplacement
Subtotal
$ $ $ 412.5
$ 119.1
225.8 186.7
$ $70.2 48.9
$ $296.1 235.5 $ 531.6
$ $LDC Gas Supply Procurement
IndustrialTransportation Customer
Subtotal
36.4 $ 106.2
$ 255.6
69.8
$$ 182.5 73.1
$ $ $ 361.8218.9 142.9
TotalEstimatedSavings: $ $ $ 893.4515.0 378.4
As reflected in Table 7, it is estimated that natural gas and electric customers in eastern
Pennsylvania and New Jersey could have saved approximately $893 million during the winter of
2013/2014 had an additional 1Bcf/d of incremental natural gas pipeline capacity been available,
with approximately 60% of those savings benefiting electric consumers and 40% benefiting natural
gas consumers.
It is important for policy makers and other stakeholders to understand that while the potential
savings estimated herein are quite large, in periods of elevated demand when market area natural
gas prices can increase significantly, the opportunity for achieving consumer savings from lowering
natural gas prices through additional pipeline capacity can be substantial. As discussed, the
analysis herein has excluded potential savings in the electric market and for industrial
transportation customers in northern New Jersey on extreme peak days, which are the days when
natural gas demand and market area gas prices were highest, and in fact, higher than ever before
experienced. Therefore, to the extent that additional infrastructure such as PennEast could have
also had the effect of reducingmarket area natural gas prices on those extreme peak days, there is
the potential that significant savings in addition to the savings reflected in Table 7 could have been
achieved.
CONCENTRICENERGYADVISORS,INC. 28