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Ritter OKs bill on natural-gas power plants
Joe Hanel, Durango Herald
Flanked by two Southwest Colorado legislators, Gov. Bill Ritter on Monday signed into law a bill that could trade coal power plants for natural gas-powered ones.
In a morning ceremony in front of the Capitol, Ritter signed House Bill 1365, by Rep. Ellen Roberts, R-Durango, and Sen. Bruce Whitehead, D-Hesperus. The other sponsors were Rep. Judy Solano, D-Brighton, and Sen. Josh Penry, R-Grand Junction.
Ritter’s office hatched the plan, along with Front Range utility Xcel Energy.
“It’s the crescendo of all we’ve done, the capstone of all we’ve done,” said Ritter, who has made clean energy his signature issue.
The bill attracted a coalition of former enemies because it has something for many interest groups. For the state’s major environmental groups, it promises cleaner air and fewer greenhouse gas emissions. For the natural-gas industry, Western Slope lawmakers and Republicans in general, it offers the prospect of increased drilling. For Xcel and the state government, it shows a way to comply with potentially expensive clean air standards.
HB 1365 helps Xcel retire coal plants on the Front Range in order to help the region comply with upcoming federal clean-air laws. It allows the company to bill its customers for upgrades to natural gas or other cleaner sources of power.
“The naysayers said there was no way environmentalists, gas companies and a public utility could work together,” Ritter said…
(20 April 2010)
Three themes emerge from Algeria’s gas exporters’ meeting
Carola Hoyos, Financial Times
Three themes have emerged from the gas exporters meeting in Algeria.
- The developing courtship of Qatar and Russia
- Disquiet about Algeria’s idea of forming a gas cartel and gas exporters reaffirming their love of the oil/gas price link
- New countries seeking membership
It is still early days, but here is a collection of interesting quotes – arranged along theme lines – from news wires covering the meeting…
(19 April 2010)
Gas exporters push for prices to be linked to crude
Tamsin Carlisle, The National
The Gas Exporting Countries Forum (GECF), made up of nations controlling 70 per cent of the world’s gas reserves, has dropped an Algerian proposal to cut gas exports, thereby proving it is no “Gas OPEC”.
Instead, ministers from its 11-member states resolved yesterday to push for gas prices to be linked to market prices for crude.
“All ministers agreed and supported that we continue our efforts to achieve indexing gas to oil,” the Russian energy minister, Sergei Schmatko, said on Monday after the group’s latest meeting in Oran, Algeria.
The Algerian energy minister, Chakib Khelil, who headed the meeting, said he hoped the decision would “mark a new era” for the organisation.
Hopes are one thing, results are another; and Mr Khelil, who may already be frustrated by the group’s lack of enthusiasm for his proposal to limit gas supplies, is likely to be disappointed.
Gas producers worldwide have been dismayed by a roughly 50 per cent drop in the past two years in gas prices on spot markets that are becoming increasingly international as improved technology for liquefying gas, as well as larger tankers, has made it economical to transport the fuel across oceans. The price decline has been blamed on the recession, which lowered global gas demand, combined with an unexpected surge in US gas output just as other gas producers were ramping up export capacity.
The US emerged last year as the world’s biggest gas producer, narrowly eclipsing Russia, although – unlike Russia – it still consumes more gas than it pumps. The increased output was due to a parallel round of technological improvements in a field so esoteric that it went unnoticed by most market watchers.
…It is certainly not surprising that major gas exporters such as Russia, Qatar and Algeria believe in the “unfairness” of gas being priced much lower than oil on the basis of thermal content.
The problem with that, says Mark Finley, the general manager of global gas markets at BP, is that gas seldom competes directly with oil in today’s markets. It is used predominantly as a fuel for generating electricity and to provide heat and refrigeration for industries and buildings. Oil is now primarily a transportation fuel.
The other main fossil fuel used worldwide for power generation is coal, which is cheap because of abundant reserves and because climate change activists want it left in the ground.
(2X April 2010)
A contrarian makes another call – this time, natural gas
David Parkinson, Globe and Mail
When it comes to predicting the price of oil (CL-FT83.740.060.07%), Henry Groppe has made a long career out of zigging when others were zagging. So why should he be any different when talking about natural gas (NG-FT4.120.164.05%)?
Mr. Groppe – the octogenarian patriarch of Texas petroleum industry analysts Groppe Long & Littell – doesn’t buy the prevailing wisdom that New York Mercantile Exchange natural gas prices are dead in the water, stuck around $4 to $5 (U.S.) per million British thermal units even as demand recovers, awash in supplies and with much more on the way.
No, his analysis (and more than 50 years of experience) tells him that gas inventories are about to get a lot tighter, that new supplies are overstated, and that prices are headed north of $8 by the end of summer.
Why is he so sure he’s got it right and most everyone else has it wrong?
Because, he contends, shale gas – the previously unattainable source of vast gas supplies that has been unlocked by new high-tech horizontal drilling advancements – is not the holy grail it’s been cracked up to be. Not even close…
(18 April 2010)
UK natural gas storage: The politics, and the pundits
Ed Crooks, Financial Times
Gas storage has, unsurprisingly, not featured as a prominent issue in the UK general election campaign. The public only notices its gas supply if it fails to arrive at the turn of a knob, and when the bill comes. There is also, as discussed in an earlier post, a remarkable degree of consensus between Labour and Conservative parties about the right way forward. (The Liberal Democrats are also broadly in agreement, although on this as on many issues there is rather more difference between them and the other two parties than there is between Labour and Conservatives.)
However, while the politicians may be all of one mind, and looking for second-order points of difference so they can attack each other, there is a much greater gulf between them and some of Britain’s leading energy experts.
In comments to that previous post, Nick Grealy of the website www.nohotair.co.uk, attacked Labour and the Conservatives in particular – he has had some kinder things to say about the Lib Dems – over the their refusal to acknowledge the trasformative potential of US unconventional gas production. He argues that British politicians in general are too hung up on gas storage, and have been propagating some alarmist misconceptions about the country’s vulnerability to gas supply disruption.
…In spite of the arguments of these authorities, however, I think the politicians are on to something on this one. Domestic production does indeed explain why the UK has in the past had relatively less gas storage than France or Germany. Yet the UK’s gas production from the North Sea and Irish Sea has been in decline through the past decade, and that decline is likely to continue or even accelerate. By the end of the decade, Britain could be importing 80 per cent of its gas – compared to about a third today – and will look more like France and Germany than it does today.
(21 April 2010)
