Remember, the price of nat gas is of little concern to us, it is the demand for it. The more demand, the more gas goes through our “toll road” companies $KMI, $WMB:
In the News:
New gas-fired power plants are concentrated near major shale plays
In 2015, a combination of low natural gas prices, increases in gas-fired generation capacity, and coal power plant retirements led to a 19% annual increase in gas-fired power generation, with the gas share of total generation increasing from 28% in 2014 to 33% in 2015. The April 2016 Short-Term Energy Outlook forecasts that this year, for the first time, natural gas-fired generation will exceed coal generation in the United States on an annual basis. Growth in gas-fired generation capacity is expected to continue over the next several years as 18.7 gigawatts (GW) of capacity, completed in 2016 or currently under construction, comes online between 2016 and 2018. This represents a 4% increase over the gas-fired capacity level at the end of 2015.
Many of these additions are concentrated around the prolific Marcellus and Utica shale region, largely located in Pennsylvania, West Virginia, and Ohio, which have been leading the growth in U.S. natural gas production over the past several years. Among the states in relatively close proximity to the Marcellus and Utica, Virginia will account for the largest cumulative additions of gas-fired capacity over the 2016-18 period, with 2.3 GW of gas-fired capacity under construction, followed by Ohio with 1.9 GW, Pennsylvania with 1.8 GW, and Massachusetts with 0.7 GW, according to EIA’s Electric Power Monthly.
Natural gas production from the Eagle Ford and Haynesville shale resources, located in Texas and Louisiana, has also grown, and there are notable levels of gas-fired capacity under construction in those areas. Texas has the second largest cumulative additions of gas-fired capacity, at 3.2 GW over the 2016-18 period, with neighboring Louisiana at 0.8 GW. In addition for the same period, Texas far exceeds the other states in planned gas-fired capacity with received and pending permits to construct 6.6 GW (cumulatively) over 2016-18.
New gas-fired capacity additions, particularly those located around Marcellus and Utica shales, are being built in part to replace retired coal generation capacity. Since 2015, after the Environmental Protection Agency’s Mercury and Air Toxics Standards rules went into effect, more than 18 GW of electric generating capacity was retired, of which coal plant retirements accounted for more than 80%. Almost one half of retired coal capacity was located in Ohio, Georgia, and Kentucky, while other states with traditionally high levels of coal-fired electricity generation, such as Virginia, West Virginia, and Indiana, each retired at least one GW of coal capacity in 2015.
Florida has the largest cumulative additions of gas-fired capacity, at 3.8 GW in 2016-18. This expansion is driven by retirements of older less efficient coal units, and replacement and modernization of oil-fired capacity.
US demand continues to rise across all sectors…
