- DAILY GPI
- MEXICO GPI
- SHALE DAILY
Natural gas from the Marcellus and Utica shales could find a steady home in the South, where the fuel continues to account for a larger share of power generation, the Energy Information Administration (EIA) said Tuesday in a Today in Energy post.
Natural gas accounted for 42% of electricity generation in the region last year and far exceeded the national average of 34%, EIA said.
Driven by low gas prices, stringent regulations, aging facilities and the need for plants that can come up to power faster to back up increasing renewable energy sources, coal has ceded more power generation across the country to natural gas in recent years. U.S. gas electricity generation surpassed coal for the first time in 2016. In the South, however, where both fuels dominate power generation, gas surpassed coal in 2012, 2015 and 2016, the EIA said.
Parts of the southern gas market have traditionally been supplied by the Gulf Coast. But coal-to-gas switching across the South has strengthened demand and stoked a bevy of market-pull greenfield pipeline projects designed to carry more Appalachian gas supply to the area.
EIA analyzed the West South Central, East South Central and South Atlantic census divisions for its findings. Those areas include Arkansas, Louisiana, Oklahoma, Texas, Alabama, Kentucky, Mississippi, Tennessee, West Virginia, Delaware, Maryland, and states that extend along the Atlantic Ocean to Florida.
Coal’s share of total electricity generation in the region has declined markedly in the last decade, going from 50% in 2006 to 29% in 2016. EIA noted, however, that the fuel mix varies by state. In West Virginia, for example, gas accounts for only 2% of power generation, while in Delaware it has accounted for as much as 89%.
Most of the southern states that still rely heavily on coal for electricity are in the northern and central parts of the Appalachian Basin, where some of the nation’s major coal mining operations take place, EIA noted. West Virginia and Kentucky use mostly coal to produce power, where it accounts for 94% and 83% of generation, respectively.
New electricity capacity in the South, EIA noted, has come primarily from gas and wind, with an additional 47 GW and 25.6 GW installed, respectively, between 2006 and 2017. EIA said 9.6 GW of coal capacity was added from 2007 to 2013 in the South. However, more coal-fired units were retired than any others, with 20.8 GW taken offline in the last decade. No coal units have been installed in the region since 2013, the EIA said.
To feed that demand, Transcontinental Gas Pipeline Co. LLC (Transco) placed one of the latest projects into service on Dec. 1. The Virginia Southside Expansion Project II was brought online to serve Dominion Virginia Power’s need to fuel a new 1,580 MW gas-fired power plant in Greensville County, VA. Construction of the project, designed to provide 250,000 Dth/d of firm transportation capacity to a delivery point on a new lateral off Transco's Brunswick Lateral in Virginia, wasapproved by the Federal Energy Regulatory Commission 14 months ago [CP15-118].
Gas pipeline projects to serve the South include the Mountain Valley Pipeline, Atlantic Coast Pipeline and Atlantic Sunrise. Existing interstate systems have answered the call as well with smaller expansions, such as Transcontinental Gas Pipe Line Co. LLC’s Leidy Southeast and Texas Eastern Transmission LP’s Access South and Adair Southwest projects, to name a few.