Canada / Gulf Coast / Shale Daily / Mid-Continent / Northeast / Rockies/Other

Shale Plays Help Drive NatGas-Fired Power Additions Across Country

Increasing natural gas production, particularly from shale plays in the Northeast and Southwest, is expected to boost gas-fired power capacity across the country in the coming years, especially in some Mid-Atlantic states, Texas and Florida, according to the Energy Information Administration (EIA).

Those regions currently lead the country for natural gas power plants that are either being reviewed or that are under construction.

The increasing capacity has been influenced by a combination of factors, including proximity to prolific shale gas plays, coal-fired power plant retirements and burgeoning access to natural gas pipeline infrastructure. The EIA said Thursday that natural gas-fired power generation increased 19% nationwide in 2015, thanks largely to those factors and the low gas prices they have created.

Of the 18 GW of electric generating capacity that was retired in the United States last year, 80% was coal-fired (see Daily GPIMarch 8). Natural gas surpassed coal as the leading fuel for domestic power generation for the first time in April 2015 (see Daily GPIMarch 24), and according to EIA's May Short-Term Energy Outlook, it will exceed coal generation this year on an annual basis.

The agency said growth is expected to continue over the next few years as 18.7 GW of new natural gas-fired capacity is expected to come online between 2016 and 2018. Florida has the largest cumulative additions of gas-fired capacity currently under construction, with three plants that have a combined capacity of 3.8 GW. The retirement of older coal units and the replacement of oil-fired facilities has led to an expansion of gas pipelines in the region and the plants that will feed off them.

Mid-Atlantic states, including Virginia, Ohio and Pennsylvania, also have the most regulatory permit filings for new gas-fired capacity additions, EIA said. Pending permits in those parts of the country have a combined 12.1 GW of capacity that's expected to come online by 2018.  Texas leads the nation in permit filings, the agency added, with permits pending to construct 6.6 GW by 2018.

Many additions are near the Marcellus and Utica shales, where increasing gas production has prompted more plans for natural gas-fired plants. Virginia leads the way, with 2.3 GW of gas-fired capacity under construction, followed by Ohio with 1.9 GW and Pennsylvania with 1.8 GW.

According to data recently obtained from state agencies by NGI, more than 30 natural gas-fired power plants have been approved in Ohio, Pennsylvania and West Virginia since 2012 (see Daily GPIMay 13). Most of those, or 26 facilities, have been approved in Pennsylvania. Several other applications for new facilities are pending, while expansions at existing plants have also been approved and other developers plan to file more applications.

Expanding pipeline networks in the Northeast and elsewhere are increasing takeaway capacity to feed the new plants. An EIA map released Thursday shows new gas-fired power additions under construction across the country from east to west. Last year, 6 Bcf/d was commissioned in the Northeast alone, while another 2.2 Bcf/d is currently under construction in the region.

The nation's leading natural gas-producing state, Texas, is also witnessing a rapid expansion of natural gas-fired capacity. There is currently 3.2 GW under construction there that's expected to come online by 2018.

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