The Washington Utilities and Transportation Commission (UTC) has approved a multi-year rate plan for Puget Sound Energy (PSE) to increase annual limits for natural gas and electricity rates over the next three to four years. PSE’s gas rates would increase by $9.1 million, or 1.55%, and power rates would increase by $52.3 million, or 3.34%, effective Monday (July 1). Rates may increase over the period by a maximum of 3%, with any excess amounts recovered the following year. Also as part of the approval, UTC separated utility profits from sales levels. The so-called “decoupling” allows the utility to recover fixed costs regardless of how much gas and electricity it sells.

By 2016 global oil prices will tumble and natural gas use will continue to surge, according to The Kiplinger Letter. As a result of global changes in the oil market, natural gas will increasingly displace oil use in industries across the globe and as an alternative to biofuels as an alternative transportation fuel, including liquefied natural gas truck fleets in China and the United States. The heart of the forecast is a prediction for oil prices dropping to $65-75/bbl and regular gasoline at the pump falling to $3.00/gallon. Kiplinger cited a U.S. drop in oil use of 11% since a peak in 2005 while production has shot up 30% since 2008. This worldwide oil glut will drive down global prices and at the same time drive up demand for natural gas, with prices forecast at about $5.00-6.00/MMBtu over the next few years.

China’s Sinopec Corp. has proposed building a US$3.1 billion ethylene plant in the eastern part of the country that would be the company’s first to use natural gas and liquefied petroleum gas (LPG) as a petrochemical feedstock, Reuters reported. Asian ethylene production typically uses naphtha as a feedstock, putting its plants at a disadvantage to those fed by lower-cost natural gas (see Daily GPI, Aug. 3, 2012). “It will be roughly half natural gas that is going to be imported and half LPG, which will be produced by our refinery,” an unnamed Sinopec official told the news service.

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