Cheap

Cheap natural gas, courtesy of shale plays, is bringing industry back to the United States, growing economies along the Gulf Coast, in the Northeast and elsewhere. But it has also made holding gas transportation capacity a more dicey prospect for end-users, and there is a risk that some of the energy industry’s risk management muscle could atrophy while on a diet of low prices and low volatility.

Got ethane? Not to worry; someone will want it — now and in the future — according to analysts at Raymond James & Associates Inc. While the firm expects ethane prices to remain depressed through 1H2012, a rebound is coming in the second half of the year, and longer term the outlook is bullish for ethane demand.

Without the alternative of plentiful and cheap natural gas supplies and facing ever-higher petroleum prices, Berlin, Germany, the capital and city-state that serves as an icon for a nation still adjusting to reunification, has set a decidedly high goal for making itself Europe’s clean transportation capital. With the byproducts of natural gas being less viable here, Berlin envisions an electrified transportation system.

Looking ahead over the next decade the natural gas industry can be characterized as having excess supplies of the commodity and infrastructure that will be searching frantically for added demand, an industry strategist told the LDC Gas Forum: Rockies & West meeting in Los Angeles Tuesday.

Government officials, environmentalists and industry representatives carried the debate on hydraulic fracturing (fracking) to California’s south-central coast last Thursday in Santa Barbara County, and while there was no across-the-board agreement, local elected officials did voice surprise that fracking is a potential issue in their county where offshore oil/gas development has had a long-standing love-hate relationship with residents.

Faced with pricing uncertainty, anticipated decrease in U.S. demand and a shifting regulatory landscape, Canadian gas companies will need to look beyond the United States if they are to retain market share and remain competitive, according to Ernst & Young.

The persistently sharp contrast between expensive oil and cheap gas has had dramatic effects on Western Canadian drilling, boosting activity and accelerating a trend to targeting oil rather than gas.

Cheap ethane provided by liquids-rich natural gas production in the United States has prompted Dow Chemical Co. to boost its ethane cracking capabilities on the Gulf Coast over the next two-three years. The company’s cracking capacity will grow by 20-30% during the period, Dow said Thursday.

Utah and PacifiCorp’s Rocky Mountain Power utility struggle with climate change pressures that bump up against the state’s cheap source of electricity from abundant coal-fired generation. The utility thinks there is room to accommodate both, and state officials have not proposed new restrictions on existing generators.