Constraints

Eight members of Congress have told President Obama that the United States’ national security interests are dependent on natural gas, and urged the president to support efforts to expand exploration, development and production, especially through hydraulic fracturing (fracking).

With a force majeure declared Sunday and associated constraints remaining in effect until further notice at Steele City Compressor Station (see Daily GPI, June 7), Rockies Express (REX) said it has determined that replacing the entire power turbine in lieu of only the damaged section is the most expeditious means of returning Unit #2 to service. Completion of assembling a new turbine is expected this coming Sunday, REX said. The turbine is expected to arrive on site Tuesday, and barring any unforeseen circumstances in shipping, installation and commissioning, the resumption of service at Steele City is now estimated to occur on or about Wednesday, REX said.

A Duke University study released last week found high levels of leaked methane in well water collected near shale gas drilling and hydraulic fracturing (fracking) sites in the Marcellus Shale play. However, Duke researchers said there was no evidence that fracking fluids contaminated the water wells.

More than one-third of the global increase in natural gas production by 2035 will come from unconventional shale gas, coalbed methane and tight gas, according to the World Energy Outlook 2010 (WEO-2010), which was issued by the International Energy Agency (IEA) on Tuesday.

Companies that missed out on the first round of leasing in the Eagle Ford Shale in South Texas that began in 2008 will have another chance as some of those leases will be expiring in the coming months, an industry analyst said recently.

Tennessee initiated storage constraints Saturday that included no injections or transfers into interruptible accounts. See the bulletin board for other restrictions that will remain in effect until further notice.

Depressed wholesale natural gas and power prices, along with the prospects for curbing emissions to meet anticipated future carbon constraints, combined to drive down earnings in the fourth quarter for Edison International’s independent energy unit, Edison Mission Group (EMG), the parent company reported Monday as part of a conference call on its year-end 2008 earnings, which were up 4% over the previous year. Prospects for EMG this year are not much better, according to Edison CEO Ted Craver, speaking to analysts.

Both Southern California Gas and Pacific Gas & Electric allowed two-day-old high-linepack OFOs to expire Saturday.

FERC last Thuursday approved Equitrans LP’s request to place in service its Big Sandy Pipeline, which was built to ease the capacity constraints that have plagued producers in the eastern part of Kentucky over the years.