Another sign of the shifting world energy market caused by the shale gas revolution is a $7 billion contract announced this week that directs the export of coal — no longer needed in the United States — to India from Kentucky and West Virginia. The 25-year agreement was lauded by Kentucky Gov. Steve Beshear, who called it “an example of a great new market for Kentucky resources.” Kentucky coal companies will export about 9 million tons of coal per year to India’s Abhijeet Group. The coal is being purchased from Kentucky-based affiliates of FJS Energy LLC. A supply glut of natural gas, much of it from shale, has driven gas prices lower than coal this year and intensified the environmental push toward coal-to-gas fuel switching for power generation (see Daily GPI, Aug. 16; Aug. 6). The 25-year contract is an indication that coal producers see stiff competition from natural gas continuing for their product in the United States.
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Joseph Martens, who directs the New York Department of Environmental Conservation (DEC), is scheduled to answer questions from the public from 9-10 a.m. EDT on Saturday about natural gas drilling and high-volume hydraulic fracturing on CitizensConnect, a website created by Gov. Andrew Cuomo to promote communication with his administration. DEC spokeswoman Emily DeSantis said all questions to Martens would be welcomed. “This is an important issue with great public interest. Commissioner Martens is happy to engage with the public about it.” Questions may be submitted online before Saturday.
‘Triple A’ Argument for Gas Demand Growth, Says Shell Exec
Natural gas is well on its way to supplying 20% of global energy demand by 2020, a Royal Dutch Shell plc executive said Monday.
IHS CERA: Upstream Costs Fall, but Further Plunge Expected
The costs to build and operate upstream facilities have plunged over the past six months, but they still have further to fall, according to IHS Cambridge Energy Research Associates (IHS CERA).
Transportation Notes
TGT issued an OFO that took effect Saturday and directs no-notice and storage customers “to comply with the 68% minimum seasonal storage withdrawal obligations in their service agreements.” The OFO will remain in place until April 1, TGT said. See the bulletin board for further details.
Senate Votes to Keep Inventory of OCS Oil, Gas Resources in Broad Energy Bill
The Senate on Tuesday drove back an attempt by coastal state senators to purge a provision from the omnibus energy bill (HR 6) that directs the federal government to carry out an inventory of the oil and natural gas resources on the Outer Continental Shelf (OCS).
Wood Directs FERC Staff to Review Explosive Enron Tapes
Calling Enron Corp. a “sad chapter in energy history,” FERC Chairman Pat Wood on Thursday directed staff attorneys to immediately review the explosive new audiotapes and other documents related to Enron’s activities during the 2000-2001 energy crisis, as well as all Enron proceedings pending before the Commission, to determine what further steps the agency may need to take in pending cases.
FERC Backs New England RTO Plan, Directs More Work on Seams Elimination
FERC last Wednesday conditionally approved a proposal filed by ISO New England (ISO-NE) and New England transmission companies late last year to form a regional transmission organization (RTO). Among other things, the Commission directed ISO-NE and the transmission owners to conduct additional work on plans to eliminate interregional electric seams with bordering regions.
FERC Lays Down the Gauntlet, Directs AEP to Fully Integrate with PJM
Setting up a possible showdown with states over how and when electric utilities should join regional transmission organizations (RTOs), FERC late Tuesday said that American Electric Power Co. (AEP) must “expeditiously fulfill” prior voluntary commitments and hand over control of its transmission facilities to PJM Interconnection. Significantly, the Commission also said that after considering various alternatives, AEP’s full integration into PJM is the best solution among the options before the federal agency.
FERC Stands By Cal-ISO Third-Party Payment Decision
FERC is refusing to budge from a recent order that directs the California Independent System Operator (Cal-ISO) to assure payment for all third-party energy sales made to the state transmission coordinator.