Increases

A comeback for coal in the power generation space could come next year on the expected rise in demand for electricity and corresponding increases in natural gas prices to more normal levels, according to global coal mining equipment supplier Joy Global Inc.

Lower prices for oil and natural gas liquids have led to softening in drilling services markets and caused Pioneer Drilling Co. to dial down its operations guidance for the second quarter, the company said Monday. However, the Permian Basin of West Texas and the Bakken Shale offer some bright spots.

The cash market overall gained on average about 3 cents Wednesday with Northeast points reporting stout gains, and increases at Midwest locations not far behind. The approval of a major pipeline project anticipated to expand deliveries into New York City by 4Q2013 ripped through the basis market and differentials narrowed considerably. Futures advanced and by the close June had advanced 3.0 cents to $2.737 and July had gained 2.0 cents to $2.796. July crude oil plunged below $90 and settled at $89.90, down $1.95/bbl.

The Washington Utilities and Transportation Commission (UTC) on Monday approved retail natural gas and electricity rate increases for Bellevue, WA-based Puget Sound Energy (PSE), effective May 14 — 1.3%, or $13.4 million annually, for gas customers and 3.2%, or $63.3 million, for power users. PSE originally asked for $32 million and $161 million, for gas and electricity, respectively, when it filed with the UTC last June. The gas increase will cause retail residential bills to increase a little more than a dollar/month, increasing to an average monthly bill of $86; the electric increase will push monthly residential bills up $3.30 to $102.56/month. Among the major reasons for the wide difference between what PSE asked for and what the UTC granted for power rates was the steep decline in natural gas prices during the past 11 months, a UTC spokesperson said. As part of the general rate case decision, the UTC lowered PSE’s returns on equity (10.1% to 9.8%) and overall rate of return (8.1% to 7.8%).

Talisman Energy Inc. is slashing dry gas spending again in response to chronically low prices, but the company continues to ramp up production from the liquids-rich shale plays in its portfolio.

Some of Halliburton Co.’s pressure pumping deliveries in North America originally planned for this year will be deferred to 2013 to deal with “inefficiencies” that followed onshore producers moving from dry natural gas plays to more liquids-rich regions, company executives said Wednesday.

Small pipeline projects intended to achieve big increases in Canadian imports of shale gas from the United States were launched last Tuesday in Ontario by Union Gas Ltd. and Enbridge Gas Distribution Inc.

Small pipeline projects intended to achieve big increases in Canadian imports of shale gas from the United States were launched Tuesday in Ontario by Union Gas Ltd. and Enbridge Gas Distribution Inc.

Natural gas and oil drilling in Ohio could create 65,000 jobs and add nearly $5 billion to state coffers by 2014, according to an academic study.