Offsetting

TransCanada Corp. has lost the second round of its years-long contest with natural gas shippers over proposed restructuring of finances and services for its shaky Mainline from Alberta to Ontario, Quebec and export routes to the Midwest and eastern United States.

Natural gas prices for electric generation in California last year decreased 30%, but overall wholesale power prices decreased only 2% for the year because of offsetting lower hydro-electric supplies, increased congestion and the loss of 2,000 MW of nuclear generation for the year, according to an annual market report released Monday by the state grid operator.

Cash market prices on average fell 4 cents Tuesday as a handful of points showing gains of a few pennies had no chance of offsetting a broad and pervasive decline.

TransCanada Corp. has been ordered to cut tolls on its troubled natural gas Mainline for long delivery contracts but granted offsetting rights to charge as much as markets for transportation services will bear for short capacity bookings.

TransCanada Corp. has been ordered to cut tolls on its troubled natural gas Mainline for long delivery contracts but granted offsetting rights to charge as much as markets for transportation services will bear for short capacity bookings.

The United States will become the top producer of oil globally within five years, a net exporter of natural gas by 2020 and an oil exporter by close to 2030, all thanks to its massive unconventional resources, the International Energy Agency (IEA) said Monday in its annual flagship publication, the World Energy Outlook (WEO).

Cash market natural gas prices were mostly flat Tuesday with strength at a few Northeast locations offsetting softer California and Texas markets. California consumers were the beneficiaries of the return to service of a major pipeline from the Rockies, and weather forecasts for Wednesday called for 60s in the Northeast and Midwest, and 80s in the South and West. At the close of futures trading the June contract had risen 6.9 cents to $2.500 and July had added 6.3 cents to $2.568. June crude oil slipped 80 cents to $93.98/bbl.

The Eagle Ford Shale will drive a 15% increase in onshore gas production from the Texas Gulf Coast by November, offsetting declines elsewhere in Texas, according to Bentek Energy LLC. The firm said it expects Texas to be “increasingly long gas in the near term as Eagle Ford production growth continues to outpace demand,” putting downward pressure on regional prices. According to Bentek’s Texas Observer, the state’s supply is up by 1 Bcf/d, or 5%, from a year ago, with the increase driven by growth in onshore production. Demand is up only 0.6 Bcf/d over the same period, according to Bentek. “Due to the combination of Marcellus [Shale] pushback and milder winter weather, net Texas outflows have declined nearly 0.4 Bcf/d since this time last year. As a result, Texas is currently 0.8 Bcf/d longer supply than year-to-date 2011,” Bentek said.

Continued growth in production of shale gas and recent discoveries in deep waters offshore is expected to increase domestic natural gas production through 2035 and will be reflected in the Energy Information Administration’s (EIA) next Annual Energy Outlook, which is due out in December, according to EIA Administrator Richard Newell.