Sign

As another sign that the railroad sector is a growing potential transportation market for natural gas, Canadian National Railway (CN) has ordered four liquefied natural gas (LNG) tenders from Vancouver, BC-based Westport Innovations Inc., the first of which are to be delivered later this year. A tender is a car behind the locomotive that carries the fuel.

Natural gas prices in the various North American shale basins rose about 50 cents, or close to 20%, year-to-year from Jan. 1, 2012 to Jan. 1, 2013, moving mainly from the $2.80s to the $3.30s per MMBtu. At the same time, operating rigs in the same basins dropped 21%, according to surveys conducted throughout the year for NGI’s Shale Daily.

As a further sign the state is sticking with natural gas-fired electric generation, the California Public Utilities Commission (CPUC) last Thursday overcame a mounting chorus of naysayers and gave the go-ahead (again) to a power plant that has been in the development phase for more than a decade in Northern California.

As another sign that the vision of a “natural gas highway” for long-haul trucks and other heavy-duty vehicles is taking shape, Southern California-based Applied Natural Gas Fuels Inc. said it plans to double the output capability of its Topock, AZ, liquefied natural gas (LNG) production facility.

She was blamed by many for breaking up The Beatles, and what John Lennon’s widow Yoko Ono and his son Sean Lennon are trying to do to hydraulic fracturing (fracking) won’t endear her to oil and gas producers either.

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.

In a sign of coal’s weakening dominance in the power sector, Patriot Coal Corp. and nearly 100 of its affiliates on Monday filed for Chapter 11 protection in U.S. Bankruptcy Court in New York City.

Chesapeake Energy Corp. and the City of Salem, OH, have agreed to sign a three-year nondevelopmental lease, with an option for an additional three years, for 381 combined acres of land owned by the city. Chesapeake agreed to pay a signing bonus of $3,500/acre, plus 20% royalties on gross revenue on any production.

Colorado Gov. John Hickenlooper is expected to sign a new bill (HB12-1315) that was passed Wednesday by the state Senate to create a renamed and refocused governor’s energy unit. The Colorado Office of Energy Development would emphasize both traditional and renewable energy resources.