Switch

Despite persistent surpluses, soft prices and an industry-wide switch of drilling targets to liquids, construction is beginning on the first large Alberta natural gas processing plant in recent industry or regulatory memory.

Calpine Corp. has confirmed that it plans to develop a 309 megawatt natural gas-fired generation plant in Delaware and continue its efforts to switch from coal to gas in the portfolio it obtained when it acquired Conectiv Energy’s generation fleet from Pepco Holdings Inc. in a $1.3 billion deal two years ago (see Daily GPI, Aug. 2, 2010). Calpine said the completion of the Garrison Energy Center in Dover, DE, depends upon “continued successful development milestones,” but Calpine is “committed to proceed with full-scale development efforts.” Calpine CEO Jack Fusco said Calpine voluntarily eliminated the coal-fired plants among the 19 facilities it purchased from Pepco, and the Garrison plant development is the next step in that commitment.

Without counting the ongoing switch to alternative transportation fuels such as natural gas, nearly 80% of current oil consumption used for transportation worldwide could be eliminated in the next 40 years through aggressive fuel efficiency programs, according to two reports released in Paris by the International Energy Agency (IEA), an autonomous nonprofit organization. The IEA reports conclude that the “right policies and technologies” could improve vehicular fuel efficiency by 50% by the middle of the century. According to the IEA, the transportation sector accounts for 20% of world energy consumption and increased demand in the sector is expected to comprise all future growth in oil use globally. However, the reports contend that there is “massive potential” for fuel efficiency improvements to reduce transport fuel demand. One report, “Technology Roadmap: Fuel Economy for Road Vehicles,” outlines technologies to make vehicles much more efficient by 2030, and the second, “Policy Pathway: Improving the Fuel Economy of Road Vehicles,” outlines policy changes in fuel economy labeling, standards and fiscal policies.

Coal-to-natural gas switching became a live issue for Wisconsin Energy’s major utility, We Energies, with the decision Friday to switch a long-time coal-fired cogeneration facility serving downtown Milwaukee to natural gas. The Valley Power Plant is a 280 MW facility providing steam and electricity.

Another hot summer, combined with a continued move by power generators to switch to natural gas, has reduced the big storage overhang and should send natural gas prices higher, according to Goldman Sachs.

Higher natural gas prices, even three or four times above current low levels, won’t harm the switch of fleets to compressed natural gas (CNG) and liquefied natural Gas (LNG) for transportation, according to a supplier of natural gas for transportation.

California continues to deal with vocal dissenters opposing the widespread switch among energy utility customers — gas and electric — to advanced metering systems. While a growing number of small suburbs in the San Francisco Bay area are trying to make themselves smart meter-free zones, objective studies have verified the safety of the meters, which depend on radio frequency-emitting devices similar to — but less powerful than — cell phones. The Los Angeles Times on Sunday editorialized in favor of the new meters, noting particularly that on the electric side that they “have the potential to change the delivery of electricity as profoundly as the Internet changed the delivery of information.” Utilities save money by eliminating the decentralized house-by-house meter reading function and customers can save by being able to take advantage of time-of-use pricing and smart appliances. With at least four Northern California towns passing moratoriums against the meters, the Times said Pacific Gas and Electric Co. has “rightly ignored the nonsensical bans,” noting that it is regulated by the state, not local governments.

Cold snaps, an accelerating switch in drilling targets to chase high oil prices and strong demand by Alberta thermal bitumen extraction projects are deflating Canada’s share in the North American natural gas surplus.

Cold snaps, an accelerating switch in drilling targets to chase high oil prices and strong demand by Alberta thermal bitumen extraction projects are deflating Canada’s share in the North American natural gas surplus.