Electricity, Natural Gas

Coal-to-gas switching seen rising

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Input substitution starts to take effect. What legislation could not do efficiently the marketplace does.

Coal-to-gas switching seen rising in West, Texas and Louisiana: Barclays
Houston (Platts)
Low natural gas prices will “for the first time” lead generators in Texas, Louisiana and the western US to begin switching from coal, Barclays Capital analysts are predicting.

While power generators in the Southeast, Northeast and parts of the Central Industrial region have been moving for some time to gas from coal because of the attractive economics, those in the other regions have been slower to make the change.

Michael Zenker, who co-wrote the report “Digging into the Coal Pile,” with market analyst Shiyang Wang, said in an email Wednesday that while the bulk of coal-to-gas switching continues to found be in the Southeast, …

Natural Gas

One Natural Gas Driller Listens to Market Signal

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The relatively low natural gas price sends a signal to at least one driller to cut back on the supply. If others join this move the market prices could increase and affect electricity pricing.

Analysts back Cabot plan to cut natural gas drilling by $100 million
Houston (Platts)
Energy industry analysts Wednesday applauded a decision by Appalachian producer Cabot Oil and Gas to reduce by $100 million its projected 2012 capital spending for natural gas drilling, primarily in the Marcellus Shale play.

In a conference call Tuesday announcing the company’s fourth-quarter and full-year 2011 results, officials said that the producer would lower its 2012 capital expenditures 15% to 20% in response to the low commodity price environment for natural gas.

As a result, the producer also reduced its production growth estimate for the year to 35% to 50%, down from a previous 45% to 55%. …