NEW YORK—Much was made of how natural gas eclipsed coal as the primary power-generating fuel in the U.S. in the last few years, and again when coal retook primacy more recently.
Politics and economics will continue to complicate that picture, but in the long run midstream operators in North America must be prepared for gas to emerge on top.
“There is clear [government] policy support in the U.S. for coal burning and coal production, but at the end of the day, Henry Hub economics will eventually undermine coal,” said Ira B. Joseph, head of gas and power analytics at S&P Global Platts. He spoke at his company’s annual client conference Oct. 12.
“At the moment the risk to the gas market is to the upside,” Joseph added. “Especially if
Further out things get a little more complicated, Joseph said. There are major LNG export terminals due to come into service in both the
At the same time, a growing market of traders and other non-users, called portfolio players, are entering the global LNG market as volumes increase. As with any commodity market, a bit of arbitrage or speculation helps liquidity and price discovery. Too much can lead to volatility.
Back in
“Every time gas prices fall back, that is detrimental to coal in the long term,” he said, stressing that the situation at present can only be said about the U.S.
“Major policy decisions by China, India, and others on coal mean that the rest of the world is different,” Joseph said.
One reliable export market for
“By the time all the pipelines are built to export to gas to Mexico, we are going to have 15 Bcf/d [billion cubic feet per day] of capacity,” said Joseph. “When we talk to the industrial users in
There is “lots of potential upside for gas in
Recommended Reading
Devon Energy Expands Williston Footprint With $5B Grayson Mill Deal
2024-07-08 - Oklahoma City-based Devon Energy is growing its Williston Basin footprint with a $5 billion cash-and-stock acquisition from Grayson Mill Energy, an EnCap portfolio company.
From Failed Post-Civil War Railroad to Permian Basin Royalties Giant
2024-08-06 - The Texas Pacific Land Corp. has a storied history, setting it up to thrive in Permian royalties, water, easements and more.
OMV Makes Gas Discovery in Norwegian Sea
2024-08-26 - OMV and partners Vår Energi and INPEX Idemitsu discovered gas located around 65 km southwest of the Aasta Hansteen field and 310 km off the Norwegian coast.
Chevron Boosts Oil, NatGas Recovery in Gulf of Mexico
2024-09-03 - Chevron’s Jack/St. Malo and Tahiti facilities have produced 400 MMboe and 500 MMboe, respectively.
The EPC Market Keeps Its Head Above Water
2024-08-06 - While offshore investments are rising, particularly in deepwater fields, challenges persist due to project delays and inflation, according to Westwood analysis.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.