Gas

Mexico will require $20bn investments in power generation through 2026

Wed, 16 May 2012 15:49:00 GMT

The energy minister of Mexico said the country would require $20.1 billion in power generation investments through 2026, according to BNamericas. More than three-quarters of the investments will go toward renewable energy sources, with hydroelectric generation increasing from 36 TWh to 44 TWh.

The generation mix in 2025 is expected to have 55.7 percent of capacity from fossil fuels, down from 80 percent currently. Hydro will make up 18 percent of the total, followed by wind at 6.9 percent and solar at 0.7 percent, the article said.

Survey: U.S. citizens willing to pay more for renewable energy sources

Wed, 16 May 2012 15:03:00 GMT

A new survey finds that Americans are willing to pay more in their electric bills in order to support the switch to renewable energy sources.

The survey was conducted by researchers at Harvard and Yale in 2011 and published in the scientific journal Nature Climate Change. The report says that the average U.S. citizen is willing to pay $162 a year more to support a national policy that requires 80 percent “clean” energy by 2035, representing a 13 percent increase in electric bills nationwide.

However, the support reportedly dropped off when “clean” energy was expanded to include natural gas or nuclear, seemingly because of the disaster at the Fukushima Daiichi nuclear plant in Japan and controversy over natural gas drilling, a process known as hydraulic fracturing, according to The New York Times.

The researchers — Joseph E. Aldy, Matthew J. Kotchen and Anthony A. Leiserowitz — ran a what-if exercise and found the current level of public support insufficient to overcome opposition in Congress, the article said. The researchers found that the annual added cost per household of a clean energy policy would have to drop below $59 a year to pass the current Senate and below $48 a year to pass the current House, or a less than a 5 percent increase in electricity rates on average.

According to the article, the survey suggests lawmakers in many states may find the public willing to bear the burden of higher electric bills if the goals seem achievable.

To read a summary of the survey, click here.

URS completes acquisition of oil and gas products company

Tue, 15 May 2012 14:33:00 GMT

URS Corp. (NYSE: URS) completed its acquisition of Flint Energy Services Ltd. for $1.24 billion.

Under the terms of the definitive agreement announced in February, Flint shareholders received C$25.00 ($24.93) per share in cash for each Flint share. Flint has become the new Oil & Gas division of URS and will be headed by W.J. (Bill) Lingard, Flint’s former president and CEO, as the Division President. The Oil & Gas division will be based in Calgary, Alberta.

Through the acquisition of Flint, URS has added a network of approximately 80 locations in North America that support many of the largest companies operating in the oil, oil sands and gas producing regions of Western Canada and in the Southwest, Appalachian and Rocky Mountain regions of the U.S.

URS and Flint also announced that they have reached an agreement with Transfield Services Limited to continue Flint Transfield Services Limited (FT Services) as a 50-50 operations and maintenance joint venture between Transfield and the URS-owned Flint. FT Services, originally formed in 2006 as a 50-50 jointly owned company between Transfield and Flint, delivers operations and maintenance solutions to the oil and gas and petrochemical sectors in Canada.

5-9 Henry Hub Average Natural Gas Spot Prices

Thu, 10 May 2012 18:52:00 GMT

The Henry Hub is the pricing point for natural gas futures contracts traded on the New York Mercantile Exchange (NYMEX).

The Department of Energy's Energy Information Administration keeps track of the daily changes to the spot prices. Power Engineering figured out the monthly averages and has the figures up to May 9, 2012.

Combined-cycle power plant to use energy storage system

Thu, 10 May 2012 16:10:00 GMT

TAS Energy has been awarded a contract for a energy storage project at a new 1,300 MW combined-cycle natural gas-fired power plant in Virginia. The storage project is a combination of Thermal Energy Storage (TES) and Turbine Inlet Chilling (TIC) systems.

TAS will be providing three of its patented F-70 chiller packages, each rated at 7,900 tons, and a variable-speed pump skid that interfaces with the TES tank, gas turbine filter house coils and the chiller packages for the Warren County Power Station.

The contract was awarded by Warren County Energy Partners (WCEP), a joint venture between Zachry Industrial Inc. and Burns & McDonnell. WCEP was selected by Dominion (NYSE: D) as the engineering, procurement and construction (EPC) contractor for the plant that is expected to be operational in 2014.

TAS Energy will deliver the bulk of the TIC system, including the inlet cooling coils and the coil modules. When placed in combination with a TES tank, the F-70 chiller packages and pump skid will provide inlet chilling for the combined cycle project which will use three Mitsubishi M501G gas turbines and one Mitsubishi TC4F steam turbine.

TAS Energy will be manufacturing the equipment at their facility in Houston, Texas and expects delivery in early 2013.

DOE: Natural gas use at an all-time high

Thu, 10 May 2012 14:50:00 GMT

A report from the U.S. Department of Energy shows the U.S. used a record amount of natural gas-fired generation in February, according to Reuters.

Consumption from natural gas power plants rose 34 percent from last February, as gas prices remain at a 10-year low, pushing many utilities to switch from coal-fired generation in response to new and proposed environmental regulations, according to the article.

Gas-fired power plants used an average of 5 billion cubic feet per day more of natural gas through April 10, 2012 than during the same time period last year, the article said.

Combined-cycle natural gas-fired power plant to use SPX equipment

Thu, 10 May 2012 14:09:00 GMT

SPX Corp. (NYSE: SPW) said that its Thermal Equipment and Services segment has been awarded a contract to supply an air-cooled condenser (ACC) for a new 1.3 GW natural gas-fired, combined-cycle power plant being built by Dominion Virginia Power in Warren County, Va. Dominion Virginia Power is a subsidiary of Dominion (NYSE: D).

The contract was awarded to SPX by Warren County Energy Partners, a joint venture of Burns & McDonnell and Zachry Industrial Inc. SPX’s 60 Module (10x6) SRC A-frame ACC will be installed in the plant in 2013.

The Warren County Power Station is scheduled to be constructed on a 39-acre site in the Warren Industrial Park and will feature three combustion turbines and a steam turbine. It is scheduled to enter operations by December 2014.

Tenaska contemplates abandoning coal for natural gas

Wed, 09 May 2012 16:35:00 GMT

Tenaska has offered to use natural gas instead of coal to power the proposed 716 MW Taylorville Energy Center in central Illinois. The move would reduce construction costs to about $1.1 billion and likely stifle opposition to the plant, according to The Chicago Tribune.

According to the report, a closed-door meeting discussing the possible change of plans was led by Senate President John Cullerton and Rep. John Bradley (D-Marion), who sponsored legislation that would force electricity customers to purchase power from the plant for 30 years.

The new offer has not yet been proposed in writing, according to the report.

Report evaluates EPA's new standard for greenhouse gases

Tue, 08 May 2012 20:34:00 GMT

A new report by Bloomberg Government says that gas-fired generation will likely become the dominant form of power generation over time in light of the U.S. Environmental Protection Agency’s (EPA’s) new standards for greenhouse gases. The report, “The Twilight of Coal-Fired Power?” finds that new coal plants would effectively be banned because their emission rate is almost double that allowed in the proposed standard.

The report also asserts that while the proposed rule makes room to build coal plants that incorporate carbon capture and storage (CCS) technology, coal plants with CCS will likely be too expensive to build unless Congress enacts programs to subsidize the technology. Electricity generated from coal with CCS is almost 50 percent more expensive than energy generated from conventional coal, according to the U.S. Energy Information Administration (EIA).

EPA recently announced that it will hold two public hearings on the proposed carbon standard. The hearings will be May 24, 2012 in Washington D.C. and Chicago. EPA is also extending the comment period on this proposed rule until June 25 to provide for 30 days for the public to comment after the public hearing. The report estimates that based on the timing of these hearings, a final version of the regulation will likely be issued after the November presidential election.

The report goes on to say that based on the compelling economics of natural gas prices, there are few companies seriously considering the construction of new coal-fired power plants in the U.S. In fact, the average U.S. coal-fired power plant is 38 years old, the study finds. Based on an EIA assessment of the cost of coal-fired power, natural gas prices would need to increase to almost $10/mmBtu for a power plant developer to be indifferent to between building with coal or natural gas, the study point out. Therefore, the proposed greenhouse gas standard may not alter the futures of the power generation mix after all.

Alstom ships first GT24 manufactured by Chattanooga workforce

Tue, 08 May 2012 16:54:00 GMT

Alstom has announced the first shipment of a GT24 gas turbine from its manufacturing facility in Chattanooga, Tenn.

The GT24 leaving Chattanooga will sail via barge down the Tennessee River. Alstom’s customer, ACS Cobra, will take possession of the unit in New Orleans for transportation to its final destination – Mexico’s El Sauz CFE combined cycle power plant. In 2011, Alstom was awarded the contract to supply a new GT24 gas turbine to replace three existing gas turbines and retrofit a steam turbine, thus extending the lifetime of the El Sauz plant by 25 years and delivering a 20 percent boost in operational efficiency.

Alstom last year expanded its offering for the North American natural gas electricity generation market with the introduction of its next generation GT24 gas turbine and KA24 combined-cycle power train.

Inaugurated in June of 2010, Alstom’s Chattanooga power systems manufacturing facility provides new and retrofit equipment for nuclear, steam, gas and hydroelectric power plants. The plant represents an investment in excess of $300 million that will create up to 350 jobs at full capacity.

Purdue plans to demolish coal-fired boiler, install CHP plant on campus

Tue, 08 May 2012 14:33:00 GMT

Officials with Purdue University in Indiana on May 7 presented a Comprehensive Energy Master Plan (CEMP), which calls for $33.1 million to be used to demolish an old coal-burning boiler, convert another coal-burning boiler to natural gas, install a natural gas-fired combined heat and power unit, and increase steam distribution along Jischke Drive. The money had originally been slated to build a new clean-coal boiler.

Planned near-term improvements include a 5 million gallon thermal energy storage tank that will allow water to be chilled at night when demand for cooling is low and electricity rates are cheaper. Wade Power Plant's Chiller 6 is scheduled for renovations to extend its service life. Planned upgrades to the pump at the northwest satellite plant will improve distribution at the north end of campus.

As written, mid- and long-term goals include replacing Chiller 6 at the Wade plant, removing Chiller 7 and Boiler 2, building a Boiler 9, adding new chillers at Satellite Plant 2, and building a new chilled water line along Third Street.

The Board of Trustees Physical Facilities Committee requested in 2011 that the university create a comprehensive energy plan to identify and meet the long-term energy needs on the campus. Burns & McDonnell was hired to assist the committee in the plan's development.

Emerson acquires ISE Magtech

Tue, 08 May 2012 14:14:00 GMT

Emerson (NYSE: EMR) announced that it has acquired ISE Magtech. ISE Magtech designs and manufactures level gages and associated equipment for use in industrial applications. This acquisition will allow Emerson Process Management to increase its existing portfolio of level measurement products and provide complete level measurement solutions across the process industry.

Emerson Process Management, an Emerson business, helps businesses automate their production, processing and distribution in the oil and gas, chemical, refining, pulp and paper, power, water and wastewater treatment, mining and metals, food and beverage, pharmaceutical and other industries.

Calpine signs Resource Adequacy contracts with California utilities

Mon, 07 May 2012 14:01:00 GMT

Calpine Corp. (NYSE: CPN) has executed Resource Adequacy contracts (RA contracts) with California’s three investor-owned utilities – Pacific Gas and Electric Co. (NYSE: PCG), Southern California Edison Co. and San Diego Gas and Electric Co. – for the purchase of resource adequacy from the 578 MW Sutter Energy Center for the period from July 1 through December 31, 2012.

The RA contracts will enable Sutter to continue in operation as the California Public Utilities Commission moves forward in developing long-term capacity procurement policies to ensure modern, existing resources remain available to meet California’s future power demands.

The RA contracts are being submitted for approval to the PSC pursuant to Resolution E-4471, in which the commission directed the utilities to enter into contract negotiations with Calpine for the purpose of keeping the Sutter plant online through 2012. The resolution requires the utilities to submit a Tier 2 Advice letter attaching the RA contracts, which filings were made on May 4, 2012.

Sutter began operations in 2001 and is an air cooled, combined-cycle natural gas plant in California.

PMFG wins $4.7mn emissions control contracts

Mon, 07 May 2012 13:28:00 GMT

PMFG Inc. (NASDAQ: PMFG) has announced that it has been awarded a contract to provide two SCR systems for nitrogen oxide (NO_x) emissions control and oxidation catalysts for carbon monoxide/volatile organic compounds emissions control for a new, natural-gas-fired combined-cycle power plant in the northeastern U.S. The project has a delivery schedule for the equipment that extends from the third quarter of fiscal year 2013 through the second quarter of fiscal year 2014.

The company has also announced a contract for a Selective Catalytic Reduction system for a fractionation facility in the U.S. that will produce 100,000 barrels per day of natural gas liquids. Together, these two contracts total more than $4.7 million.

PMFG is a provider of emissions control products for power generation, natural gas infrastructure and petrochemical processing headquartered in Dallas.

Update: EPA releases draft program for hydraulic fracturing groundwater treatment

Fri, 04 May 2012 20:32:00 GMT

The U.S. Environmental Protection Agency (EPA) has released a draft underground injection control (UIC) program permitting guidance for class II wells. The guidance affects the groundwater treatment of gas developments in which hydraulic fracturing, also known as fracking, is used.

Development of shale gas plays through hydraulic fracturing has been one of the main factors contributing to the dip in natural gas prices. Many electric utilities, which are in the midst of the largest retirement phase in the U.S. power industry’s history, have been influenced by these low prices to switch their plants to natural gas or combined-cycle natural gas.

EPA developed the draft guidance to clarify how companies can comply with a law passed by Congress in 2005, which exempted hydraulic fracturing operations from the requirement to obtain a UIC permit, except in cases where diesel fuel is used as a fracturing fluid. In EPA’s Prepublication of the Federal Register notice, the Agency communicates that this guidance will affect approximately 2 percent of wells that hydraulically fracture.

The draft guidance outlines for EPA permit writers, where EPA is the permitting authority, requirements for diesel fuels used for hydraulic fracturing wells, technical recommendations for permitting those wells, and a description of diesel fuels for EPA underground injection control permitting. The draft guidance describes diesel fuels for these purposes by reference to six chemical abstract services registry numbers. The agency is requesting input on this description.

While this guidance undergoes public notice and comment, decisions about permitting hydraulic fracturing operations that use diesel fuels will be made on a case-by-case basis, according to the EPA.

“The implication is that since 2005, if a company used diesel and didn’t get a permit, that was illegal,” said Richard Stoll, a partner with Foley & Lardner. However, virtually no oil and gas companies are currently using diesel in their fracking processes, Stoll said.

Deborah Jennings, chair of DLA Piper’s Environmental group, said that the oil and gas industry needs to continue to comply with EPA regulations in order to increase trust from the power industry and others. “Reasonable regulation is the right thing to do, and this is not going to adversely affect the oil and gas industry or the power industry.”

Stoll said that while this guidance and a proposed air emissions standard for hydraulic fracturing may cause an increase in the cost of gas over time, the rules are not expected to affect the power industry as much as EPA’s rules target at coal-fired power generation will. “I don’t really see this making a big difference for power generation in the long run.”

Many in the oil and gas industry are already complying with guidelines expected to be imposed as a result of this program and the air emissions standard. “Those of us in the industry who have upheld high standards and maintained clean track records will collectively breathe a sigh of relief today, as after 40 years of fracking in the US, there is now an industry standard,” Chris Faulkner, CEO of Breitling Oil & Gas.

EPA will take public comment on the draft guidance for 60 days upon publication in the Federal Register to allow for stakeholder input before it is finalized.

Click here for more information on the program.

Interior proposes rule for chemical disclosure of hydraulic fracturing operations

Fri, 04 May 2012 18:34:00 GMT

Secretary of the Interior Ken Salazar has announced the release of a proposed rule to require companies to publicly disclose the chemicals used in hydraulic fracturing operations on public and Indian lands, with appropriate protections for proprietary information.

Currently, there is no specific requirement for operators to disclose these chemicals on federal and Indian lands, where approximately 90 percent of the wells drilled use hydraulic fracturing to greatly increase the volume of oil and gas available for production. The proposed rule would require public disclosure of chemicals used during hydraulic fracturing after fracturing operations have been completed.

Current BLM regulations governing hydraulic fracturing operations on public lands are more than 30 years old and were not written to address modern hydraulic fracturing activities.

Once the proposed rule is published in the Federal Register, a 60-day public comment period will begin, during which the public, governments, industry and other stakeholders are encouraged to provide their input.

The draft rule can be viewed here along with economic analysis and an appendix.

5-2 Henry Hub Average Natural Gas Spot Prices

Thu, 03 May 2012 19:29:00 GMT

The Henry Hub is the pricing point for natural gas futures contracts traded on the New York Mercantile Exchange (NYMEX).

Battery storage system integrated into thermal power plant in Chile

Thu, 03 May 2012 18:31:00 GMT

AES Gener and AES Energy Storage announced the commercial operation of the second energy storage project in Northern Chile, integrating 20 MW of advanced battery-based energy storage with a 544 MW thermal power plant. Both companies are subsidiaries of AES Corp (NYSE: AES).

The project is owned by AES Gener and will operate through its subsidiary, Empresa Electrica Angamos S.A. (Angamos).

The advanced reserve capacity provided by the storage technology will enable the Angamos plant to generate an additional 20 MW of energy at virtually all times throughout the year. As a result, this newly available energy will increase power generation from the Angamos plant by 4 percent.

The storage system was designed, built and operational in 15 months. It is comprised of approximately one million advanced lithium-ion battery cells divided between ten, 2 MW battery containers and five, 4 MW power controls containers. A123 Systems (NASDAQ: AONE) supplied the energy storage systems for the project, and the power controls modules were provided by ABB (NYSE: ABB).

AES Energy Storage worked with AES Gener throughout the design, development, and installation of the Angamos BESS. AES Energy Storage worked with CDEC-SING, AES Gener and its partners to configure the parameters of the advanced reserves product enabling the Angamos BESS to meet the performance requirements of the electrical system operator and respond autonomously within established parameters. The advanced reserves product also features system monitoring, SCADA and integration with other operational systems.

GE to deliver cogeneration gas sets to CHP plant in Wisconsin

Thu, 03 May 2012 16:35:00 GMT

GE’s (NYSE: GE) Waukesha gas engines factory manufactured and recently delivered two, 1 MW cogeneration sets for the Forest County Potawatomi Community’s (FCPC) planned biogas combined heat and power (CHP) project in Milwaukee’s Menomonee Valley. The biogas project will convert waste from area food processing operations into renewable energy for the tribal community as well as the local grid.

GE delivered the two Waukesha APG1000 Enginator biogas engines to FCPC on April 13. An anaerobic digester will process the food processor waste to produce biogas that will fuel GE’s Waukesha engines in the CHP plant. The engines are designed specifically to run on biogases that are rich in methane.

The two generator sets will produce a total of 2 MW of renewable electricity. The biogas plant’s electricity will be sold to WE Energies. The Potawatomi Tribe expects the CHP plant to begin operations in April 2013.

Kentucky regulators OK new natural gas-fired power plant

Thu, 03 May 2012 16:17:00 GMT

The Kentucky Public Service Commission (PSC) approved a proposal by Kentucky Utilities Co. (KU) and Louisville Gas & Electric Co. (LG&E) to build a 640 MW natural gas-fired power plant at LG&E’s Cane Run plant and to purchase the 495 MW Bluegrass natural gas-fired plant in Oldham County. The Bluegrass plant will be used as a peaking plant.

In their application, KU and LG&E said that the additional generating capacity is needed to replace coal-fired units at Cane Run and at KU’s Green River and Tyrone plants and to meet projected increases in demand for electricity by 2016. Those facilities are being retired by the end of 2015 as part of a broader plan to comply with new and stricter federal air quality regulations. Construction of the new plant at Cane Run will cost about $583 million, the companies said in their application, which includes a new natural gas pipeline to the site. The purchase price of the Bluegrass Generation plant is $110 million.

Both LG&E and KU are subsidiaries of PPL Corp (NYSE: PPL). Based on the need for replacement power, a majority of the cost and ownership of the new Cane Run plant would be allocated to KU. Most of the Bluegrass plant would be allocated to LG&E.