Rapid Power Management

Rapid Power Management is dedicated to educating our clients not only about the services we provide, but on any issues that may affect the energy market.

Category: Energy Buzz

Natural Gas Gluttony Causing one Major Producer to Reduce Drilling Operations

Chesapeake Energy Corporation (NYSE: CHK), the second largest producer of natural gas in the United States, is making vast changes in order to protect their shareholders. Natural gas prices have hit a ten year low causing Chesapeake to decrease drilling in the Barnett, Haynesville and Marcellus Shale Plays. The company is immediately curtailing gross gas production by up to .5 billion cubic feet (Bcf) per day. If prices remain low, the company is willing to increase the curtailment to 1 Bcf a day.

An abundance of shale gas plays (see above image) has led to a surplus in natural gas inventories. Coupled with the mild winter the US has seen, natural gas prices steadily declined. After Chesapeake’s announcement, the market closed up $0.182 to $2.525. Pundits still feel that to have a real impact, other producers such as Exxon, EnCana and Devon Energy will have to follow suit.

Please visit http://rapidpower.net/rpm-market-news to see a real time update on 12, 24 and 36 month natural gas futures prices.

EPA’s CSAPR Delayed

The EPA Cross State Air Pollution Rule finalized in July 2011 has been delayed pending further review. The US District Court of Appeals granted a request from several power generators who stated the January 1, 2012 implementation date was too soon.

The Federal Electric Regulatory Council (FERC) is also concerned with the impact that the rule would have in places like Texas and the New England States where demand is high.

The court is asking that oral arguments regarding this matter take place by April 2012.

As RPM clients, we will continue to keep you informed on this critical piece of legislation.

 

Previous Articles Regarding the CSAPR:

Enforcement of the Cross State Air Pollution Rule Nears

EPA’s Clean Air Act Amendment could cause energy prices to rise as early as 2012 

ERCOT News Release

ERCOT has released both the winter 2011/2012 assessment as well as their biannual assessment for the next 10 years. Risk is very low, according to CEO Trip Doggett, that peak demand will exceed the available resources this winter season. ERCOT will continue to monitor the situation. Beginning summer 2012 it may be a different story. Power reserves — the extra capacity used to avoid rotating outages — will likely fall below the minimim target as they have decreased by five percent.  This means we can expect emergency procedures and potential outages.

Click to read more on the Winter 2011/2012 Assessment.

Solar Power: Time to Shine?

Renewable energy sources such as Solar power have become an increasingly popular energy resource over the years thanks to decreasing prices and increased awareness via reduced production costs, green energy advocates, government incentives and panel manufacturers’ marketing efforts.

Although solar power is still approximately three times more expensive than electricity produced by natural gas, prices have fallen by two thirds since 2008. To further solar power’s affordability, federal and state governments are offering tax breaks and subsidies.

The federal government offers a tax credit of 30 percent for the gross cost of solar panel installation for residents and businesses. On top of the tax credit, each state offers its own incentives for all forms of renewable energy, including solar.

The Department of Energy (DOE) rolled out the SunShot Initiative in 2007 to decrease solar energy system costs by 75% before 2020. When this goal is reached, systems will even be affordable without any rebates or tax cuts. The main goal has been to drive innovative technology.

Under the initiative, the DOE began backing the company 1366 Technologies this October with a $150-million loan. 1366 believes their new manufacturing process will significantly cut costs, making prices competitive with that of coal.

New thin-film photovoltaic cell technologies are also bringing down the costs and large companies like GE are beginning to manufacture the panels. In October GE announced plans to build the largest thin-film panel factory in the United States.

These initiatives are not only bringing down costs, they are creating jobs and with their implementation, protecting the environment.

Solar’s portion of the power business remains small but has great potential to flourish. According to the U.S. Energy Information Administration (EIA), solar power is capable of providing many times the total current energy demand.


U.S. Department of Energy (DOE) SunShot Initiative; http://www1.eere.energy.gov/solar/sunshot/

Information on state, local, utility and federal incentives and policies that promote renewable energy and energy efficiency: http://www.dsireusa.org/

Dallas Business Journal Interviews JD

Matt Joyce of the Dallas Business Journal interviewed one of RPM’s business partners, JD, at the TEPA conference. They spoke about the EPA’s “Cross State Air Pollution Rule” and the impact it could have on the electricity market in Texas. The article also highlights  challenges ERCOT may face to meet demand in the future.

Check out the article here.

EPA Partnership Opportunity

Team up with the Environmental Protection Agency by purchasing your electricity from retailers who provide clean, renewable resources such as wind or solar power. This Green Power Partnership will promote green power in order to reduce harmful environmental impacts. The minimum requirements to become a partner are as follows:

As a partner, your business name and ‘snapshot’ will be added to the EPA’s partner list on their website. In return, the EPA gives your company permission to use the Partner Mark logo on its site. Please note that this program is completely voluntary and does require an application and yearly profile update.

If “going green” is important to your company, this is a great way to promote it.  Through this program businesses receive expert advice, recognition and market updates.

Enforcement of the Cross State Air Pollution Rule Nears

The Cross State Air Pollution Rule (CSAPR) is approximately 3 months away from being enforced in 27 states. To meet the terms of this ruling, power companies are being forced to significantly reduce their sulfur dioxide and nitrogen oxide emissions by January 1, 2012 or shut down.

Finalized this July, CSPAR will mainly affect power producers who rely on coal to generate electricity. Those regions with heavy coal-based generation may see power prices raise as many plants are obligated to retrofit with new technology or shut down.
Projected decrease in emissions beginning this January

The EPA states, “This rule will not disrupt a reliable flow of affordable electricity for American consumers and businesses.” Additionally, the EPA explains that any increase in costs will be outweighed by the benefits of the ruling. (For more information on the EPA’s stance on the rule, please visit: http://www.epa.gov/crossstaterule/)

Several states, including Florida, Nebraska, Oklahoma and Kansas, beg to differ and have challenged the EPA over its decision. Attorney General Greg Abbot in Texas explained that the EPA is ignoring the increased potential for power outage risks and unemployment for coal miners and power plant employees.

RPM will continue monitoring any changes in the ruling.

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