01192018Fri
Last updateFri, 19 Jan 2018 7pm

i

EIA Predicts Record U.S. Fossil Fuel Production

In its January 2018 Short-Term Energy Outlook, the U.S. Energy Information Administration (EIA) forecasts that total fossil fuels production in the U.S. will average almost 73 quadrillion British thermal units (Btu) in 2018, the highest level of production on record. EIA expects total fossil fuel production to then set another record in 2019, with production forecast to rise to 75 quadrillion Btu.

Record production levels are largely attributable to increased production of natural gas and crude oil enabled by the use of hydraulic fracturing techniques in tight rock formations. EIA expects increases in natural gas production to be the leading contributor to overall fossil fuels production growth in 2018 and increases in crude oil production growth to the be leading contributor in 2019. In both years, expected growth in natural gas, crude oil, and HGL production more than offset expected declines in coal production. 


TransCanada Proceeding with Keystone XL Pipeline

TransCanada Corp. has successfully concluded the Keystone XL open season, securing approximately 500,000 barrels per day of 20-year commitments, positioning the proposed project to proceed. Interest in the project remains strong and TransCanada will look to continue to secure additional long-term contracted volumes.

TransCanada is continuing outreach in the communities where the pipeline will be constructed and is working collaboratively with landowners in an open and transparent way to obtain the necessary easements for the approved route. Construction preparation has commenced and will increase as the permitting process advances throughout 2018, with primary construction expected to begin in 2019. 

Natural Gas Prices, Production, Exports Increased in 2017

Overall, natural gas prices at key regional trading hubs were less volatile in 2017 than in previous years, as pipelines that came online throughout the year eased some infrastructure constraints that affect regional prices, according to the U.S. Energy Information Administration. In the Northeast, which tends to have large price spikes during periods of cold weather, new pipeline capacity, along with warmer winter weather, helped to moderate price volatility. However, record cold temperatures at the end of December in the eastern U.S. led to record high demand for natural gas and significant price spikes at many trading locations.

Additional takeaway capacity in the Appalachian region, the region with the largest U.S. natural gas production growth in 2017, continued to narrow price differences between Henry Hub and nearby trading hubs such as Dominion South in western Pennsylvania, Transco Zone 6 NY in New York City, and Algonquin Citygate near Boston. 

Pipeline Capacity Expansions Accelerating in U.S. Northeast

With projects such as Columbia Gas Transmission’s Leach Xpress and Energy Transfer Partners’ Rover pipeline, “[t]he U.S. northeast should realize an increase of more than 3 Bcf/d of natural gas pipeline capacity by the end of this quarter, compared with an increase of 2.3 Bcf/d in volumes in the fourth quarter of 2017,” Argus Media  reports.

“The projects this quarter should provide more takeaway capacity than what six smaller projects brought to the region in the fourth quarter of 2017.” 

EIA Forecasts Increasing Global Crude Production Through 2019

The U.S. Energy Information Administration’s (EIA) new Short-Term Energy Outlook forecasts Brent crude oil to average $60 per barrel (b) in 2018 and $61/b in 2019, slightly higher than the $54/b average in 2017. In both 2018 and 2019, EIA expects total global crude oil production to be slightly greater than global consumption, with U.S. crude oil production increasing more than any other country.

EIA forecasts the West Texas Intermediate (WTI) crude oil spot price will average $55/b in 2018 and $57/b in 2019, or $4/b and $5/b, respectively, lower than Brent prices. This price difference is expected to narrow from the $6/b average price difference seen in the fourth quarter of 2017 because current constraints on the capacity to transport crude oil from the Cushing, OK storage hub (the geographic location associated with the WTI price) to the U.S. Gulf Coast are expected to gradually lessen. 

Subscribe SUM17

FREE SUBSCRIPTION*

• Print magazine
Digital magazine
• VALVE eNews
Read the latest issue

*to qualified valve professionals in the U.S./Canada

BUYERS GUIDE 300x220
Advertisement

Looking for a career in the Valve Industry?

ValveCareers Horiz

To learn more, watch the videos below or visit ValveCareers.com a special initiative of the Valve Manufacturers Association

  • Latest Post

  • Popular

  • Links

  • Events

New Products