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Construction Starts at $872M Louisiana Power Plant

Entergy Louisiana has formally kicked off construction of the Lake Charles Power Station in Calcasieu Parish, LA. The combined-cycle, natural gas-fired plant’s estimated cost is $872 million, including transmission and other project-related costs. It is expected to enter commercial operation by June 2020.

The plant is projected to lower customer energy costs between $1.3 and $2 billion over its anticipated 30-year life. Combined-cycle units, compared to Entergy’s older gas-fired plants, will on average cut carbon dioxide emissions by approximately 40%. 


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.” 

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