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In This Issue

LePage Wants to Develop a New Gas Pipeline From Quebec

County Planner: Power Line Project Could Shift Out of Southern York

Natural Gas and Oil Market Update

EIA - Weekly Natural Gas Storage Report

NYMEX Natural Gas Week-to-Week Price Change

Natural Gas Futures - Five Year Price


NOAA 6 to 10 Day Outlook
Color indicates the probability of forecasted temperatures being above or below a historical average for the period.


Market Overviews

LePage Wants to Develop a New Gas Pipeline From Quebec

Press Herald | September 28, 2017

The governor says a new gas line could lower prices in Maine, but it would cost hundreds of millions of dollars and some people at a conference in Falmouth say the idea is unrealistic..

Frustrated by failed attempts to greatly expand natural gas capacity in New England, Gov. Paul LePage said Thursday that he wants to develop a new pipeline from Quebec into Maine in an effort to lower energy prices for homes and businesses.

“We cannot move forward as a state without more pipeline capacity,” LePage told a meeting of industry professionals and other business people at the fifth annual Natural Gas Conference held at The Woodlands Club in Falmouth.

LePage told the group he plans to meet with officials in Quebec in the next month or so. In subsequent comments to the Portland Press Herald, LePage said the province is interested in a new gas line that could bring supply from western Canada through Maine.

“The Canadians want to help,” he said.

Attempts to reach the Canadian Consulate General in Boston were unsuccessful Thursday.

LePage’s energy office is in contact with the consulate, which currently is led by David Alward, a former New Brunswick premier. LePage supported Alward’s attempts to bring a proposed crude oil pipeline from western Canada to New Brunswick.

Maine officials have been trying for years to expand pipeline capacity in an effort to ease the hefty price differential that manufacturers pay for energy, compared to their competitors in the Southeast and Midwest. Those efforts have largely been stalled by public and political opposition to building new pipelines to the south, notably in Massachusetts.

Maine is affected because the lines that bring lower-cost natural gas from Pennsylvania and New York must first pass through Massachusetts, supplying homes, businesses and power plants along the way. On the coldest days, there’s not enough gas to meet all the region’s demand, causing prices to spike.

At the same time, environmental groups in Maine have been fighting pipeline expansions, favoring investments in efficiency, wind and solar.

LePage provided no details about his proposal. But any new pipeline would take hundreds of millions of dollars in investment, commitments from end users and years of studies and permits, leading some experts at the conference to say the governor’s idea is unrealistic. They also noted that a pipeline from Quebec through Maine already exists – the 18-year-old Portland Natural Gas Transmission System, or PNGTS, which runs from the border 143 miles to Westbrook.

Representatives from PNGTS at the conference declined to comment. But Scott Castleman, a natural gas spokesman for part-owner TransCanada, told the Press Herald that while his company is always looking for ways to meet demand in the United States, he wasn’t aware of TransCanada’s participation in meetings with LePage.

PNGTS is completing a smaller expansion, called Continent to Coast, which is set to go into service this fall.

Whatever its validity, LePage’s vision reflects a growing resignation among some Maine officials that opposition to new pipelines in southern New England will continue to block access to greater quantities of low-cost gas from Appalachian shale deposits.

In his remarks to the gas group, LePage blamed “liberals” who have pushed policies to subsidize wind and solar energy for Maine’s above-average electric costs, noting that nearly half of the state’s electricity is generated by gas.

LePage also acknowledged the transition in the forest products industry that has led to five paper mill closings in three years. But he suggested the paper industry can reinvent itself and make other goods, such as packaging, if natural gas costs could be lowered.

If a new pipeline from Quebec has a role in that, it wasn’t clear to some experts who gave presentations at the conference.

“You wouldn’t build a new pipeline, it wouldn’t make sense,” said Rich Silkman, a founder and partner at Competitive Energy Services.

Silkman was a principal in the group that extended gas pipelines to the Kennebec Valley in 2010, which were later taken over by Summit Natural Gas of Maine. Silkman also said lower oil prices would make it hard to raise capital for any large natural gas expansion.

“The world is different today than it was five years ago,” Silkman said.

Stephen Leahy, vice president of policy and analysis at the Northeast Gas Association, said LePage was “thinking outside the box” on gas supply to the region, but that businesses would have to sign contracts to underwrite costs.

“It’s interesting and encouraging that the governor is looking to bring new capacity into the state,” he said.

Read More:

County Planner: Power Line Project Could Shift Out of Southern York

York Dispatch | September 28, 2017

A controversial proposal to build a new high-voltage power line between Maryland and Pennsylvania might not affect York County after all.

York County Planning Commission Director Felicia Dell and her staff told the commissioners at their monthly meeting Sept. 19 that there's a chance the project could "shift" to another location.

She said electric wholesaler PJM Interconnection, which has contracted with Transource Energy to build the $320 million Independence Energy Connection project, could hire a new contractor or hire additional contractors.

Dell said PJM representatives told her "the project might be altered" and that PJM is "accepting proposals for some aspect" of the energy project.

Dell could not provide more details, she said.

PJM didn't clarify how many proposals it has received for that new "aspect," she said, or whether Transource Energy submitted a proposal.

According to PJM, the new transmission line is needed to alleviate an electric "bottleneck" in the mid-Atlantic region, which would reduce the cost of electricity for ratepayers.

Transource told the York County Planning Commission earlier this year that 15 miles of the project could affect residents in Hopewell, East Hopewell, Fawn and Lower Chanceford townships, Dell has said.

Transource held two open houses in York County — one in June and one in August — to hear comments from residents and answer their questions. The company revised its proposed route for the power line after the first meeting with residents.

Farmers, landowners and residents have organized to oppose the project, and the group Stop Transource in Pennsylvania and Maryland has hired a public-relations specialist to assist the effort.

The county planners also are concerned about the "impact the high-voltage power line and associated right of way could have on land use in the county," Dell has said.

“The southeastern portion of the county has some of the best contiguous acreages of prime agricultural soils and preserved farms," she explained. "It also includes unique features and game lands.”

Transource Energy spokeswoman Abby Foster said Wednesday, Sept. 20, that there was confusion between PJM and Dell.

"The (Independence) Energy Connection is part of PJM's 9A Market Efficiency project and the window for bids on that project closed with the project being awarded to Transource in 2016," Foster said.

Foster, who was not at the PJM meeting with Dell, said she anticipates Transource officials will wrap up the final, proposed transmission route in October.

Asked about possible confusion, Dell stood by her remarks to the planning commission Sept. 19 and added that her staff is working with PJM to clarify the project's location.

The final proposal will be submitted to the Pennsylvania Public Utility Commission before the end of the year, and it could be submitted as soon as October, Foster said.

Read More:

Natural Gas and Oil Market Update


U.S. Natural Gas Prices Rise As Winter Stocks Look Tight: Kemp

Reuters | September 28, 2017

U.S. natural gas stocks look somewhat tight after low prices this summer worked off the excess stocks that built up in the first half of the year.

Current stocks are in line with the five-year seasonal average but that may not be enough given the increase in exports and the number of additional combined-cycle power plants that have become operational in 2017.

The last two winters have been exceptionally mild; if this winter proves colder, which is likely simply on the basis of probabilities, inventories could come under pressure.


Oil Ends Higher As Crude Supplies Unexpectedly Decline

Market Watcxh | September 28, 2017

Oil prices ended higher on Wednesday after U.S. government data revealed an unexpected decline in crude inventories, but a rise in gasoline stockpiles for the first time in four weeks kept gains in check.

The “data suggest that refiners have recovered from the [Hurricane] Harvey-related outages, and most importantly that downstream operations are returning to normal,” said Tyler Richey, co-editor of the Sevens Report.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report

Working gas in storage was 3,466 Bcf as of Friday, September 22, 2017, according to EIA estimates. This represents a net increase of 58 Bcf from the previous week. Stocks were 127 Bcf less than last year at this time and 41 Bcf above the five-year average of 3,425 Bcf. At 3,466 Bcf, total working gas is within the five-year historical range.

NYMEX Natural Gas Week-to-Week Price Change NYMEX Natural Gas Week-to-Week Price Change

Natural Gas Futures - Five Year Price ($ per mmBtu)

NYMEX Natural Gas Week-to-Week Price Change - Five Yearly Snapshot

Disclaimer: The information contained in these reports is gathered from public and/or internal sources and is presented solely for the convenience of our customers and Newsletter Subscribers. Patriot Energy Group makes no representation or warranty, express or implied as to the accuracy or completeness of the information set forth in this newsletter, and Patriot Energy shall not have any liability to any person or entity resulting from use of this information in any way.
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