In an update posted on September 18, 2019, the Institute for Energy Economics and Financial Analysis (IEEFA) discusses low natural gas prices now and going forward. They say, “With the news from IHS Markit that natural gas prices in the United States will drop below $2 MMBtu in 2020 and remain low through at least 2024, if not longer, heads must be exploding in the board rooms of oil and gas producers throughout the U.S. and Canada. The profit picture is now imploding. The ramifications run deep, far and wide. The mantra that more pipelines will rationalize the market has been upended. This view from the oil and gas industry never made sense. As IHS Markit makes clear, new pipeline capacity contributes to an oversupply of natural gas forcing down prices and profits.”
The IEEFA update is based on a new forecast from IKS Markit, a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The update notes that:
- New pipeline capacity contributes to an oversupply of natural gas forcing down prices and profits.
- Smaller exploration and production companies, already suffering, are likely to continue to fail.
- The oil and gas equipment and supply sector will worsen.
- The global market remains oversupplied, with limited profit potential on the export side. Increased exports from the U.S. will deepen the oversupply.
In a September 18 article, OilPrice says, “While gas has become the primary source of electricity production, technological advancements are about to make fossil fuels more expensive and therefore uneconomic compared to renewables. The tipping point could come much sooner than certain utilities and investors are expecting, which could hit current investment plans for gas-fired power plants.”
Despite the continuing predictions of the decreasing demand for fossil fuels and the explosive increase in both demand and capacity for renewables, Dominion continues its efforts to build the unnecessary Atlantic Coast Pipeline. On September 25, 2019, Maplight and the Huffington Post discussed “The $109 Million Lobbying Effort To Run A Pipeline Through National Treasures.”
Maplight says, “A trio of utility giants building a natural gas pipeline that would cut across the Appalachian Trail has spent more than $109 million lobbying federal lawmakers and officials since the $7.8 billion project was unveiled five years ago, according to a MapLight analysis. The controversial 600-mile-long project, which is being compared to the Dakota Access Pipeline because of its stiff opposition from Native and local communities, would bisect the fabled trail, as well as the Blue Ridge Parkway and a pair of national forests. Appeals courts have thrown out seven separate permits for the project, with sentiment running so high that one judge wrote an opinion using a quote from The Lorax to blast the U.S. Forest Service for its failure ‘to speak for the trees, for the trees have no tongues.’ Despite the setbacks, the utilities have continued to press their case, hoping the rulings can be overturned by the U.S. Supreme Court or Congress.”
On other words, Dominion is pushing hard to build a pipeline that industry analysts say is well on its way to being both unneeded and outmoded.