-Power generation will be the biggest driver of demand for natural gas this year, according to a new report by the American Petroleum Institute. Via Platts, the wave of coal-fired power plant retirements spurred by new environmental regulations will increase the uptake of natural gas for electricity. The API also expects demand for natural gas to grow in the transportation market as a fuel for trucks, railroads and ships.
-TransCanada’s Keystone XL pipeline may never get built, but that has not stopped Canada from sending record amounts of oil into the U.S. Via Bloomberg Businessweek, Canada now supplies 43% of the U.S.’s oil imports, up from 15% a decade ago. Pipeline expansions and reversals and rail shipping have filled the void left by Keystone XL, which has been in regulatory and political limbo since 2008. The White House said earlier this week President Obama will veto a Republican-backed bill approving the pipeline currently being considered in Congress.
-Meanwhile, regulators in Quebec declared their support for TransCanada’s $12 billion Energy East pipeline, the Financial Post reports. The project would send 1.1 million barrels per day of Alberta crude to export terminals and refineries in Quebec and New Brunswick. The pipeline has run into opposition from groups concerned about its possible impact on river habitats and potential costs to gas consumers.
-Mexican state oil company Pemex is in talks to import 100,000 barrels per day of light crude from the U.S., Bloomberg reports. Pemex would mix the light crude with its heavy oil to increase gasoline production and improve its refining operations. Analysts believe the Obama administration will approve Pemex’s request. The U.S. law that bans crude exports does not bar oil exchanges between the U.S. and Mexico.
-FuelFix explores the effect of the oil price plunge on the biggest risk takers in the exploration and production business. E&P firms are expected to cut spending by 17% this year, but that estimate — released today by Cowen and Co. — assumes an average oil price of $70 per barrel. Many firms are trimming costs and delaying contracts, but some are holding fast on their biggest projects. Hess Corp., for instance, is moving ahead with its $6 billion Stampede deepwater Gulf of Mexico project, which was approved when oil traded at more than $80 per barrel.
