By JUDY NEWMAN
608-252-6156
jdnewman@madison.com
By December 2013, the UW-Madison’s Charter Street heating plant will be off its diet of coal and may start digesting wood chips, if state lawmakers approve a $251 million project.
The project, which was detailed on Tuesday, calls for:
• Retiring three of the heating plant’s coal-burning boilers, installed in the 1950s, and replacing them with a natural-gas boiler.
Modifying the fourth coal-fired boiler to accommodate biomass and natural gas.
• Maintaining a fifth boiler, fueled by natural gas, as is.
• Designing and installing a new boiler, bigger than any of the others, to operate on biomass and natural gas.
The project is included in Gov. Jim Doyle’s biennial capital budget and will need approval from the Joint Finance Committee and the full Legislature.
The changes would eliminate the need for nearly 110,000 tons of coal a year, replacing that fuel with as much as 250,000 tons of biomass, such as waste wood and agricultural products. They also would decrease pollution and create a market for biomass in Wisconsin, state officials said.
"That’s really the fundamental change we’re going for here," said Andrew Moyer, executive assistant to Wisconsin Department of Administration Secretary Michael Morgan.
"It’s exactly the path that we need to be on," said Jennifer Feyerherm, director of the Sierra Club’s Wisconsin Clean Energy Campaign.
Wisconsin is one of the best states in the country for biofuel, said Alan Fish, UW-Madison associate vice chancellor for facilities planning and management. State forests are laden with waste wood and Wisconsin’s once-thriving paper industry has shrunk dramatically. Creating a market for wood chips or pellets of waste wood and plastic would create jobs and help the economy, Fish said.
At the same time, crops grown for fuel, like switchgrass, and agricultural waste such as corn stalks are abundant, he said.
The new boiler would use circulating fluidized bed combustion, in which jets of air swirl the fuel around like a tornado, as Fish put it. The technology makes it easier to use different types and amounts of biomass, and to mix it with natural gas, he said.
Fish said the system is most efficient with 80 percent biomass and 20 percent natural gas, but it will take a while for the biofuel market to get organized and supply that much product. "We think we can probably accommodate two trainloads of renewable fuels a day, at full capacity," Fish said. Currently, trains bring coal in about every other day, he said.
A proposed $20 million biomass research lab, could be built adjacent to the heating plant. It is not included in the Charter Street proposal.
The new boiler will nearly eliminate sulfur dioxide emissions from the Charter Street plant, and could reduce particulates enough to put Dane County back into compliance for that type of pollution, according to a study by Titus, a Milwaukee firm.
The Charter Street plant is the largest of three that provide steam for heat and for chilled air for UW campus buildings. The other two are Walnut Street and the West Campus power plant co-owned by Madison Gas & Electric. Both burn natural gas.
The Capitol heat and power plant, at Blair and Main streets, which uses about one-third coal, will be converted to all natural gas, in a separate $25 million project.
Thursday, May 21, 2009
Wednesday, May 20, 2009
Natural Gas Inventories in U.S. Getting Full UP
By Reg Curren
May 20 (Bloomberg) -- Natural gas was little changed amid forecasts that a government report tomorrow will show an above- average rise in U.S. supplies.
The Energy Department will probably say gas inventories rose 93 billion cubic feet in the week ended May 15, according to the median of 12 analyst estimates compiled by Bloomberg. The five-year average change is an increase of 90 billion. Gas storage is heading toward a record high before the fall, when heating-fuel demand begins to siphon off supplies.
“Natural gas is struggling because we’re well supplied,” said Michael Rose, a director of trading at Angus Jackson Inc., a brokerage in Fort Lauderdale, Florida. “You would have thought with the amount of speculators that had come into the market over the past several weeks that gas would be more bullish because of equities and the other energies.”
Natural gas for June delivery fell 0.6 cent to $3.908 per million British thermal units at 12:15 p.m. on the New York Mercantile Exchange. Gas has declined 30 percent this year.
The Energy Department is scheduled to release its storage report tomorrow at 10:30 a.m. in Washington. Supplies were 23 percent higher than the five-year average in last week’s report.
Shares of U.S. commodity producers rose as investors bet on the recession easing and factories ramping up. The Standard & Poor’s index of 500 stocks gained as much as 1.8 percent.
Companies injected 2.178 trillion cubic feet of gas into storage between April and November 2008, according to the Energy Department. A similar rebuilding of inventories this year would put stockpiles near 3.8 trillion cubic feet by Oct. 31, 8 percent above the record 3.545 trillion cubic feet in storage on Nov. 2, 2007.
Gas Demand
Industrial demand for gas may decline 8 percent this year because of the recession, the Energy Department said on May 12. Overall U.S. consumption is expected to contract 1.9 percent, outpacing reductions in output. Factory and power-plant consumption together accounts for 58 percent of U.S. gas use.
“Until the economy recovers, U.S. demand and even world demand, for that matter, can’t come back,” said Ryan Moe, a risk management consultant for FC Stone LLC in Minneapolis. “A lot of people aren’t sold yet that we’re ready to rally in natural gas.”
Overwhelming inventories and slack demand will weigh on the market for much of 2009, limiting the size of price moves to the up side, said Cameron Horwitz, an analyst at SunTrust Robinson Humphrey Inc. in Houston.
“It seems like people want to push it lower, but it’s getting too much support from the broader conditions,” he said. “Right now, all eyes are on storage and people are concerned about what happens if we bump up on those physical limits and what that will do to prices in the fall.”
Horwitz said prices probably won’t drop much further, having put in a low last month. Gas tumbled to $3.155 per million Btu on April 27 and rallied 45 percent to $4.575 on May 13 before stalling and heading lower again.
To contact the reporters on this story: Reg Curren in Calgary at rcurren@bloomberg.net.
May 20 (Bloomberg) -- Natural gas was little changed amid forecasts that a government report tomorrow will show an above- average rise in U.S. supplies.
The Energy Department will probably say gas inventories rose 93 billion cubic feet in the week ended May 15, according to the median of 12 analyst estimates compiled by Bloomberg. The five-year average change is an increase of 90 billion. Gas storage is heading toward a record high before the fall, when heating-fuel demand begins to siphon off supplies.
“Natural gas is struggling because we’re well supplied,” said Michael Rose, a director of trading at Angus Jackson Inc., a brokerage in Fort Lauderdale, Florida. “You would have thought with the amount of speculators that had come into the market over the past several weeks that gas would be more bullish because of equities and the other energies.”
Natural gas for June delivery fell 0.6 cent to $3.908 per million British thermal units at 12:15 p.m. on the New York Mercantile Exchange. Gas has declined 30 percent this year.
The Energy Department is scheduled to release its storage report tomorrow at 10:30 a.m. in Washington. Supplies were 23 percent higher than the five-year average in last week’s report.
Shares of U.S. commodity producers rose as investors bet on the recession easing and factories ramping up. The Standard & Poor’s index of 500 stocks gained as much as 1.8 percent.
Companies injected 2.178 trillion cubic feet of gas into storage between April and November 2008, according to the Energy Department. A similar rebuilding of inventories this year would put stockpiles near 3.8 trillion cubic feet by Oct. 31, 8 percent above the record 3.545 trillion cubic feet in storage on Nov. 2, 2007.
Gas Demand
Industrial demand for gas may decline 8 percent this year because of the recession, the Energy Department said on May 12. Overall U.S. consumption is expected to contract 1.9 percent, outpacing reductions in output. Factory and power-plant consumption together accounts for 58 percent of U.S. gas use.
“Until the economy recovers, U.S. demand and even world demand, for that matter, can’t come back,” said Ryan Moe, a risk management consultant for FC Stone LLC in Minneapolis. “A lot of people aren’t sold yet that we’re ready to rally in natural gas.”
Overwhelming inventories and slack demand will weigh on the market for much of 2009, limiting the size of price moves to the up side, said Cameron Horwitz, an analyst at SunTrust Robinson Humphrey Inc. in Houston.
“It seems like people want to push it lower, but it’s getting too much support from the broader conditions,” he said. “Right now, all eyes are on storage and people are concerned about what happens if we bump up on those physical limits and what that will do to prices in the fall.”
Horwitz said prices probably won’t drop much further, having put in a low last month. Gas tumbled to $3.155 per million Btu on April 27 and rallied 45 percent to $4.575 on May 13 before stalling and heading lower again.
To contact the reporters on this story: Reg Curren in Calgary at rcurren@bloomberg.net.
Natural Gas Prices Competing Against LNG
Anadarko Petroleum Corp. Chief Executive Officer Jim Hackett said he sees headwinds for natural gas prices in part because of increased liquefied natural gas supplies.
“Our feeling is that natural gas prices have some challenges because of the LNG that may be coming this way due to our storage capability in the United States and the reduced industrial demand overseas,” Hackett said today in an interview in The Woodlands, after the company’s annual shareholders meeting.
Hackett said there needs to be a “reasonable market as well as a reasonable price,” and he called for gas to be used more in vehicles. There may be more than 100 years’ worth of supply to be found, he said. Gas futures on the New York Mercantile Exchange have dropped about 30 percent this year, compared with oil’s 33 percent increase.
“We need to have natural gas be the alternative fuel for the next 10 to 20 years until new technologies are developed and brought online,” Hackett said.
The crude oil “headwinds” may be less than for gas even though it also is in a full-storage situation, Hackett said. He said lower commodity prices for consumers are “effectively a fiscal stimulus that was not needed by government handouts.” He said prices need to be high enough for continued investment.
“One of the things we of course are pleased by is a modest rise in the price of oil recently, which we need to be able to continue to do deepwater drilling and remote exploration,” he said.
Anadarko is the second-largest independent oil and natural gas producer in the U.S. after Devon Energy Corp.
www.bloomberg.com
“Our feeling is that natural gas prices have some challenges because of the LNG that may be coming this way due to our storage capability in the United States and the reduced industrial demand overseas,” Hackett said today in an interview in The Woodlands, after the company’s annual shareholders meeting.
Hackett said there needs to be a “reasonable market as well as a reasonable price,” and he called for gas to be used more in vehicles. There may be more than 100 years’ worth of supply to be found, he said. Gas futures on the New York Mercantile Exchange have dropped about 30 percent this year, compared with oil’s 33 percent increase.
“We need to have natural gas be the alternative fuel for the next 10 to 20 years until new technologies are developed and brought online,” Hackett said.
The crude oil “headwinds” may be less than for gas even though it also is in a full-storage situation, Hackett said. He said lower commodity prices for consumers are “effectively a fiscal stimulus that was not needed by government handouts.” He said prices need to be high enough for continued investment.
“One of the things we of course are pleased by is a modest rise in the price of oil recently, which we need to be able to continue to do deepwater drilling and remote exploration,” he said.
Anadarko is the second-largest independent oil and natural gas producer in the U.S. after Devon Energy Corp.
www.bloomberg.com
Tuesday, May 19, 2009
Natural Gas Has Bumpy Ride
May 18 (Bloomberg) -- Natural gas futures are poised to give back of their recent gains as a head-and-shoulders pattern that formed last week signaled a reversal, according to a technical analysis by John Kilduff, senior vice president of energy at MF Global Inc.
The pattern was created during trading May 12 through May 15, with a surge above $4.50 per million British thermal units on May 13 forming the head, Kilduff said in a telephone interview. Gas reached $4.575 before beginning a decline.
Natural gas futures had risen from $3.155 per million Btu on April 27, the lowest since Sept. 5, 2002, amid speculation that supplies will decline as drilling slows. Prices gained 22 percent in the week ended May 8, the biggest increase in more than two years.
“We’re going to give back the majority of this move, so I’d look for it to give back $1,” he said. “It’s going to be pretty quick because there’s not been a lot of conviction in this buying. This was a rally built on sand.”
A similar formation in early January, with an intraday high of $6.24 on Jan. 6, set off a 31 percent decline to $4.28 on Feb. 2, Kilduff said. Gas rallied for a short period from the Feb. 2 low before tumbling more into late April.
A break of the 10-day moving average on May 15 indicates “an extended move lower” to between $3.50 and $3.75, Kilduff said.
Natural gas for June delivery fell 19.4 cents, or 4.5 percent, to settle at $4.098 per million Btu on May 15 on the New York Mercantile Exchange.
Technical traders monitor patterns on daily charts for clues to price direction, and may sell or buy based on those signals.
To contact the reporter on this story: Reg Curren in Calgary at rcurren@bloomberg.net.
The pattern was created during trading May 12 through May 15, with a surge above $4.50 per million British thermal units on May 13 forming the head, Kilduff said in a telephone interview. Gas reached $4.575 before beginning a decline.
Natural gas futures had risen from $3.155 per million Btu on April 27, the lowest since Sept. 5, 2002, amid speculation that supplies will decline as drilling slows. Prices gained 22 percent in the week ended May 8, the biggest increase in more than two years.
“We’re going to give back the majority of this move, so I’d look for it to give back $1,” he said. “It’s going to be pretty quick because there’s not been a lot of conviction in this buying. This was a rally built on sand.”
A similar formation in early January, with an intraday high of $6.24 on Jan. 6, set off a 31 percent decline to $4.28 on Feb. 2, Kilduff said. Gas rallied for a short period from the Feb. 2 low before tumbling more into late April.
A break of the 10-day moving average on May 15 indicates “an extended move lower” to between $3.50 and $3.75, Kilduff said.
Natural gas for June delivery fell 19.4 cents, or 4.5 percent, to settle at $4.098 per million Btu on May 15 on the New York Mercantile Exchange.
Technical traders monitor patterns on daily charts for clues to price direction, and may sell or buy based on those signals.
To contact the reporter on this story: Reg Curren in Calgary at rcurren@bloomberg.net.
Monday, May 18, 2009
Natural Gas Uptick May Go Downtick
May 18 (Bloomberg) -- Natural gas futures are poised to give back of their recent gains as a head-and-shoulders pattern that formed last week signaled a reversal, according to a technical analysis by John Kilduff, senior vice president of energy at MF Global Inc.
The pattern was created during trading May 12 through May 15, with a surge above $4.50 per million British thermal units on May 13 forming the head, Kilduff said in a telephone interview. Gas reached $4.575 before beginning a decline.
Natural gas futures had risen from $3.155 per million Btu on April 27, the lowest since Sept. 5, 2002, amid speculation that supplies will decline as drilling slows. Prices gained 22 percent in the week ended May 8, the biggest increase in more than two years.
“We’re going to give back the majority of this move, so I’d look for it to give back $1,” he said. “It’s going to be pretty quick because there’s not been a lot of conviction in this buying. This was a rally built on sand.”
A similar formation in early January, with an intraday high of $6.24 on Jan. 6, set off a 31 percent decline to $4.28 on Feb. 2, Kilduff said. Gas rallied for a short period from the Feb. 2 low before tumbling more into late April.
A break of the 10-day moving average on May 15 indicates “an extended move lower” to between $3.50 and $3.75, Kilduff said.
Natural gas for June delivery fell 19.4 cents, or 4.5 percent, to settle at $4.098 per million Btu on May 15 on the New York Mercantile Exchange.
Technical traders monitor patterns on daily charts for clues to price direction, and may sell or buy based on those signals.
To contact the reporter on this story: Reg Curren in Calgary at rcurren@bloomberg.net.
Last Updated: May 17, 2009 19:00 EDT
The pattern was created during trading May 12 through May 15, with a surge above $4.50 per million British thermal units on May 13 forming the head, Kilduff said in a telephone interview. Gas reached $4.575 before beginning a decline.
Natural gas futures had risen from $3.155 per million Btu on April 27, the lowest since Sept. 5, 2002, amid speculation that supplies will decline as drilling slows. Prices gained 22 percent in the week ended May 8, the biggest increase in more than two years.
“We’re going to give back the majority of this move, so I’d look for it to give back $1,” he said. “It’s going to be pretty quick because there’s not been a lot of conviction in this buying. This was a rally built on sand.”
A similar formation in early January, with an intraday high of $6.24 on Jan. 6, set off a 31 percent decline to $4.28 on Feb. 2, Kilduff said. Gas rallied for a short period from the Feb. 2 low before tumbling more into late April.
A break of the 10-day moving average on May 15 indicates “an extended move lower” to between $3.50 and $3.75, Kilduff said.
Natural gas for June delivery fell 19.4 cents, or 4.5 percent, to settle at $4.098 per million Btu on May 15 on the New York Mercantile Exchange.
Technical traders monitor patterns on daily charts for clues to price direction, and may sell or buy based on those signals.
To contact the reporter on this story: Reg Curren in Calgary at rcurren@bloomberg.net.
Last Updated: May 17, 2009 19:00 EDT
Sunday, May 17, 2009
Natural Gas Rig Count Still Going Down
Colorado rig count up 2; US total falls by 10
Associated Press - May 15, 2009 2:44 PM ET
HOUSTON (AP) - The number of working oil and gas rigs in Colorado is up two from last week, according to a Houston company that keeps nationwide counts.
But Baker Hughes Inc. says the overall number of rigs actively exploring in the U.S. dropped by 10 to 918.
Officials say 728 of those are exploring for natural gas, and 181 are oil rigs.
Nine are listed as miscellaneous.
Among other major oil- and gas-producing states, Texas lost 13 rigs, Arkansas lost four, New Mexico and North Dakota each lost three and California lost one.
Louisiana added eight rigs, and Wyoming and Alaska each added one. Oklahoma was unchanged.
The rig count has dropped 50.7% from its total of 1,862 a year ago.
Baker Hughes has been tracking rig counts since 1944.
On the Net:
Baker Hughes Inc.: http://www.bakerhughesdirect.com
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Associated Press - May 15, 2009 2:44 PM ET
HOUSTON (AP) - The number of working oil and gas rigs in Colorado is up two from last week, according to a Houston company that keeps nationwide counts.
But Baker Hughes Inc. says the overall number of rigs actively exploring in the U.S. dropped by 10 to 918.
Officials say 728 of those are exploring for natural gas, and 181 are oil rigs.
Nine are listed as miscellaneous.
Among other major oil- and gas-producing states, Texas lost 13 rigs, Arkansas lost four, New Mexico and North Dakota each lost three and California lost one.
Louisiana added eight rigs, and Wyoming and Alaska each added one. Oklahoma was unchanged.
The rig count has dropped 50.7% from its total of 1,862 a year ago.
Baker Hughes has been tracking rig counts since 1944.
On the Net:
Baker Hughes Inc.: http://www.bakerhughesdirect.com
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Friday, May 15, 2009
Mexico Natural Gas Prices Lowered for Consumers
MEXICO CITY, May 14 (Reuters) - Mexico's state-run gas company Pemex will lower natural gas prices for consumers by 10 percent beginning at the end of June this year, the company said on Thursday.
Mexico -- a crude oil exporter -- is a net importer of natural gas despite having sizable resources. Pemex has set a goal to increase output enough to halve gas imports, possibly as soon as this year.
Natural gas and electricity prices in the United States have been dropping recently, tracking oil prices and falling demand because of the financial crisis.
June natural gas futures NGM9 eased 4.1 cents to close at $4.292 per mmBtu area on Thursday after slipping early to $4.125, then bouncing late to $4.349. (Reporting by Mica Rosenberg; Editing by Gary Hill)
Mexico -- a crude oil exporter -- is a net importer of natural gas despite having sizable resources. Pemex has set a goal to increase output enough to halve gas imports, possibly as soon as this year.
Natural gas and electricity prices in the United States have been dropping recently, tracking oil prices and falling demand because of the financial crisis.
June natural gas futures NGM9 eased 4.1 cents to close at $4.292 per mmBtu area on Thursday after slipping early to $4.125, then bouncing late to $4.349. (Reporting by Mica Rosenberg; Editing by Gary Hill)
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