Saturday, August 20, 2011

Natural Gas and the EPA Train Wreck

The Alaska Gas Pipeline has a few high drag problems, namely State of Alaska - Producer problems (Point Thomson / Fiscal structure) and market problems ($4/MMBTU gas / Shale gas / lack of customers).

Setting aside State of Alaska - Producer problems will the demand side ever tilt in favor of an Alaska Gas Pipeline? One factor of this equation may be new EPA regulations that impact coal fired power plants. The wave of new EPA regulations is known as the "train wreck".

Outfits like TVA are closing old coal plants (LINK) and building more nuclear and more gas fired combined cycle plants.

They say even a blind hog finds nut now and then, maybe an unintended consequence of the EPA Train Wreck will be higher gas prices and firm buyers for more gas.

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