Alternative Funding Mechanism for Gas Transmission Infrastructure Upgrades
According the projections by the Energy Information Administration (EIA), natural gas demand will grow at an unparalleled rate over the next 20 years. These projections indicate growth from the current level of 22 TCF to over 30 TCF by the year 2013 and 35 TCF by 2020. This comes at a time when the industry's prime mover infrastructure boasts an average age of over 40 years; an infrastructure that struggles to meet peak gas demands today. Additionally, the exposure to environmental regulations, especially clean air requirements, continues to increase. Over the past 10-15 years, an increased level of attention has been paid to the question of what to do with the existing compression infrastructure. These questions include: Should we replace horsepower? What can we do to prolong the life of the infrastructure? How can we continue to meet the ever-increasing stringency of environmental requirements to reduce emissions? To date, replacement economics have not been favorable except in select cases. In cases where replacement has occurred, leverage from mandatory environmental costs or offsets thereto have played a significant role in the justification. Reductions in O&M and fuel costs derived from upgrading this infrastructure has also not proven sufficient for significant investment. In fact, only environmental requirements have acted as sufficient driver for significant investment in upgrades/improvements for the past 10 years. The APE has established guidelines for a market trading program in various regions of the U.S. Today, that market is viable and active on a daily basis. NOx allowances are currently selling at over $5,000 per ton (of NOx during the ozone season). In many cases, gas transmission units can reduce emissions and provide allowances at a cost that is attractive given the market pricing of such allowances. This mechanism could provide the gas transmission market an opportunity to invest in their aged infrastructure where it would otherwise not be justi
Price: 195.00