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Oil prices rise to 2-year high; coal rail traffic, output still down

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Oil prices rise to 2-year high; coal rail traffic, output still down

Top News

Tax reform injects uncertainty into renewable investor calculus

In an interview, Milbank Tweed Hadley & McCloy LLP partner Allan Marks discusses the House and Senate's dueling tax reform proposals and the potential impact to renewable energy project financing amid the market's broader uncertainty.

Oil prices rise to 2-year high as natural gas market tanks

Trading in an abbreviated session after the U.S. Thanksgiving holiday, the price of crude oil and natural gas diverged Friday, Nov. 24, as the oil market ran to a better-than-two-year high and natural gas values slumped to a one-month low.

US coal rail traffic, output still down in latest week but up roughly 9% YTD

Total U.S. coal rail traffic for the week that ended Nov. 18 decreased 9% year over year to 86,185 carloads, according to data from the Association of American Railroads. Year-to-date coal rail traffic rose 9% through the week, while overall rail traffic inched up 1.2% year over year to 554,066 carloads and intermodal units.

Power

* South Carolina lawmaker Kirkman Finlay has proposed legislation to stop SCANA Corp. from approving multi-million-dollar executive compensation packages following the $9 billion termination of two nuclear reactors at the V.C. Summer plant, The Post and Courier reported. If approved, the legislation would tie the compensation packages of SCANA's outgoing executives to the compensation offered to SCANA employees who lost their jobs after the cancellation of the nuclear project.

* Invenergy LLC delayed the opening of its proposed $1 billion combined-cycle natural gas-fired Clear River Energy Center to 2021 instead of 2020 due to the permitting delays in connecting the plant to the existing electric grid through an incomplete seven-mile National Grid USA transmission line, The Providence (R.I.) Journal reported. National Grid, however, said it is still waiting for Invenergy to provide a form of financial security and authorization from the company to begin the design work. The delays could jeopardize an agreement Invenergy has secured to sell power from the plant, according to the newspaper.

* The North Carolina Utilities Commission will begins hearings today on whether Duke Energy Corp.'s 1.3 million North Carolinian customers should pay the full cost of approximately $200 million for coal ash cleanup in their monthly bills, The Associated Press reported. Last week, subsidiary Duke Energy Progress LLC reached a tentative agreement with the NCUC cutting the utility's proposed 15% rate hike.

* Canadian Solar Inc. won a pipeline of 367-MWp solar projects in the third long-term energy auction by the Mexican cities of Aguascalientes, Hermosillo and Obregón. Upon completion, Comisión Federal de Electricidad will purchase the energy of the projects under a 15-year power purchase agreement and 20-year for clean energy certificates.

* Imaginea Energy Corp. parted ways with the private-equity firm Lime Rock Partners, but all the oil and gas assets have been reassigned to Cor4 Oil Corp., The Canadian Press reported. Imaginea CEO Suzanne West said she plans to make a "clean hydrocarbons" company.

* The Juniata Township board in Michigan scheduled a special hearing for NextEra Energy Resources LLC request of special land use permit for wind development for its Pegasus wind energy center, The Huron (Michigan) Daily reported. If approved, the project is expected to be completed by the end of 2018.

* Kansai Electric Power Co. received the final regulatory approval from authorities in Japan's Fukui province to restart two nuclear power reactors at the Ohi plant near Kyoto early next year, Deutsche Welle reported. "I have agreed to the resumption of the reactors after considering all the various factors," Fukui Gov. Issei Nishikawa reportedly said in a press briefing. The reactors were taken offline after the 2011 Fukushima disaster.

Natural gas/Oil

* U.S. Sen. Maria Cantwell, D-Wash., is vowing to block legislation that would open a portion of the Arctic National Wildlife Refuge for oil and natural gas drilling, The Seattle Times reported. "We are going to have to fight on the floor to try to stop this," Cantwell was quoted as saying. "It's a backdoor process that only needs 51 votes. They would never get it in the normal process."

* Genesis Energy LP launched a binding open season to secure long-term commitments to support a new gathering system to connect crude oil production to its existing Powder River basin pipeline. The operator will dedicate about 150,000 acres to the gathering system and the Powder River basin pipeline for a period of 10 years. Additionally, the operator has extended the term of its existing contracts a period of 10 years.

* TransCanada Corp. reportedly said it recovered 1,057 barrels of oil from the Keystone pipeline spill site at Amherst, S.D., and will conduct additional excavation beyond Nov. 26 for soil remediation purposes, according to Reuters. The pipeline was taken offline Nov. 16 after a 5,000-barrel spill.

* EnerVest Ltd. is facing a federal investigation over the sale of certain shale drilling rights in Ohio, The Wall Street Journal reported, citing sources close to the matter. The FBI's probe follows an eastern Ohio landowner's claims that the company sold valuable drilling rights on his property that should have been his to sell, sources told the Journal.

* Exxon Mobil Corp. will combine its fuels and lubricants division with the supply and refining divisions as part of a restructuring aimed at boosting profits, Reuters reported, citing the company's spokeswoman.

* Following an asset and growth strategy review, the South African energy company Sasol Ltd. canceled its plan to develop greenfield gas-to-liquids projects, including an approximately $13 billion project in Lake Charles, La., citing an unfavorable market environment.

* The Ohio Environmental Protection Agency told Energy Transfer Partners LP to "pause" horizontal drilling on the $4.2 billion Rover natural gas pipeline after another spill of clay-based slurry, The Repository of Canton, Ohio, reported. Ohio EPA Director Craig Butler said he would ask the Federal Energy Regulatory Commission to intervene in the matter.

* The 6th U.S. Circuit Court of Appeals ordered a temporary halt to the construction of a $2 billion natural gas pipeline in Summit County, Ohio, after the city of Green said the U.S. Environmental Protection Agency did not abide by its own rules at the time of granting NEXUS Gas Transmission a clean water certificate for the project, The Associated Press reported.

Coal

* PPL Corp. subsidiary Kentucky Utilities Co. earlier in November announced the retirement of units 1 and 2 at its coal-fired E.W. Brown plant in Mercer County, Ky. S&P Global Market Intelligence's unit-level production cost model indicates these plants run above market prices. The 107-MW unit 1 has been in service since 1957, and generated 218,832 MWh in 2016, good for a capacity factor of 23.28%. The 168-MW unit 2 generated 410,186 MWh in 2016, with a capacity factor of 27.80%.

* Peabody Energy Corp. has completed the sale of the majority of its inactive Burton coal mine and related infrastructure in Queensland, Australia, to the Lenton joint venture, of which New Hope Corp. Ltd. owns a majority stake, for about $11 million. The transaction also reduces Peabody's asset retirement obligation by about $41 million and provides for the release of about $30 million of restricted cash in support of such asset retirement obligation. Combined with the company's recently announced revolving credit facility, the deal is expected to free up about $300 million in cash.

Commodities

* After tumbling 15.5 cents to settle at $2.813/MMBtu on Nov. 24, NYMEX December natural gas futures retraced higher in technical buying overnight ahead of the Monday, Nov. 27, open and options expiration at the close of business. At 6:40 a.m. ET, the front-month contract was up 8.6 cents to $2.889/MMBtu.

* Day-ahead power values could vary at the return of the full workweek Monday, Nov. 27, as predominantly softer demand outlooks for Tuesday run against a renewed uptick in natural gas futures trading.

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New from RRA

On Nov. 21, several bills were passed by the Committee on Judiciary of the South Carolina House of Representatives that, if enacted, would significantly negatively impact the regulatory treatment to be accorded South Carolina Electric & Gas Co., or SCE&G, regarding its abandonment of V.C. Summer nuclear units 2 and 3.

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. equity markets. To view more SNL equity market indexes, click here. To view more SNL Energy commodities prices, click here.

The Daily Dose is updated as of 7:30 a.m. ET. Some links may require registration or a subscription. S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.