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EPA caps busy year of regulatory action; gas stocks face rate hike challenge

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EPA caps busy year of regulatory action; gas stocks face rate hike challenge

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US EPA caps busy year of regulatory action on energy, air and water policy

The U.S. Environmental Protection Agency has had a busy year of regulatory activity. Some of the 2018 highlights included a proposed replacement for the Obama-era Clean Power Plan, a proposal to relax national fuel economy and emissions standards for cars and light-duty trucks, significant changes to an Obama-era rule regulating coal ash storage, and the reconsideration of an Obama-era rule restricting emissions of mercury and other airborne toxics from fossil fuel-fired power plants.

Gas utility stocks face rate hike challenge, could benefit from market fear

Gas utility stocks, often counted on for their dividend income, will have to compete in a rising interest rate environment as 2019 begins, although fears of economic instability could end up spurring a flight to safety that would benefit the sector, analysts said.

S&P downgrades Anadarko Basin producer Alta Mesa after management changes

S&P Global Ratings downgraded its ratings by two notches on Alta Mesa Resources Inc. after the Anadarko Basin-focused driller's announcement that it is replacing its senior management team, coupled with its failure to achieve operational goals and the effects of falling crude oil prices.

NYSE issues noncompliance warning to Cloud Peak Energy

The NYSE notified Cloud Peak Energy Inc. on Dec. 26 that its stock fell below the minimum threshold for listing on the exchange. The average closing price for common shares of the Powder River Basin coal producer has been below $1 for more than 30 consecutive trading days, which violates the exchange's requirements to continue listing.

Quoted

"The thing that has been recently keeping me up at night is, how do we effectively evolve the state regulatory process to ensure that it enables innovation rather than hinders it? The mandates of many commissions were created last century during a time when the pace of technology change was much slower than it is today," said Julia Hamm, CEO of the Smart Electric Power Alliance.

Power

* After a strong 2018, the U.S. renewable energy sector is expected to see its value to the grid, companies and customers grow in 2019, according to a recent outlook from consulting firm Deloitte.

* In a letter to U.S. EPA employees, acting administrator Andrew Wheeler said he will "initiate orderly shutdown procedures" if a final funding bill is not passed by midnight Friday, The Hill in Washington, D.C., reported.

* Environmental groups are urging South Carolina regulators to reconsider their decision to approve Dominion Energy Inc.'s all-stock acquisition of SCANA Corp. and cost recovery for the abandoned V.C. Summer nuclear plant expansion.

* PacifiCorp is seeking a 1.4% rate increase for its customers in four Northern California counties to cover costs tied to upgrade projects at the Craig and Hayden coal-fired plants in Colorado and the Jim Bridger coal plant in Wyoming, the Los Angeles Times reported.

* Enel Green Power North America Inc. agreed to sell its 100% class B equity stake in two wind farms in Nebraska and Kansas to Bank of America Merrill Lynch and J.P. Morgan for $651 million.

* Local police officials confirmed an explosion at a Consolidated Edison Inc. power facility in Queens, N.Y., that caused a "transmission dip in the area," the North Jersey Record reported. No injuries were reported due to the explosion.

* Connecticut Governor-elect Ned Lamont named Katie Dykes to oversee the state Department of Energy and Environmental Protection, The Associated Press reported. Dykes has served as chairwoman of the state Public Utilities Regulatory Authority since 2016.

Natural gas

* In recent federal environmental reports on LNG export projects, the U.S. EPA has stopped giving ratings to the reviews as it had for 30 years, and it has provided few comments.

* The Wyoming Department of Environmental Quality finalized new rules to reduce emissions from the state's new and modified oil and gas facilities.

* El Paso Natural Gas Co. LLC asked permission from the Federal Energy Regulatory Commission to expand its natural gas pipeline facilities in the northern Delaware Basin, adding up to 320,000 Dth/d of firm gas transportation capacity.

* Encana Corp. subsidiary Encana Oil & Gas (USA) Inc. completed the sale of its San Juan Basin assets in New Mexico to Denver-based private upstream company DJR Energy LLC for $480 million. Encana plans to use the sale proceeds to support its plans to buy back shares and increase its dividend by 25% in 2019.

* Federal Energy Regulatory Commission staff will allow Enbridge Inc.'s Algonquin Gas Transmission LLC natural gas pipeline an additional two years to complete the 132,705-Dth/d Atlantic Bridge expansion.

* Royal Dutch Shell PLC said it completed the sale of its stake in oil and gas assets in New Zealand to Austria's OMV AG for $578 million as part of its efforts to simplify the upstream portfolio.

* Singapore-based Vitol Asia Pte. Ltd. is seeking four LNG cargoes for delivery to South Korea in 2019 and 2020 through an S&P Global Platts' pricing process, Reuters reported, citing a commodity trader.

Oil

* A new report from Canada's National Energy Board said the primary factor behind the recent oil price differentials was a growing supply of western Canadian oil production, which was about 365,000 barrels above the amount of oil flowing daily in existing pipelines.

* Ultra Petroleum Corp. closed on an exchange agreement to reduce long-term debt by approximately $235 million.

* Brazilian environmental agency Ibama rejected TOTAL SA's appeal to reconsider the denial of an oil exploration permit in Foz do Amazonas, Reuters reported.

* Despite OPEC's move to cut oil production by 1.2 million barrels per day to prop up falling prices, global marker Brent has dropped 16%, or about $10 per barrel, according to Bloomberg News.

* Enbridge Inc. will get a C$14.7 million refund from the federal government tied to the scrapped Northern Gateway oil pipeline project, which would have moved oil from Alberta to British Columbia's northern coast, The Canadian Press reported.

* PAO Novatek said crude oil production has started at the Yaro-Yakhinskoye field in the Purovsky district of the Yamalo-Nenets Autonomous Region, a federal subject of Russia.

Coal

* The U.S. Department of Energy is seeking research into uses for coal as a feed stock for power, steelmaking and creating solid high-value products to improve its marketability.

* Total U.S. coal production for the week ended Dec. 22 increased 1.5% year over year to 15.9 million tons from 15.7 million tons, according to data from the U.S. Energy Information Administration.

* Total U.S. coal rail traffic for the week ended Dec. 22 grew 4.5% year over year to 93,964 carloads, according to data from the Association of American Railroads.

ChartWatch

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Although overall generation capacity additions fell month to month, two energy storage projects were among the capacity that was either finished or announced in November.

New from RRA

* On Oct. 16, the Federal Energy Regulatory Commission proposed fundamental changes to its methodology for determining the appropriate return on equity for transmission owners in New England that could have broad implications for utilities and utility investors nationwide.

The day ahead

* The EIA natural gas storage and petroleum status reports are due out today.

* 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.

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Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.

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