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Senators introduce energy incentive bill; investors to flock to midstream sector


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Senators introduce energy incentive bill; investors to flock to midstream sector

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US senators introduce energy tax credit extenders bill

Federal lawmakers have introduced legislation to extend tax credits that favor the development of nuclear power, carbon capture technology and other energy-related projects.

Jefferies sees investors rewarding US midstream energy for value, simplification

The stage is set for investors to flock to the U.S. midstream energy sector in 2018 amid a trend of structural simplification, low equity prices and improving fundamentals such as commodity prices, Jefferies analysts said.

Value of largest coal equity holders' positions swells in recent quarter

With many in the coal sector once again turning a profit, large investors are selectively placing, or in some cases withdrawing, large bets on U.S. coal producers. Many of the largest holders of coal equities are hedge funds, a group Mark Levin of Seaport Global Securities LLC recently said is "more times than not" a group with more short-term trading bias compared to long-only funds.


* E. Allen Nye Jr. will succeed Robert Shapard as CEO of Oncor Electric Delivery Co. LLC upon the completion of the Texas transmission and distribution utility's acquisition by Sempra Energy, according to an SEC filing.

* The arguments raised and recommendations made in a recent letter from the National Association of Regulatory Utility Commissioners asking the Federal Energy Regulatory Commission to reform its policies implementing the Public Utility Regulatory Policies Act of 1978 are far from new.

* PNM Resources Inc. is "very disappointed" with New Mexico regulators' decision to partially adopt certification of stipulation in the general rate review filing of its Public Service Co. of New Mexico subsidiary. The order adopts a nonfuel revenue increase of $62.3 million phased-in over two years for services rendered after Jan. 1, 2018.

* The Public Utilities Commission of Ohio plans to open a proceeding in early 2018 to study the impacts of the recently passed federal tax reform bill on consumers and Ohio's regulated utilities, PUCO Chairman Asim Haque said in a statement.

* After a five-hour joint hearing, two New Jersey committees passed legislation offering two nuclear plants operated by Public Service Enterprise Group Inc. additional revenue through "nuclear diversity credits." S. 3560 and A. 5330 passed on Dec. 20 with two amendments.

* South Carolina regulators denied South Carolina Electric & Gas Co.'s motion to dismiss the Sept. 26 filing by the state Office of Regulatory Staff regarding the abandoned V.C. Summer units 2 and 3, each 1,117-MW nuclear plants. The state Public Service Commission also ordered that a hearing be set on the ORS' request for rate relief, which seeks to implement an immediate rate reduction of the SCANA Corp. subsidiary's electric retail revenues by about $445 million annually.

* The U.S. Nuclear Regulatory Commission launched a special inspection at Exelon Corp.-owned Clinton nuclear power plant in Illinois to review the circumstances surrounding the failure of a transformer and a subsequent manual shutdown of the reactor on Dec. 9.

* Saudi Arabia is getting ready to initiate nuclear pact talks with the U.S. within weeks, as the kingdom looks to add 17.6 GW of nuclear capacity by 2032 with the help of American firms, Reuters reported, citing Saudi Arabia's Energy Minister Khalid al-Falih.

* CO2 emissions from the U.S. transportation sector reached 1,893 million metric tons from October 2015 through September 2016, exceeding electric power sector CO2 emissions of 1,803 million metric tons over the same time period, according to a report from the U.S. Energy Information Administration. On a 12-month rolling total basis, CO2 emissions from the power sector are "now regularly below" transportation sector CO2 emissions for the first time since the late 1970s.

* Canada's nonhydro renewable power capacity grew by more than 8% in 2016, adding nearly 1,300 MW of solar, biomass and wind capacity, according to a report from the National Energy Board. In 2016, Canada’s electricity generation was 66% renewable, with nonhydro renewables accounting for 7.2% and hydro accounting for 58.8%.

* The U.S. Department of Energy awarded a $1.5 billion, five-year contract to a group of two contractors to clean up nuclear waste at the Los Alamos National Laboratory, The Associated Press reported. The group is known as Newport News Nuclear BWXT-Los Alamos LLC.

* Central Maine Power Co. and Emera Maine are facing a probe by the Maine Public Utilities Commission over their readiness and response to the Oct. 29 wind storm, according to The Associated Press. The PUC asked the utilities to submit a storm report within 30 days.

Natural gas/oil

* Saudi Arabia is shopping for American natural gas, a development industry observers said shows how U.S. shale gas is transforming global energy markets.

* The U.S. Bureau of Land Management is seeking public input on the analysis of 25 parcels across Kansas, Oklahoma and Texas for the June 2018 competitive oil and gas lease sale. The 30-day comment period began Dec. 20 and will end Jan. 19, 2018.

* U.S. crude oil production could reach an average of 9.9 million barrels per day in 2018, which would surpass the previous record of 9.6 million barrels per day set in 1970, according to the U.S. Energy Information Agency's latest "Short-Term Energy Outlook." The country's total crude oil production is expected to average 9.3 MMbbl/d in 2017, up 0.5 MMbbl/d from 2016.

* The Washington Energy Facility Site Evaluation Council has recommended that Gov. Jay Inslee reject Vancouver Energy LLC's permit application for the Tesoro-Savage crude-by-rail uploading and marine loading project at the Port of Vancouver, Wash. The project is joint venture between Tesoro Corp. subsidiary Tesoro Refining and Marketing Co. and Savage Cos.

* U.S. natural gas producers have less of their production volumes hedged for the coming year than they did near the end of 2016, but S&P Global Ratings said they could pick up the pace. Only 38% of gas production expected in 2018 by all the companies in S&P Global Ratings' universe is hedged, compared to 47% of gas production for 2017.

* Royal Dutch Shell plc and Eni SpA on March 5 will face a trial in Italy over "corruption charges" related to a $1.3 billion deal to secure a Nigerian offshore oil block known as OPL 245 in 2011, The New York Times reported.

* Restore Oklahoma Now Inc., a group led by oil and gas industry leader Mickey Thompson, is seeking a public vote in November 2018 with a goal of restoring a 7% tax rate on oil and natural gas production in Oklahoma, which will generate about $333 million in the upcoming fiscal year, The Associated Press reported.

* PetroQuest Energy Inc. marked its entry into central Louisiana oil play with agreements to acquire interests in about 24,600 gross acres in the play.


* Firmer natural gas prices through most of 2017 helped coal generators to clear surplus inventories and operate at closer to normal levels. Through October, Henry Hub spot prices ranged from $2.90/MMBtu to $3.20/MMBtu, creating a correspondingly stable range for spot coal prices.

* Global demand for coal is forecast to remain nearly flat between 2017 and 2022, with coal's share of the power mix declining to just below 36% by 2022, according to the International Energy Agency's annual coal market report. By 2022, global coal demand is expected to reach 5,530 million tonnes of coal equivalent, the same as the average of the last five-year period, the report said.

* Armstrong Energy Inc. affiliates have given notice for 526 layoffs at western Kentucky coal mines. Armstrong Coal Co. gave notice to 427 employees based at its Kronos Mine, Lewis Creek Surface Mine, and various preparation plants, docks and other facilities, according to a federal Worker Adjustment and Retraining Notification Act letter dated Dec. 13.

* Ohio regulators approved construction authorization from the state Rail Development Commission directing CSX Transportation Inc., Kanawha River Railroad and Norfolk Southern Railway to upgrade certain rail crossings in Montgomery and Perry counties.


* The natural gas inventory report to be released at 10:30 a.m. ET on Dec. 21 by the U.S. Energy Information Administration is expected to show a triple-digit pull for the week ended Dec. 15, as colder weather in many major consuming regions likely drove demand higher.

* Following a 5.5-cent decline in the prior session to settle at $2.637/MMBtu, NYMEX January 2018 natural gas futures attempted but failed to hold gains overnight ahead of the Thursday, Dec. 21, open and the midmorning release of the weekly storage data that is poised to show the first triple-digit pull of the season.

* Power prices at the daily markets could be aimed lower at most markets Thursday, Dec. 21, amid predominantly weaker demand outlooks for the close of the workweek. Traders will also keep attuned to natural gas market activity for power price direction.

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New from RRA

* A look at the impacts on U.S. gas and electric utilities and independent power producers from sweeping changes to the U.S. tax code approved by Congress.


"For 4 decades, US energy policy has obsessed over dependence on Mideast oil. Now Aramco is looking to invest in US supply & import US gas," Jason Bordoff, founding director of Columbia University's Center on Global Energy Policy, commenting on reports that Saudi Arabia is shopping for natural gas from the U.S.

The day ahead

* The EIA natural gas storage report is 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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