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EIA expects natural gas will drive down electricity prices across US in 2019

The U.S. Energy Information Administration is forecasting that lower natural gas costs will drive annual average wholesale electricity prices for 2019 across the entire United States below electricity prices of 2018.

Texas Railroad Commission rejects 1st-ever challenge to gas flaring permit

Reasoning that the value of the crude oil coming from a producing well outweighs the lower value of the associated gas that must be removed, the Texas Railroad Commission approved on Aug. 6 a small producer's application to continue flaring gas from a set of Eagle Ford Shale wells, despite objections from the midstream company that gathers gas in the same field.

Growth in electric-fracking fleets stunted by tight producer budgets

Oilfield services companies are considering whether spending to convert legacy hydraulic-fracturing fleets to run on electricity makes good financial sense as producers slowly embrace the technology.

EIA increases 2019 coal output, export estimates from July outlook in new report

The U.S. Energy Information Administration presented a slightly improved outlook for the U.S. coal industry through the end of the year after increasing its expectations for the sector's 2019 production and export totals from its July estimate.

Quoted

"The Marcellus is capable of a tremendous amount more volume from us, and we just worry that if we overrun the in-basin markets, we would see prices collapse in a hurry," said Robert Douglas Lawler, president, CEO and director of Chesapeake Energy Corp., on the company's efforts to balance its natural gas supply with market demand.

Power

* An ISO New England program to pay resources that keep fuel or another form of potential energy on hand during the winter will go into effect by operation of law because the Federal Energy Regulatory Commission lacked a quorum to act on the grid operator's proposal.

* The U.S. Chamber of Commerce wants to intervene on behalf of the U.S. Environmental Protection Agency to defend the agency's new rule to ease limits on power plant emissions, according to Bloomberg News.

* Pattern Energy Group Inc. CEO Michael Garland said the company is steering clear of solar acquisitions in the U.S., noting that concerns about low investment returns outweigh the benefits that could come from diversifying the company's portfolio of wind farms.

* Maine regulators will first decide on Central Maine Power Co.'s metering and billing case in December, before taking action on the utility's proposed rate increase request.

* Separately, NextEra Energy Resources LLC said the Maine Public Utilities Commission's approval of Central Maine Power's $1 billion transmission line project was "replete with errors," according to The Associated Press.

* Duke Energy Corp. executives told analysts and investors Aug. 6 that they will weigh potential strategic acquisitions but are focused on organic growth opportunities in electric and gas infrastructure as well as renewables through the company's $37 billion five-year capital plan.

* Coal ash pollution from three Louisville Gas and Electric Co. power plants could be illegally contaminating groundwater flowing into the Ohio River and Herrington Lake, according to WFPL.

Natural gas

* Texas Eastern Transmission LP will continue restricting natural gas flows through a portion of its pipeline system for at least another week following a deadly Aug. 1 explosion along the line in Lincoln County, Kentucky.

* Oil and gas drillers PDC Energy Inc. and SRC Energy Inc. are said to be in discussions to combine their operations in a potential merger, Bloomberg News reported, citing people familiar with the matter.

* New Jersey Resources Corp. said most of its capital spending on the PennEast Pipeline Co. LLC system will now occur in 2021, signaling that the project to transport natural gas from Marcellus Shale fields to eastern Pennsylvania and New Jersey will not come online until that year.

* Bolstered by a judge's criticism of the FERC, landowners plan to ask the full U.S. Appeals Court for the District of Columbia Circuit to examine whether current FERC practices deprive property owners of a fair process in natural gas pipeline cases.

Oil

* The U.S. Energy Information Administration lowered its crude oil price outlook through 2020 on the heels of the latest salvos in a trade war between the U.S. and China.

* The U.S. House Committee on Energy and Commerce has asked the Government Accountability Office to investigate the Trump administration's decision to roll back offshore drilling regulations.

* Continental Resources Inc. expects to reach the high end of its free cash flow range while increasing production in the second half of 2019, a company official said Aug. 6.

* Halcón Resources Corp. and its subsidiaries filed voluntary petitions for relief under Chapter 11 to pursue a prepackaged plan of reorganization.

* Occidental Petroleum Corp. sold $13 billion of debt to help fund its proposed acquisition of Anadarko Petroleum Corp., Bloomberg News reported, citing people familiar with the matter.

* Abu Dhabi National Oil Co. has agreed to acquire a 10% equity stake in storage terminal owner and operator VTTI BV.

* State-controlled oil company Petróleo Brasileiro SA may be exploring the possibility of forming a subsidiary comprised of power plants and sell it through an initial public offering, Reuters reported.

Coal

* Consol Energy Inc.'s focus on booking long-term coal sales to a diverse customer base is paying off as fluctuating commodity prices have made only a modest impact on the company's 2019 performance so far, executives said on an Aug. 6 earnings call.

* Blackjewel LLC secured approval from a federal judge to sell its coal mines to Contura Energy Inc., despite objections from its creditors, the Casper (Wyo.) Star-Tribune reported.

* Hallador Energy Co.'s CEO touted the company's contracted tonnage over the next few years and the stability of its customer base on an Aug. 6 earnings call.

* Vietnam is looking at buying U.S. coal for power generation, according to Reuters.

* Australia's Stanmore Coal Ltd. received an unsolicited, non-binding, indicative proposal for a takeover of the company by Winfield Group Investments Pty Ltd.

ChartWatch

Cimarex Energy Co. expects to grow its 2019 oil production by 23% to 29% compared with 2018's crude output, with the bulk of the production growth coming from the Permian Basin, company executives said Aug. 6.

New from RRA

* The overall average authorized gas return on equity edged up slightly in cases decided during the first half of 2019 to 9.63%, from the 9.59% observed for cases decided during 2018 in the U.S. Even so, the average is still hovering around the lowest levels witnessed in the industry and with the recent, albeit highly anticipated, rate cut by the U.S. Federal Reserve, the first since 2008, lower authorized returns may be on the horizon.

The day ahead

* The U.S. Energy Information Administration petroleum status 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.

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.

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