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Black & Veatch reports a positive natural gas outlook

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LNG Industry,

Despite changing commodity pricing expectations, a new Black & Veatch report has found that natural gas business leaders in the US are optimistic about the gas industry’s future. The 2015 Strategic Directions: US Natural Gas Industry report discusses the growing supply of gas, the plateau in demand and the consequences of the drop in oil prices.

John Chevrette, the President of Black & Veatch’s management consulting business, said: “Over the past year, falling commodity prices have changed the natural gas landscape even as demand forecasts remained positive […] Across the value chain this creates opportunities to develop strategies for sustainability and to boost growth in the low price environment.”

The report also shows that the US Clean Power Plan (CPP) has created concern amongst industry leaders because of its emphasis on both renewable energy and limits on CO2 emissions. However, it also demonstrates that new CO2 regulations are believed to have a positive impact on the gas industry.

Dean Oskvig, the President of Black & Veatch’s energy business, said: “The current natural gas market reflects the decoupling of the mid and downstream sectors from the more price sensitive production side.

“Yet, over the long term, firms across the spectrum that embrace operational efficiency and seek out new markets will survive these challenging times.”

The major findings of the report include:

  • Over 80% of the industry sees the North American natural gas industry outlook as positive.
  • 85% expect to see gas consumption for fuel generation to increase.
  • Almost 75% see the regulations on CO2 emissions as positive for the gas industry.
  • 82% felt that regulatory uncertainty was the major concern – in the medium term – for pipelines.
  • Six out of 10 local distribution companies are either planning to expand natural gas programmes, or have already launched them.
  • Two out of three of these local distributed companies view distributed energy resources that are powered by natural gas as an opportunity for growth in the future.

Edited from various sources by David Rowlands

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