The energy industry is facing potentially transformative changes from several important recent developments:
- A potential 30 percent increase in demand for U.S. natural gas, triggered by large-scale increases in U.S. domestic use and exports
- Massive coal-plant retirements due to implementation of Clean Air Act regulations promulgated in 2011 and 2012
- The potential for an even more severe wave of retirements due to the Obama Administration's Climate Action Plan, which proposes to restrict power plant CO2 emissions for the first time
These factors have led some analysts to predict that U.S. natural gas prices could double, driving up valuations in the natural gas industry, increasing electricity prices by as much as $20-40/MWH and sharply increasing margins for wind, solar and other renewable energy resources.
The operation of the interstate electricity grid and the natural gas transportation network could also be profoundly altered, permanently changing power flows, creating new congested nodes, sharply increasing dark spreads at surviving coal-fired plants and causing basis differentials at some natural gas trading hubs to explode.
Our Executive Briefing considered the important questions raised by these developments, including:
- What are the implications for investment decisions made before the dust has settled?
- What do these far-reaching changes mean for generation and transmission owners, natural gas producers and pipelines, alternative investors, institutional lenders and renewable energy?
- Where are the best opportunities? Who is most at risk? What mistakes must be avoided?
How can your firm maximize its upside potential and reduce risks?
For more information contact:
Gilbert D. Porter, Partner, Haynes and Boone, LLP
Andrew D. Weissman, Senior Energy Advisor, Haynes and Boone, LLP