2013: a look ahead

Thursday, January 3, 2013

With the new year upon us, here is a preview of several energy-related issues and events we will likely see this year:

Expansion of natural gas production, transmission and distribution.  The spread of hydraulic fracturing or fracking as a technique to produce natural gas from previously-uneconomic sources appears to be the largest revolution in the U.S. energy landscape in decades.  Natural gas will continue to displace coal and oil as an energy source in 2013, particularly for the generation of electricity.  The availability of cheap natural gas will also lead to the development of more local distribution company pipelines, enabling more businesses and homes to connect to natural gas supplies.  2013 will likely also bring proposed new natural gas transmission pipelines, connecting gas sources like the Marcellus and Utica shale fields to consumers across the country.
Offshore wind in U.S. waters.  2013 may see the construction of the first offshore wind projects in United States waters.  Cape Wind's project off Massachusetts may start cable work or other construction this year, as may Deepwater Wind's Block Island project off Rhode Island and Fishermen’s Energy's project off Atlantic City, New Jersey.  Congress's last-minute extension of the Investment Tax Credit or ITC gives a significant boost to offshore wind projects capable of beginning construction in 2013.  Not only was the tax credit's deadline extended by one year, but Congress also changed the trigger from being "placed in service" to commencing construction by December 31, 2013.  No offshore wind projects are currently operating or under construction in U.S. waters, so 2013 could be the year the first projects enter the water.  The federal Bureau of Ocean Energy Management is expected to continue its leasing program, making more ocean sites available for future offshore wind projects.

Keystone XL pipeline.  The Keystone XL pipeline, a $7 billion proposed extension of an existing crude oil pipeline, is slated to connect Alberta, Canada to Texas.  In 2011 and 2012, the project faced public scrutiny and failed to secure necessary federal and state approvals.  Among other permits, the project faces State Department review because it would enable imports or exports of oil across the national border with Canada.  Meanwhile, project lead TransCanada is moving ahead with the construction of some of the domestic legs of the project, and the full project is likely to come back up for review this year.

Energy efficiency continues to grow.  Investments in energy efficiency are likely to continue to grow in 2013.  Using fuels and energy sources more efficiently saves money for businesses and homeowners capable of making the investment.  It can also lower market prices for electricity and fuels by reducing demand, spreading the savings across all consumers.  New England regional electric grid operator ISO New England recently revised its load forecast to predict no increases in the demand for electricity through 2021 as a result of increased investment in energy efficiency.  This trend is likely to continue nationwide.

With 362 days left in the year, these issues and events are likely to be discussed for some time to come.  Will these predictions come true in 2013? 

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