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From left, Mark James of American Electric Power and Jack Lewnard of Chesapeake Utilities Corp. discuss utilities’ needs at the Marcellus-Utica Midstream Conference. Source: Hart Energy
That friend request awaiting your response won’t be found on any social media site—it’s a sincere expression of mutual interest from a utility sector eager to work with the midstream.
“We have seen 30% growth in industrial sales in those counties that serve your industry,” said Mark James, vice president of economic and business development at Columbus, Ohio-based American Electric Power, describing areas in the Marcellus, Utica, Eagle Ford, Permian and Cline shale plays, among others. “Compare that to the rest of our system, which has seen 1% growth in industrial sales.”
James told attendees at Hart Energy’s Marcellus-Utica Midstream Conference that his company relies on natural gas for 23% of its power generation capacity and sees that share growing to 28% in the next few years, although there are no plans to abandon coal, which accounts for 66%.
“We have designed transformers that we drag onto your sites to serve temporarily until we build [infrastructure] for you,” he said. “The electric industry has certainly responded to the needs of the shale gas industry.”
Jack Lewnard, vice president for business development at Dover, Del.-based Chesapeake Utilities Corp., joined James onstage for the discussion and cited benefits of partnerships between utilities and players across the energy value chain.
“We’re looking to leverage our expertise in managing pipes, permitting, compression to both upstream and downstream,” he said. “You see utilities taking positions in gathering here in the Marcellus and also in the Utica, investing in some of the infrastructure that’s necessary and hopefully freeing up some of the capital for the producer companies that can then focus on drilling and let the unregulated subsidiaries manage some of the gathering buildout.
“At the end of the day, your product is our product,” he said, “so we have a mutual interest to succeed.”
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