Natural gas industry tempers its optimism, Black & Veatch survey finds | The Kansas City Star

Natural gas users and suppliers, awash in low-cost supplies, remain bullish on the North American natural gas industry growing in the next five years. They just aren’t as wildly optimistic as they were a year ago.

That’s the conclusion of Black & Veatch’s fourth annual survey of the industry, including producers, processors, pipeline and storage companies, utilities, and industrial users.

Nearly 82 percent of the 404 respondents to the survey, conducted in July and August, were optimistic or very optimistic, compared with nearly 93 percent a year ago and even higher percentages the first two years of the survey.

“In the short term, oil and natural gas producers will face increased competition and decreased profits,” said the summary of the survey by Black & Veatch, the Kansas City area’s largest engineering firm.

SIGN UP

The continued low gas prices have threatened some companies, especially those carrying high debt, and led to cutbacks in the number of oil and gas drilling rigs in shale country, the report noted. But production remains high as the most productive rigs remain in service.

Some other opinions of survey respondents:

▪ The move to replace coal-fired electricity generating plants with cleaner alternatives should continue to help the industry. The two most positive regulatory movements for the industry, respondents said, are reduction of carbon dioxide emissions from existing U.S. power plants and limits on those emissions from new plants.

They also rated U.S. initiatives and incentives to reduce carbon-intensive fuels and other countries’ national commitments to reduce greenhouse gas emissions as positives for the natural gas industry.

▪ The demand from utilities that low gas prices and tighter environmental regulations produce is expected to continue. Another growth driver is expected to be the increased ability to export more gas as liquefied natural gas facilities are built. Two-thirds of respondents saw electricity generators and gas exports as the top growth markets for pipeline companies in the next three to five years.

▪ The two biggest barriers to adding new pipeline capacity are delays from opposition groups and regulatory uncertainty. Other top concerns in the pipeline part of the industry, after regulatory uncertainty, were sustaining the growth in demand for gas, and the pipeline system’s safety and integrity.