ConocoPhillips Launches U.S. Natural Gas Campaign
ConocoPhillips has launched a nationwide campaign in the U.S. in an effort to convince policymakers and consumers that natural gas production can provide low-cost energy and high-paying jobs. The company’s new website, powerincooperation.com, discusses the benefits of natural gas and the company plans to begin digital and television advertising next month.
At the Detroit Economic Club, ConocoPhillips CEO James Mulva announced the “Power in Cooperation” campaign as a fix for the United States’ failing economy. With natural gas prices remaining relatively low, the profitability of the hydrocarbon energy source is in question. ConocoPhillips, like other producers, is hoping that advertising will help boost interest in natural gas. "The price of natural gas does not support continued drilling exclusively for natural gas, although we retain the acreage and the opportunity to drill and add to future supply in the coming years," Mulva said in an interview.
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"We're very supportive of natural gas. We just have an oversupply," he added. "We're bullish over the long term."
Mulva predicts that as the U.S. economy works to correct itself, and energy companies turn more and more to natural gas to run generators, the price may reach a viable level for ramped up production. "As a result of that, we will see a somewhat better price than we see today," Mulva stated. "And as it starts to move toward $5 … we have an opportunity as a company and as an industry to add substantially to the supply, which will result in a very moderate cost for natural gas."
Unlike other oil and gas producers like ExxonMobil, who have relished in various ad campaigns, including shale natural gas, ConocoPhillips has traditionally kept a much lower profile. However, the company feels the time to reach out to the public is now. "We think that's good for our country and we also think that's good for our company," said Mulva.
The ConocoPhillips natural gas campaign will work to overturn some of the public fears in regard to the hydraulic fracturing drilling technique. Many claim the water-intensive process can pollute groundwater supplies with the various toxic chemicals used to crack shale rock formations deep underground. However, the first comprehensive study of shale gas wells released by Duke University earlier this summer has shown that the only detectable abnormality in groundwater near shale drilling sites is a high methane level. This is good news to the natural gas industry for two reasons: 1) water in areas rich in natural gas is expected to have higher methane levels; 2) the methane can be extracted from groundwater with moderate investment.
According to Mulva, "To address the public's concerns, our industry must follow good practices," Mulva told the audience in Detroit. "And we must de-mystify fracturing. We need to directly address the public's perception on natural gas and hydraulic fracturing as companies and as an industry. We need to speak more directly to the public's perceptions. We have work to do. We're going to have to tell our story. That's never been easy for us."
Ofwat allows retailers to raise prices from April
Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.
The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.
Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.
In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue.
Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”
There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:
- Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps.
- Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold.
- Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice.
Further consultation on the proposed adjustments to REC price caps can be expected by December.
"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.
"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."
United Utilities picks up pipeline award
A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.
The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.
“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.
Camus Energy secures $16m funding
Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent Ventures, Wave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.
As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.