Transformation Underway in U.S. Natural Gas Industry, Finds Black & Veatch Report

OVERLAND PARK, Kan., Oct. 28, 2014 (GLOBE NEWSWIRE) -- Black & Veatch released its third annual Strategic Directions: U.S. Natural Gas Industry report today illustrating dramatic changes taking place throughout the domestic natural gas industry. In contrast to the 2013 report, cautious optimism has been replaced by heightened activity. Highlighting the changing sentiment, nearly 90 percent of industry respondents expect electric power generation to undergo material gas consumption increases by 2020.

"What a difference a year makes," said John Chevrette, president of Black & Veatch's management consulting business. "One year ago the mood across the natural gas value chain was one of cautious optimism. The 2014 Strategic Directions: U.S. Natural Gas Industry report today reflects a marketplace surging with activity, driven in large part by low-cost shale gas. The strong demand for U.S. natural gas resources can help foster a new era of energy independence. Yet, it also requires industry and regulators to work together to ensure a sustainable path forward."

The report finds that demand from power generators, exports and the transportation / natural gas vehicle sectors is expected to rise for the foreseeable future. Local distribution companies (LDCs) are seeking ways to secure low-cost gas from sources located closer to their markets. Abundant supplies are encouraging capital flows to develop much needed pipeline infrastructure.

Safety remains the number one long-term industry concern, while gas supply reliability and economic growth followed among the top 10 issues of concern. Yet, many challenges remain for the industry. More than 72 percent of midstream respondents identified delays from opposition groups as the dominant challenge to new pipeline development.

Other key findings include:

  • Electric power pricing is increasingly tied to natural gas prices as it becomes the primary fuel for generation. 74 percent of respondents cited the growth in natural gas for power generation as a key driver of future North American natural gas price rises.
  • U.S. LNG exports will net both short- and long-term benefits to the country's economy. Increased shale gas production, increases in the U.S. natural gas price, and an increase in the U.S. economic benefit over the long term were cited as the top three potential outcomes of U.S. LNG exports.
  • Progress has been made across the industry's physical and cyber security programs. 80 percent of respondents noted the integration of cybersecurity and IT, up from 60 percent in 2013.
  • More than 31 percent of LDC respondents indicated the levels of system operation and maintenance costs had increased by more than 10 percent since 2013.

The full Black & Veatch report is available as a free download at www.bv.com/reports.

Editor's Notes:

  • Black & Veatch conducted its third annual survey from July 23, 2014 through August 25, 2014. 447 qualified natural gas industry participants completed the survey. Statistical significance testing was completed with a 95 percent confidence level.
  • The 2014 Report includes projections from the Black & Veatch Energy Market Perspective and insights on the role of natural gas in China, India and the marine and rail transportation sectors.
  • The Black & Veatch U.S. Natural Gas Industry report is part of the company's Strategic Directions series that includes in-depth analysis of the electric, water, natural gas and utility telecommunications industries.

About Black & Veatch

Black & Veatch is an employee-owned, global leader in building Critical Human Infrastructure™ in Energy, Water, Telecommunications and Government Services. Since 1915, we have helped our clients improve the lives of people in over 100 countries through consulting, engineering, construction, operations and program management. Our revenues in 2013 were US$3.6 billion. Follow us on www.bv.com and in social media.

CONTACT: Black & Veatch Patrick MacElroy + 1 212-973-1339 P + 1 516-477-0914 m macelroyp@bv.com 24-HOUR MEDIA HOTLINE +1 866 496 9149

Source:Black & Veatch Holding Company

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