Replacement

While most of the country is enjoying the benefits that low cost North American supplies of natural gas bring to local and regional economies, many parts of the Northeast US and Atlantic Canada are still heavily reliant on expensive oil-based products for residential, commercial and industrial use. That is in spite of the proximity of burgeoning supplies of natural gas in the Marcellus and Utica shale basins. The challenge in converting users away from oil lies in infrastructure build out and deciding who will pay. Today we begin a two part series on the slow conversion process and new solutions to supply natural gas to customers before pipeline infrastructure is built.

Reversing the direction of flow on the eastern third of the Rockies Express (REX) pipeline would have a profound effect on natural gas markets throughout the industrial Midwest and the Midsouth. Not only would the plan significantly expand the regions’ access to gas from the Utica and western Marcellus shale plays, it would further erode the market shares held by traditional suppliers to those regions.   In this Part 3 of our series on the REX reversal we examine how moving large volumes of now-constrained gas west from southwestern Pennsylvania, Ohio and West Virginia would fundamentally change regional gas flow patterns, basis relationships, and even the operations of many pipelines.