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September 19, 2011

Energy Data Highlights

Crude oil futures price 9/15/2011: $89.40/bbl up$0.35 from week earlier up$13.38 from year earlier Natural gas futures price 9/15/2011: $3.878/mmBtu down$0.102 from week earlier down$0.122 from year earlier Weekly coal production 9/10/2011: 20.694 million tons down0.292 million tons from week earlier down0.380 million tons from year earlier Natural gas inventories 9/9/2011: 3,112 Bcf up87 Bcf from week earlier down140 Bcf from year earlier Crude oil inventories 9/9/2011: 346.4 mmbbl down6.7 mmbbl from week earlier down11.0 mmbbl from year earlier http://www.eia.gov/ Natural Gas/ Power News EIA Storage Release 9/1/11 (Actual): +87 Bcf Previous Week: +64 Bcf -4.3% Change from 1 Year Ago -1.6% Change 5-year Average

US gas demand to rise 3.5 Bcf/d by 2014 due to EPA rules: analyst US gas demand could rise as much as 3.5 Bcf/d by 2014 should new regulations from the Environmental Protection Agency go into effect starting next year as coal-fired generators bring their operations into compliance with the new regime, a BNP Paribas analyst's report stated Friday. Given that some federal regulations are likely to get shot down or, at the very least, delayed, BNP's Teri Viswanath projects gas demand to increase 1.5 Bcf/d next year, followed by an increase of between 1.5 Bcf/d and 2 Bcf/d in 2014. Two rules that should prove particularly onerous to the US coal fleet are the proposed Power Plants Mercury and Air Toxics Standards and the controversial, recently finalized, Cross-State Air Pollution rules because of their "required investment in control equipment and shortened compliance time frame," Viswanath stated. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/6487334 High Point unit to buy gas pipeline assets from Southern Natural Gas High Point Gas Transmission has agreed to buy about 621 miles of onshore and offshore natural gas pipeline assets in Louisiana from Southern Natural Gas, it said Friday in a statement. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/6484608

MISO resource adequacy plan meets a slew of protests at US FERC As the Midwest Independent Transmission System Operator seeks approval of its resource adequacy plan from federal energy regulators, the proposal faces a slew of protests over a proposed forward capacity market and issues of state jurisdiction. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/ElectricPower/6487412 LNG Price Boom Seen as Japan Vies With China While Exxons Shipments Grow Liquefied natural gas prices are surging to a three-year high as demand from Japan, China and India outpaces supply increases, boosting sales for producers from BG Group Plc (BG/) to Exxon Mobil Corp. (XOM) http://www.bloomberg.com/news/2011-09-19/lng-price-boom-seen-as-japan-vieswith-china-while-exxon-s-shipments-grow.html

Tighter LNG could see spot Europe gas close on oil link: analysts A tighter global LNG market could see spot European gas prices move closer towards the price of oil-indexed gas sold under long-term contracts, analysts at JP Morgan Cazenove said in a note Friday. "We have updated our global LNG model for latest import numbers, which confirm our view that supply is likely to tighten as soon as this winter, pushing spot gas prices closer to long term oil-indexed prices," the analysts said. Global LNG imports over the past four months have "surprised us on the upside," the analysts said, with total imports to India, China, Japan, South Korea, Italy and the UK some 1.8% above expectations during AprilJuly. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8350281 Ukraine to use gas pipelines to send shale gas to Europe: Boyko Ukraine will use its natural gas pipeline to start exports of shale gas and methane to the European Union within the next seven to 10 years, Energy and Coal Industry Minister Yuriy Boyko said. His comments, in a weekend interview with Inter television, contrasted with earlier remarks from Prime Minister Mykola Azarov who suggested Ukraine may be forced to dismantle its gas pipelines if Russia keeps building Europe-bound pipelines bypassing Ukraine. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8354870 Bulgaria May Import Natural Gas from Greece as of 2013 "Bulgaria may start importing natural gas from Greece from 2013. The road map of the gas link with Greece envisions that the gas supply system will be ready at the beginning of 2014. The regular gas supplies are scheduled for the summer of 2014," Bulgaria's Minister of Economy and Energy Traicho Traikov stated in the National Assembly. "The ambition of the team working on the project is that the first gas supplies for Bulgaria start in 2013," Minister Traykov added. http://www.energia.gr/article_en.asp?art_id=24931

Green/ Alternative Energy News

China helps, but solar prices sink slowly in the West The price of solar panels has plunged in recent years. But the price of a complete home solar system hasnt kept pace. http://fuelfix.com/blog/2011/09/19/china-helps-but-solar-prices-sink-slowly-in-thewest/

Crude Oil News

OPEC Daily Basket Price 9/16/2011 $110.69 (9/15/2011 $109.58) Recent Rig Counts Last Count Change Cou from Prior nt Count 27 -13 Date of Prior Count 9 Sept 11 9 Sept 11 Change Date of from Last Last Year's Year Count +324 +169 16 Sept 10 16 Sept 10

Area U.S. Canada

16 Sept 1985 11 16 Sept 502 11

Internatio nal

August 1183 2011

+33

July 2011

+81

August 2010

http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm

OIL FUTURES: Crude Falls On Europe Debt Problems, Weaker Euro Crude-oil futures traded lower in Asia Monday, tracking declines in regional equity markets, as prices were pressured by concerns over the lack of progress in resolving Europe's debt problems as well as a weaker euro. On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded 1.6% lower at $86.58 a barrel at 0647 GMT, down $1.38 in the Globex electronic session. November Brent crude on London's ICE Futures exchange fell 0.9% or $0.97 to $111.25 a barrel. "It's pretty much the same factors [at play in the oil markets currently]," Barclays Capital analyst Chen Xingyi said. http://online.wsj.com/article/BT-CO-20110919-701136.html? mod=rss_Commodities Crude Drops to One-Week Low as OPEC Signals Oil-Demand Growth Is Slowing Oil fell to a one-week low in New York on speculation fuel demand will falter as economic growth in the U.S. weakens and the debt crisis in Europe worsens. Brent oils premium to U.S. futures widened. Crude dropped as much as 1.8 percent after European finance ministers ruled out using stimulus measures to spur the economy. OPEC Secretary-General Abdalla ElBadri said today that global demand for oil is rising less than expected. Reports this week may show U.S. home sales held near the lowest this year and construction fell. Government data last week showed U.S. fuel use shrank. http://www.bloomberg.com/news/2011-09-18/crude-oil-drops-for-a-second-day-innew-york-trading-slides-one-percent.html Oil Falls More Than $1 on Debt Concerns, Dollar Brent crude oil slipped below $112 a barrel on Monday as Europe stumbled over attempts to solve the euro zone debt crisis, strengthening investor fears commodity demand growth may slow "Financial markets want a precise and clear plan on how to deal with the European debt crisis, but they are not getting it," said Christophe Barret, global head of oil research at French bank Credit Agricole. "The economic backdrop is weak." http://www.cnbc.com/id/44572050 Oil Sentiment Split as Euro Woes Overshadow Stimulus Hopes: Survey Oil market sentiment is split this week as investors balance headline risk over the escalating debt crisis in Europe with expectations of further stimulus efforts from the U.S. Federal Reserve, CNBC's weekly survey showed"One of the many problems in Europe is that there is one monetary policy and 17 fiscal policies, which make it tremendously difficult to keep any consistent and cohesive growth," said Andre Julian, CFO, OpVest Wealth Management. "Although steps continue to be made, it is difficult to get commitment from market participants until a clearly outlined plan is forged and implemented." On balance, the main supportive theme for oil this week, argues Julian, "may be a resounding support of 'Operation Twist' or some other variation of stimulus by the U.S. Fed during their two-day FOMC

meeting." http://www.cnbc.com/id/44574366 Platts Changes Brent Formula Platts, the oil-pricing service, has unveiled a significant revision to the way it assesses the Brent pricing benchmark, angering traders who say the change is being pushed through too quickly. As much as 70% of the world's physical crude is priced off the benchmark, called Dated Brent by traders. It also underpins the futures market, which companies use to hedge oil-price risks and investors use to bet on the future price of oil. http://online.wsj.com/article/SB1000142405311190392720457657450177054783 0.html?mod=WSJ_Commodities_LEFTTopNews

Houstonians protest pipeline plan With a Valero refinery in the background, environmental activists gathered in Hartmann Park in east Houston Sunday to protest the Keystone XL pipeline, which they say will lead to more pollution in smog-filled Houston. http://fuelfix.com/blog/2011/09/19/houstonians-protest-pipeline-plan/ OPEC Head Sees Gulf Output Cut On Libya Return Gulf oil producers, already facing a weakening demand picture in 2011 and 2012, are expected to cut their output once Libya resumes production, the Organization of the Petroleum Exporting Countries' top official said Monday. OPEC Secretary General Abdalla Salem el-Badri, a Libyan, told a forum that Libya could reach preunrest production levels within 15 months, as few key facilities were damaged, and said he expects Saudi Arabia and other Gulf countries to cut output once Libya's production recovers, although he hasn't had confirmation of that from the individual producers. http://online.wsj.com/article/SB1000142405311190419460457658019145841909 6.html?mod=googlenews_wsj Analysis: Conoco spill heightens scrutiny of offshore China China is clamping down on offshore oil drillers after a spill by U.S. firm ConocoPhillips in Bohai Bay, requiring tighter controls in a campaign to beef up environmental protection standards ordered by Premier Wen Jiabao. http://www.reuters.com/article/2011/09/19/us-china-conoco-spillidUSTRE78I18Z20110919

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