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Wednesday, August 26, 2009

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TVA Plant Could Stimulate Tennessee Gas Exploration
Monday, August 24th, 2009, by Blake Farmer
A new TVA power plant in upper East Tennessee could spur natural gas exploration on the Cumberland Plateau. The Rogersville plant needs 10 times the natural gas produced in the state right now, and TVA is trying to help ramp up drilling.

Because of the potential held in a gas formation called the Chattanooga shale, TVA’s Blake Baxter says he believes local producers could supply the plant if they had financing for exploratory drilling. Baxter says TVA’s commitment to purchase the gas could open banks to lending.

“If I’m willing to go out to this producers and say I’ll give you a long term contract, they should be able to take that to a bank and say ‘here, TVA has agreed to enter into a long term contract with me. Please give me my financing.’”

The Tennessee Oil and Gas Association says drilling occurs in just 11 counties, primarily on the plateau, but there’s reason to believe most of Middle and East Tennessee have potential for gas production.

TVA’s other gas plants, which are used when demand for electricity is high, are almost all along the Mississippi River and rely on natural gas piped in from Texas and Louisiana. Those pipelines don’t run to the Rogersville site in East Tennessee.

The Rogersville plant should come online in late 2011. TVA is building the plant in response to a lawsuit from the state of North Carolina over smokestack emissions from coal plants.



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