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Search Tickers. MarketWatch Dow Jones. ET by MarketWatch Automation. No Headlines Available. Other News Press Releases. KMI vs. ET on Zacks. ET on Motley Fool. ET on GuruFocus. Beaumont Asset Management, L. ET on WallSt. Chrome Safari Firefox Edge. Enbridge Inc. Enterprise Products Partners L. TC Energy Corp. That requires high-pressure, special purpose pipe, which we have. That's not something that you can achieve with a repurposed oil or gas pipe.
Now we've looked at this, and we think it is -- and for certain applications, particularly smaller volumes, shorter distances, there are potentially some repurpose opportunities. I think the breakeven cutoff there is like a day or less in order to make that more attractive.
But otherwise, you need some specialized facilities to move it efficiently and to inject it into the ground. And so we think we've got an advantage in that. We got to get the permitting shortened up and we got to get customers who are nearby our infrastructure in the boat if you will.
But it's not a tomorrow thing. It's probably not a next year thing. It's something that's going to take a little bit of time to develop, but we are in active conversations. No, I appreciate the color there, Steve.
Maybe just for a follow-up question. Given the challenges with securing natural gas by many customers during which [Inaudible] during the first quarter. You've got higher gas prices right now as well also. Are you seeing interested or actual contracting activity around your system, say in Haynesville, or any of your pipeline and storage assets more broadly, where we can see some potential growth, where you sort of take this spot environment that's pretty juicy right now and sort of convert it to some longer-term contracts?
We have signed up some incremental business in Texas, and we have also been able to, particularly on our flexible storage, we have seen rate increases, pretty good rate increases. Because I think everybody got a bit of a wake-up call on the underlying value of storage.
And we are working on additional incremental business. We have talked publicly with regulators and others about a project that would add additional delivery capability in the state of Texas that would help support more power and human needs, loads even outside of what is really our current more active market area.
But we think, too, that we're seeing that really across the country that as things tighten up in these markets, people are putting value, as they should, put value on firm deliverability. And let's face it, supply hasn't quite kept pace with demand, particularly as export demand has grown, power demand has come off a little bit, as Kim mentioned, but it's fairly strong.
And industrial demand is strong, residential commercial is seasonal. But the demand has outstripped supply. And the producers are working on it, but it hasn't come back as fast as it came back, for example, when we merged out of the , downturn. So, the value of deliverability, firm deliverability, as you get more intermittent resources in the generation stack, as people look at winter coming, as people look at the experience we just had, we think that that's going to be attractive, and we're seeing that in real transactions.
Hey, good afternoon, everybody. And so it seems like a lot has changed since August. So we just love refreshed thoughts on that front in terms of what you think it's going to take to kind of normalize prices here. To your point, we haven't really seen that supply response yet. What do you think that's going to take? What are producers telling you they need to see and when? And then alternatively, Kim, you mentioned that some of the power plants have taken less deliveries because of the higher pricing.
Is demand disruption is something we need to worry about at these price levels? Let's start with the first one on the gas macro, and I'll call on Tom to fill in on this here. You know, as Kim mentioned, we are starting to see some sequential improvement -- sequential quarter, Q2 to Q3, and there's been a lot more lively conversation, I think, with producers who are bringing some rigs in and starting to share some development plans.
We've had some timing shifts in the Bakken, as Kim mentioned. But generally speaking, I think it's the case that producers are responding. But again, not responding as quickly as they did in the last downturn. And as many have reported, you're seeing the publicly traded producers continue to be exceedingly disciplined about coming back in. They're enjoying the higher prices, but not responding as much out of their concern about capital discipline.
However, I think something on the order of half of the rigs in the Permian now are owned by private players. And so the supply will come back, whichever capital source drives it. This has been coming back a little bit slower. Yeah, I mean we have seen some degradation in power demand due to higher gas prices, but not as much as you would expect and certainly not what we have seen in prior years.
And a lot of that has to do with coal retirements and just the need to backfill renewable power on an intermittent basis. And so again, a slight decrease, but not significant. And we still see, as Steve said, power customers wanting to sign up for a services to firm up their gas or power capabilities on a longer-term basis. That's helpful color. Second one, just maybe getting your latest thoughts around capital spending going forward kind of on a multiyear basis.
But since then, we've seen the outlook kind of dramatically improve, especially when you consider a lot of the energy transition opportunities in front of you that Rich mentioned earlier.
And look, this is a function of kind of what -- what kind of activity there is out there. I think it is two points here. One, really big mega projects. It's no secret to anybody. Those are harder to permit and build.
But a lot -- on the other hand, a lot of the growth is on the Texas and Louisiana Gulf Coast, the growth in gas demand that we expect.
And we're just starting to hear a little bit more from Permian players about the need for another pipeline. They don't need it right now, but their time frame on when it might be needed out of the Permian has moved up a bit. And so those discussions are very advanced. It's just kind of a function of current prices in both crude, and to some extent, natural gas.
But really huge projects, I think, are probably not as likely to get done or permitted. And let me just emphasize, as Steve said so many times, that we're going to be very disciplined in this approach to spending capital, make certain that these are satisfactory returns.
And I agree with the kind of range Steve was talking about that as we've explained, we have a lot of uses for our capital, and we're going to be very judicious about how we use it.
I want to touch on carbon capture a bit more here. And just wanted to get your thoughts on how you think this can unfold. And do you think that the hub concept is really needed to kind of move forward efficiently kind of what the University of Houston and Rice and Columbia have discussed in their papers?
Or do you think that stand-alone projects on carbon capture can move forward by themselves? Well, we're exploring the stand-alone projects. I mean, we're open to discussing other larger opportunities as well.
And perhaps, given that we know how to build, own, operate CO2 pipe, perhaps participating in the transport piece. But again, for all the reasons I said before, I think there's a lot of wood to chop before we see those bigger projects come through.
Well, I agree. I think the stand-alone probably will be quicker. As you said, multiple parties would have to come together on the hub concept. Got it. That's helpful there. And then as far as it relates to what Kinder could do going forward, do you see it mostly just organic growth off your footprint? Or do you see kind of the two projects that already have commercial backing and are moving forward that are servicing ethanol production in the CO2 in the upper Midwest, is that the type of thing that Kinder could get involved with?
Or just kind of sticking to your own asset base? Again, no carbon capture here. Yes, we've looked at some. And again, I just want to emphasize, look, I think carbon capture and sequestration, if we're going to meet climate objectives over the long term, it's going to have to be part of the picture and some work is going to have to be done there.
But I'm just trying to set expectations at a rational level at how quickly we think that's likely to unfold and where we think the first projects get done. And so there's a focus on our existing network, but we have had discussions with people off the network about the potential to capture and sequester carbon. Those things are still in early stages, but they are things that we would explore if the returns were good. I wanted to go back to, Rich, your opening comments.
You referenced, potentially, I think private investors perhaps partnering with you to invest in the business. Can you just expand on that comment? Are you sort of suggesting public markets may or may not be there, so you might be looking at other sources capital? No, what I'm saying is that we think we are creating real value as we move toward critical mass in our Energy Transition Ventures group. And at some point, at the time of our choosing, when we feel we have critical mass and still have significant growth opportunities, which we think are there in the space, then I was saying that we believe and the Board believes that we would have the opportunity to partner with public or private ownership on terms that we think would be very favorable to us.
We think this is a platform that deserves and will receive a lot of investment interest when it gets to be the appropriate time. OK, got it. Totally changing gears. I wanted to ask a little bit about the EOR business. Just given the increase in oil prices, I guess, have you been able to lock in higher price hedges going forward? And are you thinking about that business any differently in terms of allocation of capital given the higher prices?
We continue to layer on favorable hedges. Last quarter, we've been able to really lift the back end of our hedge profile, so that's a positive. We are seeing some organic growth within our existing assets as prices increase. And our next question comes from Tristan Richardson from Truist Securities. Hi, good afternoon. Just a follow-up on gas storage comments and your commentary there on positive signs of renewals. Could you just generally frame up for us where contracted capacity is today or relative to nameplate, or capacity available today for potential customers that as you say are waking up to the value proposition of gas storage?
Well, you got to think of it in several buckets. I mean, one I mentioned that if we got it under contract, we are looking at a storage expansion opportunity, specifically in Texas. We have storage that's rolling off and renewing every year. We try to keep that fully under contract or pretty fully under contract. As that happens, we're expecting -- well, we are seeing, and we're expecting we'll continue to see those values improve.
But I want to make a further point about the bucketing here. Really flexible storage like we have about 30 or 40 Bcf of that in our Texas Intrastate business. Stage coaches are a pretty flexible storage asset as well. That's where the value is really appreciating the most. If you think about some of our shorter-term storage-related services like park and loan, in a backward-dated market, there's not as much opportunity to park gas for customers.
And so that shorter-term business gets a little more limited. But in the aggregate and in the overall outlook, storage is becoming more valuable in our judgment. And that's what made -- and we're seeing that, and it's also what made the acquisition opportunity, which was somewhat fortuitous but made it attractive to us.
Thanks, Steven. And then switching gears. A small piece of your business, but can you talk a little bit about the bulk business getting closer back toward levels. And can you talk about just some of the dynamics we're seeing with both commodity inflation and supply dislocation? Do you see some of this backdrop as a [ part ] -- tailwind from bulk business either on the pricing side or the capacity utilization side?
So we've been following along to that. We're back at our Pier IX facility, which is where the predominance of our export business is on the coal back to levels as we stand today. So, having closed the Kinetrex deal now, can you just give an update on, I guess, the opportunity set you see in RNG and whether you think that'd be a significant part of your capital plan over the next several years, either through acquisitions and organic growth? And then relatedly, can you just talk to any progress or developments in the voluntary market that you're seeing as you try to term out a RIN exposure there?
So Kinetrex, the three projects, as I believe Kim mentioned, that they -- that came with the deal, if you will. Those were all under contract, under EPC contract, et cetera. At the time that we close, that's been kicked off, those are on track.
In terms of the opportunity set, there are hundreds of landfill opportunities, but there are other competitive players out there. We think we bring some scale to that business.
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