David Foley: Power Demand Needed to Lift Natural Gas Prices

David Foley believes the key to reverse the current pressure on natural gas prices is demand for power. "That will take a bit." the CEO of Blackstone Energy BX told CNBC's Squawk Box this morning. "We have seen industrial demand, petrochemical demand, come back. Over the years, that has been declining," he notes, "We have had flat natural gas consumption in the US for well over a decade." "I think it will ultimately need to come from power," Foley says, "And for power to come back, we need to see the economy come back, so we can consume more power." "And we need environmental regulations to kick in so that coal mining can close. I think that is going to take until 2015, 2016," he adds. "That will be a natural embedded source of demand for natural gas." On fleet conversion moving over to natural gas, Foley sees the private sector already moving on that direction, without needing government intervention. "The private sector is already taking care of some of the municipal fleets." he notes. "It is much more an environmental decision, as well as a cost decision. They can reduce cost quite a bit. And for trucks that come at the same hub every night, refueling options are easier. Especially for 18-wheelers. If you start with a high density corridor, that could kickstart it," Foley adds. Perhaps signaling to the negative perception Blackstone and other equity firms experience in the eye of the public and government, Foley notes that an attitude change is needed in regulation and government when it comes to helping Blackstone and other firms invest towards energy as well as job creation. "A lot of folks tend to think of us as doing this private to public buyouts," he says, "but we are finding better value in creating businesses from scratch," refering to energy startup investment at his company. "For that to work, it makes such a difference to have a [government] leadership that can cut through the red tape. It helps us to think that we have a team that works for us, not against us when we are pushing to invest hundreds of millions of dollars, open hundreds of new jobs and keep these energy facilities open." Foley concludes. At the end of February, Blackstone announced a $2 billion dollar invesment in the natural gas-exporter Cheniere Energy Partners, an offshoot of Cheniere Energy CQP.