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Monday Jan 13, 2025   
When we think of winter gas demand what typically springs to mind is domestic heating demand. This has been the defining feature of the winter season here in the lower 48. In recent winters we have seen this story start to shift as LNG capacity along the gulf coast grows ever larger. Now, we must also consider the other winter demand, a pull on US markets that has steadily inched up over the last two months even as cash prices gain winter premiums. Figure 1 | US LNG Exports (MMCF) The above chart looks at LNG Exports across the current and previous two gas years. Both now and in winter 2023-2024 we see these facilities operating close to their full capacity. It may seem counterintuitive that exports would peak when price is at its highest, but our peak demand lines up with peak demand ... » read more
Friday Jan 10, 2025   
Electrolysis has two definitions: 1) chemical decomposition by passing an electric current through a liquid or solution containing ions and 2) the removal of hair roots on the skin by the application of heat using an electric current.   To be clear, this blog is about the former, specifically the production of hydrogen with electricity.  See Figure 1 below for clarification.  I can’t help you if you’re having an issue with a unibrow. Figure 1| Clarification on Subject of Blog Hydrogen is an essential feedstock in numerous carbon-intensive industries, including chemicals, cement, fertilizer, metals, and fuels and commonly is produced through thermal processes such as steam reforming of hydrocarbons.  However, a serious look at decarbonizing major ... » read more
Thursday Jan 9, 2025   
December in ERCOT provided some good examples of how the renewable expansion has changed the landscape within the ISO, even in wintertime.  ERCOT was in the spotlight in our latest Renewable Monthly, “December 2024 – Solar Staying Power”, which highlights the key takeaways tied to renewables in ERCOT and other markets across the country each month.  December and the rest of the winter typically see the lowest solar output of the year while also seeing the wind profile flatten, losing out on supply during the light load hours in particular compared to the rest of Q4.  This was certainly the case this December as well, with the average solar profile for the month losing 2.2 GW from the afternoon peak and 2.7 GW of wind from hour ending 1 (while the midday ... » read more
Wednesday Jan 8, 2025   
The first week of 2025 is in the rearview mirror and one of the biggest stories of the year so far has been the cold blanketing a large part of the country. A winter storm tore through the middle of the country over the weekend, dumping snow and wreaking havoc. Now the storm has worked its way east and is already making its presence felt on the natural gas and power markets. We covered it in our most recent article, titled ‘Dispatch from the Cold Front’. Figure 1 | Atmospheric G2 Morning Forecast from January 2nd The Northeast is particularly affected by the incoming wave of extreme cold, with residents already wearing hats, gloves, and scarves and gathering around gas fireplaces for warmth. Spot natural gas prices across this region reached double digits in yesterday’s ... » read more
Tuesday Jan 7, 2025   
The days leading up to the holiday season are spent making sure the boxes from the online purchases arrived or rushing out to the mall to find the final stocking stuffers for the kids.  There are also the late night wrapping sessions where it never fails that the tape dispenser runs out or the to/from tags go missing to where you are writing initials in a black marker until the stores open the next morning.  Once the paper is spewed all over the floor and everyone is cherishing the gifts received, it does not take long for the conversation to migrate to when should take the clothes back for exchange and get something that we really want.  Figure 1 | Gifts Over the Holidays and Year-Round Standing in the lines the days after the gift opening session is not ideal but it is ... » read more
Monday Jan 6, 2025   
Extreme weather events, like the one that is hitting the Lower 48 east of the Rockies, tend to get the attention as demand soars, production volume deals with freeze-offs and the battle of the molecule between power burns and rescom come into play.  In today’s blog, we are concentrating on the flip side of things as the West region is on the outside looking in when it comes to the below-normal temperatures, which is a bit of a switch compared to the 2022-2023 Winter and last January (2024).  The stable supply/demand balancing equation, surplus of storage gas and lacking power demand has created stable natural gas settles which then drive the CAISO day-ahead auction clears on the power side. Figure 1 | Peak Day Ahead Load vs Flat Average California Temperature   The ... » read more
Friday Jan 3, 2025   
The calendar changed hands this week with 2024 going in the books while 2025’s is staring at arctic cold that starts in Canada and moves its way down into the Upper Midwest and East starting today.  By next week, the entire country east of the Rockies is going to be working through below normal temperatures with each region tapping their respective winter lows.  The West is shielded this go around by the Rocky Mountain divide as the weather model runs has the Pacific Northwest looking at highs in the mid 40’s while California has Sacramento in the low 60’s while Burbank is showing numbers in the low 70’s with sunny skies. Figure 1 | Weathering the New Year The near-term (1-5 day), shown in the leftmost image of Figure 1, has the dark blue coloration ... » read more
Thursday Jan 2, 2025   
As the new year has rolled around, the Northwest hydro system has seen a surge to finish off the month of December and set up things moving forward in a way that should have the region awash in water and MW to start off January.  The figure below plots daily average total system hydro generation, and the far right of the figure shows the line in blue for 2024 surging from 11.7 GW of generation on the 28th of December all the way up to 14.8 GW on the final day of the month on the 31st.  The reasons behind the change cannot be entirely tied to rainfall in the PNW.  The Northwest has certainly seen wet conditions—especially over the second half of the month, as for December as a whole total unregulated flows were only 82% of normal at The Dalles—but some of that ... » read more
Tuesday Dec 31, 2024   
Back in October, we discussed how the natural gas market in Western Canada has been transforming over the past 12 months. We examined both demand and supply components across the region. Starting with key demand components, we saw an increase in the flows from Alberta crossing the Empress border, with levels surpassing the 4 Bcf/d mark since November 2023. Figure 1 shows the monthly average data for Alberta intra-demand, Empress demand, and storage movements since 2019. In January 2024, recorded flows reached 4.38 Bcf/d, significantly higher than the previous year's average of 3.71 Bcf/d. This expansion underscores the growing capacity of the Empress border to move natural gas molecules from Alberta to the central/eastern parts of Canada and the Midwest region of the Lower 48. This past ... » read more
Monday Dec 30, 2024   
The Cascades and Sierra Nevada have both seen healthy snowfall in the early season. For some, this means New Year’s Day will be spent enjoying snow sports and fresh powder, but hydroelectric dispatchers look at these numbers a bit differently. For all the ski bums and weekend warriors, snow should be enjoyed well its here, but in the turbine room of a dam snow is not worth much until it melts and flows downhill. Still, the snow has value as it acts as a convenient storage reserve, holding massive amounts of H20 through the winter months and then releasing it just as the grid starts to call for power. Figure 1 | California Snow Water Compared to Normal   The above chart shows snowpack for the state of California as a percent of the normal accumulation on April 1st. This date is ... » read more
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