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Wednesday Aug 7, 2019   
Over the years we have detailed the growth of the renewable sector across the entire country with specifics tied to California as the state transitioned from harvesting the wind to tapping into Mother Nature's rays as their solar growth is the pioneer when compared to anyone else out there.  When you combine both the utility-scaled projects with behind the meter contraptions, you are looking at anywhere from 18 to 19.5 GW of generation when both are at their respective peak output.  That is quite impression when you think about it as harvesting nature's sunshine makes a lot of sense in so many ways.  But like anything else, the good always comes with some obstacles as the grid developed years prior was in need of a makeover as it takes special assets to help balance the ... » read more
Tuesday Aug 6, 2019   
Coming into this injection season there was on e region that stood out as having the most challenging deficit to overcome. The Rockies, because of the many years of stagnant production was not positioned to make any headway on the injection activities. It was also noted that the Pacific Northwest would also need to draw significantly more volume from the region in order to make up for the import issues on Westcoast Pipeline. But all that changes this spring when production volumes made a big recovery particularly on the Colorado Interstate system. By the last week of July the 26 BCF deficit from the first of April had turned into a 7 BCF surplus.  Figure 1 | EIA Mountain Region Storage Inventory for 2015 - 2019 Starting in early spring, CIG had shown big year on year increases ... » read more
Monday Aug 5, 2019   
Now that we have our first full week of August to look forward to, we thought it would be a good time to take a pulse on the natural gas supply/demand picture.  The latest EnergyGPS Newsletter Article published ('Summer Chill') over the weekend detailed how the weather patterns over the past few weeks have impacted the overall demand on the grid and its impact on the forward looking market when it comes to price. Other factors that also play into the weather mindset are components like production, power burns, lng and rescom come the winter season.  Looking at the production, the numbers are solid across the board as the latest week or so has seen the daily average jump up beyond 91 BCF/d.  This is quite impressive when you put it into context of where we were last year at ... » read more
Friday Aug 2, 2019   
EnergyGPS has previously discussed the record low Waha prices that plagued the West Texas this past spring, with prices reaching as low as negative $-6/MMBtu towards the end of March. As a refresher, negative prices mean that suppliers were paying buyers to take gas off their hands (a marked reversal of the usual order of business). The following figure shows the daily cash price for Waha since the beginning of the year: Figure 1 | Daily Waha Cash Price We also discussed, if gas prices are negative, then it makes sense for natural gas generators to offer negative as well. After all the gas generators are being paid to purchase the gas and thus should be willing to pay to generate electricity as well, if they’re paying less to generate than they are receiving from the grid operator. » read more
Thursday Aug 1, 2019   
The energy industry is undergoing constant change. This is largely due to advancing technology that either raises power plant efficiency or increases the ability to obtain fuel, like we saw during the gas boom after new horizontal drilling methods were introduced. However, there will always be resistance to change. With Trump’s platform of saving coal jobs and pro-nuclear stance, a wave of subsidies have hit the markets keeping aging generation alive. Many nuclear bills have already passed throughout the Northeast, but the latest to surface was a bill in Ohio. Like the many other subsidies, the legislation targets nuclear generation throughout the state, however, it also subsidizes two coal units. Figure 1 | Perry Nuclear Power Plant I find the not so subtle addition of coal plants ... » read more
Wednesday Jul 31, 2019   
If you have spent any time in Southern California, you quickly realize the jargon around the major interstates and highways is a little different than other parts of the country.  For example, if you have to ask for direction out of the rental car place to get to I-5 north bound, the person at the check-out will tall you to take a left, then a right to merge.  Once you merge stay in the left most lane until you see a sign for 'The 5'  That is when you take a quick double take in your brain as you wonder if you heard the person correctly.  Once you calibrate it back into your brain as I-5 you say thank you and drive away.  Once you get to your destination of choice, if you are staying at a hotel and need to get directions to some other local establishment, the ... » read more
Tuesday Jul 30, 2019   
We have noted in previous articles how maintenance outages can wreak havoc on a gas system and as a result cause pricing issues. Over the past three years we have been covering the saga at SoCal Gas as the point became the most volatile and opportunistic location for trading. But that now has seemed to shift. SoCal has solved many of their woes by welcoming some operational mandates from the California Public Utilities Commission. Outside of California the most exciting place to trade may be over the United States border to the North. Nova Gas has been undergoing many seasons of maintenance and system upgrades as they expand capacity on their system. This is being done in an effort to keep their energy production complex competitive with the booming volumes coming out of Permian, Bakken ... » read more
Monday Jul 29, 2019   
Over the last couple of years, the natural gas landscape has developed into a physical basis market where each region has its own set of market fundamentals tied to the supply/demand picture.  Take for example, up in the Pacific Northwest a pipeline explosion (Enbridge) last October (2018) put the region on the map as the main artery of supply was severed and without knowing how long it was going to take to fix the problem and understand what caused the 36 inch pipe to rupture in the first place, the question quickly became how will the region get its natural gas for both the winter Rescom demand and the ever popular power burns.  Today's news letter take a top level view of the regional fundamentals in the natural gas space and the tools EnergyGPS has in place to monitor the ... » read more
Friday Jul 26, 2019   
Although PJM may have coasted through last week’s heat wave—it experienced an all-time weekend peak but issued no reliability warnings or actions—FERC turned up the regulatory burner under PJM in its capacity market docket.  Yesterday, FERC ordered PJM to halt its Base Residual Auction (BRA), currently scheduled to run in mid-August 2019 (EL16-49-000/EL18-178-000).  FERC did not say what's next. Presumably it will get on with issuing an order on PJM's proposal to modify its capacity market, with the 2022-23 BRA held later this year or, more likely, in 1Q2020. PJM normally conducts its 3-year-forward capacity auctions in May but received approval last year to move the date of the 2022-23 BRA out to August 2019.  That schedule was designed to allow enough ... » read more
Thursday Jul 25, 2019   
The recent bout of hot weather that hit the Northeast late last week caused demand to rocket upwards to its high point so far this summer causing oil to enter the market in ISONE. Even the weekend couldn’t give the region a break with temperatures continuing their climb on Saturday. Although the hottest weather took a little longer to make its way into ISONE, the market was no exception to the enveloping heat. With soaring demand, generation was no longer able to remain in the gas stack and was forced to burn oil in order to meet load. While the market is no stranger to oil burns, the fundamentals behind the recent spurt are different than the winter when oil burns are most prevalent. Taking a look at Figure 1, we can see that the highest demand hit the region over the weekend ... » read more
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