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| Tuesday Feb 4, 2020 | |
| The development of the LNG export industry has become one of the most important pieces of the continental balancing dynamic. In just five short years the volume total has grown from 1 to 9 BCF per day and that total is expected to grow this summer with the completion of Kinder Morgan's Elba Island terminal in Georgia. This would not be possible without the development of the global demand for natural gas. For years, exporters such as Cheniere, have relied on markets across the Atlantic for their cargoes as the prices were multiples higher than what we had seen in the United States. Figure 1 | Lower 48 LNG Export Volume But the price advantage is not what it used to be. In the past year the spread between the United Kingdom's National Balancing Pool (NGP), which is a proxy for ... » read more | |
| Monday Feb 3, 2020 | |
| Yesterday was one of the biggest sporting events that occurs around this time each year, it is the National Football League's ultimate game called the Super Bowl. This years match up was goiing to be exciting as the Patrick Mahomes led Kansas City Chief took on the San Francisco 49ers and their impressive defense. The game was better than advertised as the both teams played hard in the first half to where the game was tied going into halftime (10-10). After an excellent halftime performance by Shakira and J-Lo, both teams trotted onto the field in Miami to determine the winner and be crowned World Champions. Figure 1 | Super Bowl Sunday - Chiefs vs. 49ers The third quater belonged to the 49ers as they busted open a 20-10 lead on two nice drives of ... » read more | |
| Friday Jan 31, 2020 | |
| Over the past few months, we have written about the big uptick in wind generation across the state of Texas over the past few years and its impact to the ERCOT power grid. In the blogs/articles we have touched on how Texas has become the leader when it comes to wind capacity being placed on the grid and how it has impacted rule changes such as the Operating Reserve Demand Curve (ORDC) uplift chart during the summer months. Such a price signal is good as it is the lever the system operators can pull in the real-time market as well as a proxy for developers to incorporate into their pricing forecast model to see if a project is economically feasible to finance and put what we would call steel in the ground. Figure 1 | ERCOT Net Load Hourly Profile The graph above ... » read more | |
| Thursday Jan 30, 2020 | |
| Yesterday saw the February contract roll off the board as it settled just under $1.90. This symbolizes another month has liquidated (January 2020), which means we are one step closer to the end of the current winter season. As we all know from the EnergyGPS daily commentary within our subscription packages, Mother Nature has delivered a pretty mild winter season to date. The current 15-day forecast is not changing that mindset as the next 5-day period is showing the East, Midwest and parts of the South Central all warming up for Super Bowl Sunday and the start of a new month. The 6-10 day period is holding serve when it comes to warmer weather while the 11-15 day period is hovering around what is considered the normal marks for HDD accumulation. Figure ... » read more | |
| Wednesday Jan 29, 2020 | |
| We have written about the wind penetration across the middle third of the country with both SPP and ERCOT really stepping up over the past five years. In fact, when it is all said and done, the Lone Star State is paving the way to be the leader across all of North America as it's cumulative peak generation topped the 19.8 GW this month. The previous peak wind generation number was sitting at 19.2 GW for most of 2019. Figure 1 | ERCOT Wind Generation Breakdown - Monthly The graph in Figure 1 breaks down the monthly capacity factor in the top pane with the bottom pane representing the two parts that make up the capacity factor ratio. The numerator is the monthly average generation, which is represented by the bars while the denominator is the cumulative peak generation ... » read more | |
| Tuesday Jan 28, 2020 | |
| The ongoing issues with the lack of heating load across the continent has resulted in a forecasted surplus of gas storage inventory this summer. The current expectation is prior to next winter the Lower 48 will see the in ground supply approach 4 TCF. That bumps up against the storage capability. In an effort to avoid end of season balancing issues, actions are being taken now too incentivize power burn demand. By doing this the increased gas dispatch can buffer the surplus in the balancing. But in order to do that, the gas prices must cooperate. By dropping cash gas values, the heat rates will position gas generation as an advantage in the merit dispatch. We are seeing this in every major power market across the US grid. Figure 1 | Selected Spot On Peak Heat Rate ... » read more | |
| Monday Jan 27, 2020 | |
| The sad news of Kobe Bryant passing away hit not only the sports world yesterday but everyone who he has touched over the years. The tragedy was compounded by eight other individuals on the helicoptor flight, one of which was his 13-year old daughter Gianna. The National Basketball Association (NBA) had 8 games on the schedule for Sunday and each game was played with heavy hearts and tears. Some games started with the team winning the tip-off crossing half court only to let the 24 second clock expire which is considered a turnover. Upon the other team getting the ball, the inbounds pass went to a player who stood there and let 8 seconds pass without going over half court. This is a violation within the rules of the NBA and ball is then returned to the team ... » read more | |
| Friday Jan 24, 2020 | |
| Yesterday's short-term natural gas market came out firing on all cylinders, which meant the prompt month was up a measley $0.05 prior to the open. If you looked at the weather model runs, there was a slight HDD uptick in days 14 and 15 that game some hope for a late winter-season 'rally'. This move up pushed the prompt month up to $1.96 which is still $0.20 below where the month of February started the month trading. Figure 1 | Weather Model Run - 15 day Forecast As the day went on, the EIA stroage number was released and the noon weather model runs were coming out. This halted the little party that was going on in the front of the curve as the day ended up settling a couple of pennies higher than the previous close. As of this morning, the model runs have taken a ... » read more | |
| Thursday Jan 23, 2020 | |
| Now that we are basically into the final third of January 2020, we though it would be a good time to cover a couple of things that has shaped the natural gas market into its current state. This state is a robust supply situation and a prompt month that has dropped below the $2.00 handle it was holding onto for some time. The two main pieces of this conversation are production across the country and the weather pattern that has been locked in since early December 2019. Figure 1 | Balmy Weather Patterm - Lower 48 Starting with production, we continue to see strength in numbers as the daily average for the month of January 2020 is right around 94.5 BCF/d which is up just over 7.0 BCF/d when compared to last January. This number is quite impression as the pipeline expansion ... » read more | |
| Wednesday Jan 22, 2020 | |
| Throughout my career in the energy industry, the Pacific Northwest has always been close to my heart as it is a market that reshuffles its cards every year, has a lot of intra-year volatility and is quite interesting to learn about as the Columbia and Snake river basins have a lot of histroy. What gets lost in the shuffle sometimes with the Pacific Northwest Hydro outlooks is what is happening on the Westside as this region can produce anywhere from 1.7 to 2.0 GWa of generation when the streamflows are at their cresting point. For this to happen, Mother Nature needs to deliver either precipitation in the form of rain or be cold enough to layer in some lower elevation snowpack that will eventually melt when it warms up and send the newly found water down the mountains and into ... » read more | |