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Wednesday Feb 1, 2017   
We always talk about California as being a three storm state, meaning that if it gets three decent size precipitation events throughout the year, the hydro streams/rivers and reservoirs will be in good shape to help with the supply of energy as well as the irrigation needs within the state.  For a couple of years (4 to be exact), the state saw less than three storms, which resulted in drought-like conditions and ultimately restrictions of water usage and hydro generation output.  This year, it looks like it is game on as we have seen several storms move ... » read more
Tuesday Jan 31, 2017   
It has been a full ten months since we last had any injection or withdrawal activity from the Aliso Canyon storage facility. In the meantime, SoCal Gas along with the California Public Utilities Commission, Department of Conservation, California ISO and the rest of the market stakeholders have been wrestling with the forward use plans for the cavern. Talk of shut down and retirement became the most favored option noting the political unpopularity of having underground natural gas storage next to the Porters Ranch residential area and a shopping mall. What continues to ... » read more
Monday Jan 30, 2017   
Last week at this time, the west was looking at below normal temperatures across the entire region with California and the Desert Southwest showing the biggest delta. This led to SoCal Gas's Sendouts to top the 4.0 BCF mark for three consecutive days.  With natural gas imports topping the 3.1 BCF mark, that left the grid short by 1.0 BCF.  As a result of having to draw from storage at this level, system operators sent out a critical notice that they were having to resort to pulling gas out of Aliso Canyon.  Albeit, only for a couple of hours during the ... » read more
Friday Jan 27, 2017   
Some of the best academic research related to power markets comes out of the University of California at Berkeley’s Energy Institute. In August of 2016 a California power markets academic dream team of Severin Borenstein, James Bushnell, Frank Wolak, and Matthew Zaragoza-Watkins published a paper titled “Expecting the Unexpected: Emissions Uncertainty and Environmental Market Design.” This is an update, re-work, and extension of a paper that the same crew published back in 2014. There are a number of very interesting insights and findings hidden ... » read more
Thursday Jan 26, 2017   
Since the beginning of the winter we have seen Alberta gas demand realize at levels much higher than forecasted. During the two Arctic air events in December and then again in January, system demand records were broken in each instance. Because of a the simultaneous demand on downstream pipelines and a drop in native production, the Alberta storage draws were quite large.  Figure 1 | Alberta - Nova System Demand - (scale is negative) From the beginning of December to present, 78 BCF of natural gas has been taken out of the ground to source the daily ... » read more
Wednesday Jan 25, 2017   
Since the largest methane leak in the history of the United States was finally plugged last February the relationship between Aliso Canyon and Californians has been.. complicated.  For the most part the facility had been shut down until inspections of all the wells can be completed and approved for further injections.  However, when times get tough Socal has reserved the right to withdraw the remaining gas in order to balance high demand days.  Yesterday was one of these days as the colder/wet weather moving through Southern California ... » read more
Tuesday Jan 24, 2017   
Storms have continued to batter California over the weekend and lasted through yesterday.  As you can see in Figure 1 below, there was a massive river of moisture that moved through the heart of Southern California and into the Southwest.  Along the Northern Coast it brought rain while inland you can see the mountain ranges showing heavy snow levels.   Figure 1 | California Jet Stream and Precipitation Pattern  The latest precipitation charts has the Northern Sierra region moving up to 51.8 inches (215% of normal at this time of year) through ... » read more
Monday Jan 23, 2017   
Last year at this time, engineers were closing in the secondary well being drilled along side the leaky well at Aliso Canyon.  If you recall, after trying several other unsuccessful options, they opted to drill a another well that would ultimately serve as a starting point to navigate over and plug the well in question.  This was after 3 months of the leak spewing gas into the air and citizens in surrounding neighborhoods having to find different living arrangements.  During that time, SoCal Gas operators were taking as much out of storage as possible ... » read more
Friday Jan 20, 2017   
The CAISO released some very interesting study results related to the 'supply of' and 'demand for' flexible capacity in the next several years as the renewable penetration rate continues to march higher. While this is a CAISO issue today, as more renewables are installed in other markets around the country, the experience of the CAISO may be relevant to other markets in the future. Here’s the bottom line. The CAISO does not have the right mix of flexible capacity resources that will be necessary to meet the net load ramps (load less renewables) in the next few ... » read more
Thursday Jan 19, 2017   
The New England gas market for years has been a constrained gas island where the main source of supply, Algonquin Pipeline, doesn't have the capacity to meet the space heating demands of the region. Because there have been no major pipeline expansions to meet the power plant demand during the peak consumption episodes, prices have a tendency to disconnect from the rest of North America. In Figure 1 below, you can see just how volatile the cash market has been over the past year. Figure 1 | Algonquin Cash Prices  One of the swing sources of supply to the New ... » read more
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