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| Tuesday Dec 17, 2019 | |
| A decade ago, the industry relied on the Baker Hughes rig count to provide a good indicator on the direction of natural gas production. That worked well in the era of conventional drilling. But once horizontal drilling became the technology of choice, this metric became irrelevant for determining future volumes. As best practices were adopted across the country the production community was able to focus on efficiency as a means of increasing volume. But light of a drop in rig counts it meant there was a collision ahead. At some point the gains from new technology would level out and we would have to revert back to rig counts to further the growth. That meant doing more with less would eventually run its course. Figure 1 | Baker Hughes Lower 48 NG Rig Count The industry is starting to see ... » read more | |
| Monday Dec 16, 2019 | |
| Everyone knows the Christmas tale of Rudolph the Red-Nosed Reindeer, he was the deer that was born with that bright red nose that everyone made fun of until one Christmas Eve when Mother Nature dealt the North Pole with a blizzard like no other. It was this one reindeer that was able to save the day as his bright red nose led the team of reindeer pulling Santa's sleigh to the promised land to deliver all the gifts to the children who went to bed after leaving the milk and cookies out for good Ole Saint Nick. Figure 1 | Rudolph the Red-Nosed Reindeer If you look at the weather forecast for this next 15 days, you will see that Mother Nature is the one who has the bright red nose this year as the entire country is looking to be above normal when it comes to the daily average ... » read more | |
| Friday Dec 13, 2019 | |
| Long time readers of the Friday edition of the EnergyGPS daily blog know about my admiration for the research and writing of Vaclav Smil, who is the Distinguished Professor Emeritus in the Faculty of the Environment at the University of Manitoba. Professor Smil writes about natural resources, human consumption, and technological change. Four of his books are contained in Bill Gates’ list of his 60 favorite books as reported by Blinklist. One of my favorite books by Smil is titled “Energy Transitions: Global and National Perspectives.” In this book Smil provides searing, data-driven insights pertaining to the time it will take to shift from our current, fossil-fuel based energy economy to largely renewable energy infrastructure. A number of people in the renewable ... » read more | |
| Thursday Dec 12, 2019 | |
| It is that time of year again where the holdiay parties start to form, Christmas trees are sitting in a place ready for the gifts to be put under them and the decorations are abound around the house. It is a festive time of year no doubt as people generally seem happy. It is also a time of year that the annual Hydro Year End meeting takes place in Portland. It is a day long event where everyone on the Technical Management Team (TMT) congregate as re-live the previous Water Year and discuss how this year is going to be another trying but enjoyable one as we start the New Year. I thougtht it would be good to highlight some of the key points of the day-long meeting as they tie into the EnergyGPS Pacific Northwest Hydro Reports and Discussions that we publish as the Water ... » read more | |
| Wednesday Dec 11, 2019 | |
| Now that the regular season is over for college football, there will be a pause before some of us get to hear the 'Eyes of Texas' fight song played at every Texas Longhorn football game. If you happen to be in San Antonio for New Years (December 31st, 2019), you will not have much of a choice as the Texas Longhorns play the Pac-12 runner-up Utah Utes. Like any other bowl game that has 18-22 year old kids playing for their school and fans, it should be exciting to say the least. Figure 1 | 2020 Alamo Bowl Prior to any tailgaiting and the actual kick-off, their is another event that should have all eyes on ERCOT. If we stick with the college bowl theme, the game will be played on December 17th, 2020 where the Power Demand is colliding with the Wind Generation ... » read more | |
| Tuesday Dec 10, 2019 | |
| Oh how the sentiment for natural gas can change so quick. it was only four weeks ago when the prompt futures had risen to $2.86. The EIA inventory report had come out with a large withdrawal of 94 BCF indicating an early start to the heating season. The forecast was calling for more below normal weather. Due to the polar event we had at the turn of the month, freeze ins had cut back production from 94.7 to 93 BCF. This was exactly what the balancing needed to clear out the ongoing year on year storage inventory surplus of .5 TCF. It did not take long to flip all of those expectations on their heads. Production not only recovered its losses but posted new record highs by the middle of the month of over 95 BCF. The weather turned from a early bout of arctic cold to what now looks like an 8 ... » read more | |
| Monday Dec 9, 2019 | |
| Over the past couple of weeks, California has been hit with some heavy duty storms, including this past weekend in the Bay Area where some of the streets in the city were flooded. This is not uncommon but sometimes goes unrecognized to how it impacts the overall power grid. The first thing that occurs is on the demand side as the sunshine goes away and people are left with some dampness to their day. If it is anything like the Pacific Northwest, the moment you get a little wet from the rain and it is cold outside, the body has a chill to it that takes a long time to get out of your system. The perfect example of this is standing outside at a soccer complex in a light drizzle for 2-3 hours as you watch a match then wait around for the coaches to talk to the players ... » read more | |
| Friday Dec 6, 2019 | |
| It’s been over 2 months since the Northwest Power Pool (NWPP) grabbed the mic and declared that it’s leading the charge to move the Pacific Northwest power industry to a common framework that will assure resource adequacy. In our October article, A Resource Adequacy Paradigm for the Pacific Northwest, EnergyGPS provides an overview of resource adequacy with a focus on the PNW resource adequacy problem. The article outlines the need for providing and adequate contracting and market mechanisms to ensure regional adequacy possible at a reasonable cost. Our blog today looks at one aspect of the problem, measuring the capacity value of wind. But first, an update. No pun intended but the NWPP has gone “dark “on the RA topic. All we ... » read more | |
| Thursday Dec 5, 2019 | |
| Over the past couple of days, the California grid lost some of its renewable energy as the cloud cover wiped several gigawatts of solar during the middle of the day. As a result of such an event, the CAISO grid quickly priced itself at a level that warranted natrual gas units to set price as they were the marginal unit during the middle of the day. We did see the Pacific Northwest adjust accordingly to the price signal as the Paci transmission line filled up the entire day instead of shaping itself to the inverse of the typical solar profile. Figure 1 | CAISO Day-Ahead Paci Transmission Flows - Hourly If you scroll down to the third pane, you wcan see that the Desert Southwest did not track with the Paci flows as the midday remained at the lower levels while the evening ramp ... » read more | |
| Wednesday Dec 4, 2019 | |
| Over the past few days, we have seen some precipitation in Southern California. As a result, the solar profile within the CAISO footprint shifted quite a bit lower compared to what it looked like prior to the holiday weekend. If you look at the chart in Figure 1, you can definitely see the shift lower this past Saturday and Sunday along with Tuesday's results. If you compare actual peak numbers from the 26th of November to December 3rd, the delta is a staggering 4 GW (7.0 GW minus 3.0 GW). Figure 1 | CAISO Hourly Solar Profile With such a change, it is not surprising that the grid is needing more thermal supply and imports from the Pacific Norhwest during the middle of the day and less megawatts as flex ramp. The graph below illustrates the change in flows on ... » read more | |