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| Thursday Jan 17, 2019 | |
| The winter started off with a bang as temperatures dropped in November giving a warning shot to the market. The cold weather caused gas markets to rally with storage levels below 5 year minimums. Last week we covered how the increase in gas prices drove gas to coal switching throughout PJM. Temperatures subsequently warmed up throughout December and early January shifting the fuel mix back towards gas. However, there appears to be an abrupt change in the near future with temperatures once again shifting below normal. Taking a look at Figure 1, cool air will drop down from Canada at the end of the week with the Dakotas moving below average. This will continue to push into the country throughout the weekend with the entire Eastern half of the US dropping significantly below normal. The cool ... » read more | |
| Wednesday Jan 16, 2019 | |
| The government shutdown continues as we are in the 4th week where the division of party views seems to be at a stand still while many government workers are still coming to work only to bank their hours in hopes that business gets back to normal and checks get written and the bills need to be paid. Figure 1 | US Government Shutdown Speaking of bills getting paid, this week started out with Pacific Gas and Electric (PGAE) filing a motion of intent to proceed with bankruptcy. Such news, moved the value of their stock from the $17 level down to just over $8.00. As of last night, the news continues to sink in as many are figuring out ripple effect and how each individual company associated to the power and gas utility is exposed. The stock price for PGAE is currently ... » read more | |
| Tuesday Jan 15, 2019 | |
| It has been a long time since we have had the opportunity to talk about heating load across the Lower 48. The climate has been in an El Nino pattern since the beginning of December which has kept the demand well below normal. But over the weekend the models confirmed a big change in the outlook. Over the next two weeks the total heating degree days will jump from 28 to 36 which will be the highest we have seen this winter. The surprise change in the outlook caught the market off guard yesterday forcing shorts to run for the hills. By the end of the day the market jumped 49 cents to $3.59. The exchange limit up is 50 cents. Figure 1 | Lower 48 Heating Degree Days, Climatology and Forecast From this week until next the daily ResCom demand is expected to jump from 35 to 47 BCF per day. » read more | |
| Monday Jan 14, 2019 | |
| Over the years, the Western Markets have been one of the most volatile across all of North America. On the power side, we have the largest hydro system in the Lower 48 as well as a state (California) that started pushing their Renewable Portfolio Standard (RPS) a few years back and have recently seen a burst in the solar penetration. This penetration is not only tied to the utility-scaled projects implemented by developers across the country but also the behind-the-meter integration of solar panels on residential and commercial entities across the state. Since the sun only shines during specific hours during the day, this leads to a net load profile that has both a morning and evening ramp profile that makes it harder to balance. Or stated another way, the new ... » read more | |
| Friday Jan 11, 2019 | |
| To be 14 years old again, what a blast!! As I picked up my son from school, he asked if we could go to Taco Bell and get an 'Arctic Blast' drink as he was thirsty and it sounded good. I was like, "what the heck is an Arctic Blast?" He described it to me as a somewhat healthy drink that would quench his thirst after a hard day at school and it only cost $1.00 during 'Happy Hour" times, which we were currently in. After a couple of iterations of back and forth conversations, he convinced me to take a shot at this so called 'Arctic Blast'. Figure 1 | Taco Bell Arctic Blast As we pulled up to the drive-through machine, the menu was plastered with so many combination offerings as well as the Happy Hour promotion of your choice of an 'Arctic Blast' for ... » read more | |
| Thursday Jan 10, 2019 | |
| While I was out on a walk through the park, I noticed smoke billowing out of a chimney in the distance. I couldn’t help but think of how coal generation had ramped earlier this winter and wondered if this was still the case. As I reached my computer the following day, started to look at the coal to gas ratio and noticed that it had plummeted drastically from the end of 2018. Zooming in on the PJM market, I noticed the two fuels had dropped from the nearly equal levels at the end of 2018. Natural gas had returned as the primary fossil fuel in the market. First, I took a look at the levels of thermal generation throughout the region. Demand from the thermal stack appeared to be higher in November and December of 2018. Could it possibly be the next tier of coal was needed to meet the ... » read more | |
| Wednesday Jan 9, 2019 | |
| Yesterday morning on my drive into work, I got a call from my mother, who still lives in God's Country (Wisconsin). At this stage in my parents life, my heart starts pounding for all the wrong reasons as the first thought is something must have happened back home. To my joy, it was just a friendly call to see how the kids are doing and to make sure they liked all the Christmas baking she sent along with the gifts. By the time I got to work, I felt I knew everything that was going on in my hometown and then some. I said I had to go and thanked her for calling as my heart was in the right place and it brightened my day. Prior to the phone call (earlier in the morning), i was staring at the weather model runs as the other Mother (Mother Nature) I have been known ... » read more | |
| Tuesday Jan 8, 2019 | |
| Recent weakness in the daily supply demand balancing has allowed the cash prices along the Gulf to drop back below the futures prices. This reverses a trend that has been in place since June with cash rices remaining well over the futures values. The result is that we have been getting significant storage injections at the salt storage facilities throughout the EIA South Central region. Because the LNG storage facilities also have on site discretionary storage capacity, The price signal incentivizes that capacity to fill as well. It is one of the reasons why sendouts at these export facilities have set new highs over the past week. Figure 1 | Total LNG Sendouts by Facility Corpus Christi has also increased the feed gas into the site as the facility ... » read more | |
| Monday Jan 7, 2019 | |
| Over the years prior to our eCommerce Newsletter package we discussed the Renewable penetration across all of North America as part of our North American Power and Natural Gas product. The conversation quickly reverts to the power burn component of the supply/demand balance as any increases/decrease in the hourly wind/solar profiles hit the thermal (coal/natural gas) stack. We have see the Renewable Portfolio Standard (RPS) tied to the State of California change both the power and natural gas landscape over the years as both utility-scaled and behind the meter solar capacity has risen to all-time records as of late. Figure 1 | California Utility-Scaled Solar Breakdown - Monthly The top pane represents the flat (24 hour) capacity factor, which takes the daily average output ... » read more | |
| Friday Jan 4, 2019 | |
| Prior to October 8th, 2018, the Pacific Northwest was all about the upcoming hydro season and how California's gas situation might impact the transmission flows on both the AC and DC interties. That all changed when the Enbridge pipeline explosion near Shelley, British Columbia occurred that late afternoon. The ball of fire that filled the air was due to a rupture in the 36 inch pipe that moved gas from the northern most production region down Vancouver, BC via the Huntingdon compressor. After the demand off-take for both rescom and industrial were factored in, the net gas volumes were sent down to the Pacific Northwest via the Sumas compressor on Northwest Pipeline (NWP). Figure 1 | Enbridge Pipeline Explosion The physical market sent a strong price signal the ... » read more | |