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| Tuesday Oct 30, 2018 | |
| Throughout the fall we have noted in many of our communications how the power burns are outpacing previous year's comparisons. October is going to post a 5 BCF year on year gain in gas generation demand. A good portion of this has been the effect of hurricane destruction in Texas last year compared to this year. But outside of a weather effect this maintenance season has emphasized the big shift in the dispatch stack. New gas fired generation is making a material impact on the base load dispatch. This is causing stronger gas demand intensity. Figure 1 | North American Power Burns The gain in burns over the past few years has been largely a function of gas replacing coal in the intermediate portion of the dispatch stack. Rampable resources were largely ... » read more | |
| Monday Oct 29, 2018 | |
| If you are a Boston Red Sox fan, the 18 inning marathon on Friday night did not end as you had planned, especially after taking the lead in the top of the 13th inning only to give back the run in the bottom half. This left the series at a 2-1 advantage with Game 4 on Saturday night. After giving up a few runs, the Boston bats came alive and rattle off 9 runs to take a commanding 3-1 lead heading into Sunday nights match-up against David Price and Clayton Kershaw. Yes Boston Nation, you were only one win away from another World Championship!! That dream came through with a stellar performance by Price and clutch hitting by the team with the best record in baseball this past year. Congratulation to the Red Sox players/coaches as well as for all the Boston fans that ... » read more | |
| Friday Oct 26, 2018 | |
| It is that time again when the Fall Classic or better known as the World Series in Major League Baseball (MLB) takes center stage when it comes to sporting events. I felt going into the series between the Boston Red Sox and the Los Angeles Dodgers, my preparation of what to expected and knowledge of the two teams was better than it has been in the past decade. This is due to Mr. Belden being a diehard Red Sox fan over the years and over the last month coming into the office after a weekend series and discussing how they played. As the confidence rose after beating the Yankees then traveling down to Houston and beating the reigning champions, the Boston nation was going into the World Series with a lot of confidence. Figure 1 | Boston Red Sox Nation On the Dodgers front ... » read more | |
| Thursday Oct 25, 2018 | |
| Before the prevalence of cheap Marcellus gas, the PJM market was seen as a West/East dichotomy. A large portion of generation sat in the West and constrained along two 500 kV transmission lines in Central Pennsylvania. Eventually, energy would make its way towards the major population centers along the Coast. Congestion between the West/East was represented by the spread between the two hubs. However, advancements in horizontal drilling made these gas basins not only economically viable, but among the cheapest gas reserves in the United States. As new gas generators popped up along major pipelines in the East, the previous dynamic shifted. With more generation closer to the Coast, the region was less dependent on the West. This also exposed the flaws in the West/East dichotomy ... » read more | |
| Wednesday Oct 24, 2018 | |
| The West has been very active the past couple of weeks with the pipeline rupture in British Columbia. For example, the Sumas market started out the month as one of the lowest gas hubs in the the cash market to now being the highest as flows from the Spectra BC Westcoast Pipeline to Norhtwest Pipeline (NWP) dwindled down to 0 BCF after the rupture. As it currently stands, flows are down from 1.2 BCF capacity at the Huntingdon /Sumas compressor (where the two pipes exchange the gas) to flowing anywhere between .350 and .500 BCF/d. Prior to all this excitement, the talk of the market was tied to the nomogram constraint at Tracy-Los Banos that was showing up across the midday heavy load hours and pushing NP15 up over SP15 anywhere between $4.00 and $12.50 depending on the ... » read more | |
| Tuesday Oct 23, 2018 | |
| This week the Plains, Midwest and Northeast are seeing an early shot of winter. Temperatures are 8 degrees below normal which is causing a premature jump in space heating. This is occurring at a time when almost all of the storage caverns are scrambling to secure gas for injections. There is genuine concern at many LDC entities across the region that there is not enough gas in the ground for reliable winter supply. Due to the need for draws this week, the cash values have jumped above the winter strip at many hubs. Figure 1 | Dominion South Cash and Winter Futures for September and October For example, the price action at Dominion South is surprising. This is the pricing hub for Utica and Marcellus production volume and despite the gains in volume, the dynamics are ... » read more | |
| Monday Oct 22, 2018 | |
| It is that time of year again, when the signs for all the local individuals running for office are in the yards around town, commercials land on the television where they bash their opponent, emails hit one's inbox letting you know how to vote and last but not least people knocking on your door to make sure you are aware of some of the key measures that are on this year's voting ballet, which have to be in by November 6th, 2018. For example, yesterday afternoon around 1:30 pm, two individuals wearing bright yellow shirts that said VOTE on the front rang my doorbell. Upon opening the door, they first introduced themselves and then jumped right into asking if I knew much about Measure 26-199 and 102. The former goes hand in hand with the latter as the Measure 102 is ... » read more | |
| Friday Oct 19, 2018 | |
| Up in Canada, the province of Alberta has been making a name for itself since I can remember. When I started in this industry, the Alberta natural gas market was positioned wel,l as it could deliver molecules to either the Northeast or Pacific Northwest/California. On a cold winter day when both regions were vying for natural gas, prices would rip higher. The build out of the REX pipeline and and the Shale phenomenon in the Marcellus/Utica basin neutralized the position of gas owners in Alberta and as recent as last summer/fall the new regime was in play as AECO cash market traded negative as maintenance work on the intra-provincial grid not only restricted pipeline capacity to the Lower 48, it also clogged the injection capacity into storage. ... » read more | |
| Thursday Oct 18, 2018 | |
| The weather patterns over the past few weeks have had an impact on the Northeast, Mid-Atlantic and Ohio Valley to where the grids have gone from warm/humid temperatures to a forecast that is calling for below normal temperatures the balance of the month. Such swings can be attributed to the Hurricane/Tropical Storm season where both Florence and Michael moved through the Carolinas and up into the Northeast as well as stretching into the Ohio Valley, where each brought flooding and high winds. On the back end, the artic air mass sitting in Canada has been pushing down as of late and will continue to be present as the Houston Astros trek back to Boston for Game 6 and a possible Game 7. Figure 1 | Accuweather Northeast Weather Forecast With outage season coinciding with the ... » read more | |
| Wednesday Oct 17, 2018 | |
| All the attention this past week has been tied to the Enbridge pipeline explosion that occurred just over a week ago. We have seen Midc trade triple digits during the cash section Wednesday and ultimately index at $108. This was a was a massive move up considering the prior day the same heavy load product settled in the upper $30's, which was quite bullish by itself as it traded basically flat to SP15. It was no surprise that Midc had to run up to the triple digits trades as many of the natural gas power plants on Northwest Pipeline were not able to get the gas needed to produce electricity on the grid. The bottom line is the Pacific Northwest entities were scrambling to get the power to stay at home, which meant you had to price aggressively until the price ... » read more | |