Featured Articles
| Tuesday Jul 10, 2018 | |
| Besides day to day fundamentals coverage, EnergyGPS provides several forecasting tools to help determine value in the natural gas futures market. One of our client's favorite is the Natural Gas Balance Sheet as it takes a forward looking assessment and forecast of the major supply-demand components across the Lower 48. We assess production, imports, exports, LNG and ResCom demand to provide a monthly storage balance that extends out 18 months. Figure 1 | Sample of the Energy GPS Natural Gas Supply/ Demand Balance Sheet As you can see in the figure above, each component mentioned above is laid out in a format that has the supply as a positive number while the demand is negative to the grid. Over the past decade, the grid has reshaped itself several times as the demand has outpaced ... » read more | |
| Monday Jul 9, 2018 | |
| If you are a National Basketball Association (NBA) fan, you are aware that LeBron James has committed to play for the Los Angeles Lakers as he signed a 4-year contract right after free agency began. This is a big deal as he is noteably one of the best players of all-time and still has alot of life in his basketball career. Figure 1 | LeBron James's is a Los Angeles Laker - Jersey #23 if you followed the story, it was not much after midnight on the first day of the NBA free agent courting period when LeBron and the Lakers general manager Earvin Johnson (goes by the name 'Magic', you mihgt have hear of him). When they sat down for a three hour conversation, I am sure there was a lot that was covered from a basketball operations standpoint as well as getting to know each other a ... » read more | |
| Friday Jul 6, 2018 | |
| Every year at the end of June I coordinate a decathlon of leisure sports which is held in beautiful Sisters, Oregon. While the rest of the world is focused on the World Cup or Wimbledon, thirteen brave, fading, middle-aged men compete in a 15-hour marathon of events designed to test one’s breadth of experience, basic fitness (but not more than basic), mental stamina, coordination, and the “eye of the tiger.” Figure 1 | The author receives the "Yellow Jersey" after the first event in the 2018 Aluminum Man Competition I’ve published a recap of this event for the last few years. A number of readers have told me it is their favorite newsletter of the year. I’m not sure exactly what that says about our readers’ interests or the quality of the other 250 ... » read more | |
| Thursday Jul 5, 2018 | |
| The 4th of July night sky is filled with fireworks across the country. Some are set off by the neighbor who deems this holiday as their favorite and has gone out and purchased a large stash of explosives that make for a great display. Other displays from from the neighborhoods within a city or by the city itself. Here in Portland, the combination of the three existed into the later hours of the night as you could hear the block parties pick up around dusk. The Sellwood neighborhood always has a nice display of fireworks while the likes of St Johns and the City of Vancouver always get a crowd. The main event is tied to the Portland Waterfront Blues festival where music is played all day and is capped off with a big display of sparkles lighting up the ... » read more | |
| Tuesday Jul 3, 2018 | |
| In previous Newsletters we have discussed the supply/demand issues that SoCal Gas will face this summer. There are ongoing maintenance outages across their system that are limiting the flow of supply into their system to just 2.6 BCF per day. On top of it, the largest storage cavern on their system has been restricted as a last resort source of supply. It is only to be used when reliability is at risk. These supply problems are not much of an issue when the system demand remains low. There is adequate supply from the adjoining pipelines to meet the sendouts. The problem arises when the temperatures drive heating or cooling load above the available capacity rating of the system. This past spring has been rather mild with only a handful of days in the LA Basin reaching over 90 degrees. This ... » read more | |
| Monday Jul 2, 2018 | |
| If you grew up in the 80's Eddie Murphy was front and center as one of the top comedians in the industry. It was his box office hit Beverly Hills Cop that put Detroit back on the map as well as moonshot his career. Figure 1 | Beverly Hills Cop - Cast Members The plot of the movie is tied to a Detroit cop by the name of Axel Foley takes personal vacation time and go from Detroit to Beverly Hills to investigate his friend's murder. The twist is Axel is in some hot water of his own as a sting operation a couple months prior went sour and caused quite a bit of damage to where his boss on the Detroit force threatened to fire him unless he changes his way on the force. That did not stop Axel as he landed in Beverly Hills and started, in fact as the plot thickened Axel was back to ... » read more | |
| Friday Jun 29, 2018 | |
| Back on May 25th, the Energy Newsletter discussed the capacity power markets across specific ISO's across the country by referencing some Scooby Doo analogies, where the PJM market was characterized as Fred. If you have watched any episodes of the show/cartoon, Fred is a consummate professional, from the way he handles dealings with the clients of the gang to the final reveal of the villain. Every activity is paced out and deliberately performed. He gets the job done. This describes the PJM capacity in a nutshell as its market has been around for a long time and seems to be working from a holistic standpoint. In our most recent Newsletter article, titled "Living in Indeterminate Times: Capacity Performance Obligations Kick In at PJM", we take a look at how the first ... » read more | |
| Thursday Jun 28, 2018 | |
| Getting up for the markets in the Pacific Time Zone is hard enough when you are used to it but when your body is acclimated to Hawaiian time, the 3:30 am alarm is basically 12:30 am. It took a couple of double takes when I started looking at some of the key fundamentals in the market as it seemed my browser tabs were frozen in time as nothing seemed to change. Below are a couple of the key components that stuck out to me: Natty | the prompt month of the natural gas futures was basically the same as when I left where the July contract was just under the $3.00 mark. I did keep an eye on it as I was basking in the sun as it shifted down into the low $2.90 level only to rebound. Figure 1 | Natural Gas Prompt Month Daily Settle As we move forward, the breakthrough element ... » read more | |
| Wednesday Jun 27, 2018 | |
| Since the beginning of June, we have noticed the Mass Hub heat rate shifting between 9,000 and 12,000 MWh/Btu even with a similar amount of thermal generation on the grid. With Brayton Point retired, only smaller less efficient coal generation is left on the system which hasn’t seen much action yet this summer. While some oil was called on for the 18th, it was less than the oil generation at the beginning of the month and was unlikely to have caused the high print for the day. This points to differences in the gas stack driving summer heat rate volatility. Figure 1 | Mass Hub/AGT Implied Heat Rate While plant efficiency is a logical place to begin disecting the differences in natural gas generation, facilities in New England hover around the 7,500 Btu level with only a small ... » read more | |
| Tuesday Jun 26, 2018 | |
| For much of the past two years we have dedicated much of our time deciphering the issues around the Southern California gas market. The Aliso Canyon debacle combined with long overdue maintenance has created a perfect storm for a reliability concerns. Due to the anticipated scarcity issues, SoCal Gas delivered prices have jumped for this summer. PG&E values have made a similar move in sympathy with the southern part of the state. But the rise did not correspond to the rest of the curve. In fact the Q3 PG&E strip moved well above the Q1 2019 value providing ample incentive for natural gas storage operators to withdraw their gas inventory this summer. This is contrary to the demand trends for the Pacific Gas and Electric system. Due to space heating load the gas consumption ... » read more | |
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