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Tuesday Apr 16, 2019   
We have heard a great deal of the associated gas production in the Permian Basin. The jump in natural gas volumes has stripped out the take away capacity leading to a catastrophic drop in cash gas values throughout the Southwest United States. Associated gas production increases are not confined to just the Permian Basin. The Bakken basin in the Dakotas has also seen its boom in volumes. And because it has its own pipeline capacity constraints it is causing a big change in the way Canada is exporting natural gas from Alberta into the Upper Plains. Northern Border Pipeline is a good representation of these issues. Over the past two months production has increased by .2 BCF per day and because that volume has already been utilized by upstream production in Canada the only outcome ... » read more
Monday Apr 15, 2019   
Last year at this time, ERCOT's summer months were on everyone's radar screen as the start of the New Year reinforced the fact that the coal retirements throughout the state were going to have an impact on the marginal cost of electricity once the electrical demand kicks in.  In fact, we wrote a couple of articles on how the 'Eyes of Texas are upon you all the live long days...'  As it turns out, the grid operations were able to manage the system as the implied heat rates in the forward curve were telling every natural gas fired generated to be online.  As we got into the actual 'dog days of summer' months, all eyes quickly turned to the wind generation on the grid as Mother Nature would need to step up to keep the real-time markets from venturing into scarcity pricing ... » read more
Friday Apr 12, 2019   
It is not uncommon for the key river across the Upper Midwest to flood in the spring time as the snow makes its way down the iron range slopes in Northern Minnesota or the several feet of accumulation that sits in North Dakota near the Red River.  If you have every been to Fargo, ND or north to Grand Forks in the spring, it is likely that you have seen the banks of the river overflowing to a point that the both city downtown areas are underwater and everyone is scrambling to try an keep the rising water levels from entering their business or residential dwelling. Figure 1 | Red River Flooding  As you makes your way east of Fargo, you start to get into the Mississippi River territory where the added water can be seen causing issues downstream as you start to get into Iowa and ... » read more
Thursday Apr 11, 2019   
Pennsylvania is currently considering a bill that would subsidize nuclear generation which we touched on in our previous newsletter. It appears that the seeds have grown roots as a companion bill was also introduced to the State Senate earlier this week. The Senate version of the bill, SB 510, mimics most of what was set forth in the original house bill, but will require energy sources purchased be between 17-23% be from non-nuclear generation like wind and solar. Legislative representatives continue to debate the merits of the bills citing economics on both sides. With only a couple months before the Three Mile Island begins its decommissioning process, time is critical if the proposed legislation will save the unit from retirement. Taking a look at the nuclear fleet’s ... » read more
Wednesday Apr 10, 2019   
If you live in the Midwest, you are scrabbling to get your sleds back out of the garage attic as Mother Nature is preparing to drop its second 'bomb cyclone' throughout Minnesota, Wisconsin and other states in the region.  This type of weather patter occurred around last year at this time as the Lower 48 was in the midst of one of the coldest April months on record.   Figure 1 | Mother Nature and her 'Bomb Cyclone' In fact, some forecasters are calling for up to 30 inches of snow in parts of Wisconsin just east of Minneapolis.  This should continue to create flash flooding within the region so once the sleds are put away after this week for the final time, it will be time to take out the paddle board or canoe. Speaking of weather and sledding, if you have ... » read more
Tuesday Apr 9, 2019   
Canada has had a history of reliable natural gas supply to the United States. Much of the natural gas infrastructure north of the border is specifically designed to take advantage of the well developed markets in the States. It was just two summers ago when the pipeline flows set a new record but this year will be very different. There are a number of factors that have turned the tide and should drop the net flows at almost every major interface. Over the next seven months the drop in volume will have a net effect of over 100 BCF on the US Supply/Demand balancing compared to last year's totals.   Figure 1 | Total Net Pipeline Flows from Canada to the Lower 48 There are a number of factors and challenges that will shift the pipeline supply. Some of these are structural ... » read more
Monday Apr 8, 2019   
The end of March and the beginning of April is a time when baseball migrates from Spring Training to that of filling the major league ballparks for opening day.  The season represents that spring is officially here and that it will not be long before school is out and summer is upon us.  if you grew up around baseball, it is time to bring the gloves out and throw the ball around prior to watching your team play.  If you get the chance to take in a Milwaukee Brewers game, allocate a couple of hours prior to the game so you can enjoy the tailgating festivities.  It is like no other in all of baseball.  Yes, there are teams with deeper history and championships, but the memories as a kid go beyond the World Series as it is a time to throw on that jersey of your ... » read more
Friday Apr 5, 2019   
Earlier in the week, TETCO posted an EBB notice that the force majeure initiated on January 21 has been lifted immediately. Back when the rupture happened, the pipeline cut southbound capacity from the Berne compressor by .6 down to 1.6 BCF. I just checked the capacity posting on the pipe and they have already moved the rating back up to 2.2 BCF. Flows are still nominated at 1.6 BCF.   Figure 1 | TETCO EBB Notice Posted April 2 Even with the most recent cash basis postings from Dominion South to Henry Hub printing in the minus 25 cent range, we should see the full capacity of this pipe get utilized as we roll into the second week of April. That would be a .6 BCF diversion from the DTI storage complex.  Figure 2 | TETCO Southbound Nominations for April ... » read more
Thursday Apr 4, 2019   
The weather throughout New York has stayed in a relatively comfortable range after the cold spurt at the beginning of March. Generation saw these low demand level as a good time to go offline with both the Nine Mile Point 2 and the Indian Point 3 nuclear units taking refueling outages. However, it appears that complications arose at Indian Point as unit 2 also tripped offline. With conspicuous timing, the unit began to ramp back up on April 1st. The following day output continued to increase throughout the morning, but it tripped back offline midday despite an appearance in the day ahead market for April 3rd. While surely not intended as a joke, the blip on the radar had many thinking that the generator would finally make its way back online. Taking a look at Figure 1, we can see the ... » read more
Wednesday Apr 3, 2019   
When you think of California, the beaches, Hollywood, Disneyland and Alcatraz all come to mind.  If you have ever visited the state, rented a car and drove through Los Angeles or San Diego on I-5 during rush hour, you quickly have images of congested highways and horns honking as you figure out which exit to take.  If you have the pleasure of talking to a local commuter and hear the drive time stories, you really understand how bad the congestion can get at times. Figure 1 | California's Congested Highways   The congestion image above is a good visualization of what it is like on any given day inside the Golden State.  it also gives you a visualization of what the CAISO power grid looks like when there is to much energy pointed down a transmission line and ... » read more
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