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Tuesday Apr 6, 2021   
The Lower 48 natural gas balancing still has some seasonal heating load in the mix for the next few days. But by the end of the week the total ResCom demand is expected to fall from the present 21 BCF per day down to 14 BCF per day. This drop off will accelerate the storage refill injections all over the continent. Presently the EIA is reporting 1.76 TCF of inventory in the caverns across the United States. Based on current supply/demand fundamentals the end of October inventory is expected to post near 3.65 TCF. That is within the range of normal and is considered adequate for a normal winter heating season.  Figure 1 | Lower 48 ResCom Demand Cash prices have remained resilient this Spring in the wake of the Texas Energy event in February. At its height Henry Hub cash posted $23 ... » read more
Monday Apr 5, 2021   
There is a saying that goes like this, "don't cry over spilled milk", which means do not spend time worrying about things of the past that cannot be changed.  This holds true in the Pacific Northwest this time of year as the first week of April has the Lower Snake river system starting their mandated fish spill requirements.  Such spill happens every year like clockwork where the only thing that is in question is tied to the volume that moves away from the turbines and onto the spillway. Figure 1 | Hydro Facility Spillway The fish vs. economics has been a constant discuss in the Pacific Northwest for decades where the old-school technical management team (TMT) meetings were held in downtown Portland the USACE building where the fish agency representatives were seated along side ... » read more
Friday Apr 2, 2021   
On Thursday of this week the wires lit up with news of President Biden’s $2.3 trillion infrastructure plan. The plan “would supercharge an already booming clean-power sector by expanding subsidies and addressing key bottlenecks impeding the shift to a greener grid” according to the Wall Street Journal. Biden wants to produce 100% carbon-free electricity by 2035 (I’m pulling for you, Joe, but I’ll take the “over” on 2035 for 100%). While it is easy to get caught up in the giddy enthusiasm of green energy supporters, there is also a palpable sense that we’ve seen this movie before. Remember the election of Barack Obama twelve years ago? There was that distinctive ‘hopey changey’ vibe swirling around. Conferences were packed to the ... » read more
Thursday Apr 1, 2021   
No joke: we made it to April 1.  If you’re a baseball fan you regard this as day as the official start to summer.  It is also the start of the gas market’s “summer”, contracts spanning April through October.  While this conjures warm thoughts of shorts, flip flops, and backyard barbeques, the reality for most people north of the 36th parallel is there are still several more weeks till you can safely pack your down jackets away.  For those in the Rockies and Western Canada, it’s the start of mud season: that sloppy interlude when the snow is not good enough to ski, but the ground is not yet dry enough to do anything with, either.  Image 1 | April 1 is baseball's opening day, which many regard the start of summer.  But the grass ... » read more
Wednesday Mar 31, 2021   
As a kid, one of the enjoyments of rummaging through the Sunday newspaper was to get to the comic section where one of the frames on the front page was dedicated to two images that on first glance looked identical but then the caption read 'can you find the x differences in the two images provided?'  This is where the competitive nature in me kicked in at an early age as I sat there and stared at both until the little nuances were found and discussed amongst other family members.  At times, there was a distinct competition to who could find the differences fast where the reward was to have the other person do one's chores the upcoming week. Figure 1 | Spot the Differences? In the energy space, a snapshot picture of market conditions changes from day to day so the pertinent ... » read more
Tuesday Mar 30, 2021   
Outside of two weeks in February the Eastern United States has kept the above normal trend intact and this past weekend was no exception. It was the warmest three day stretch since October of last year with many cities posting daytime highs in the mid 70's. The warm weather has also brought a season low for residential and commercial heating load across the region forcing many pipelines to start the storage refill process a few weeks earlier than normal. Caverns all over the Midwest, Eastern Canada and Northeast injected volumes for the first time this year. As a result of the low demand conditions cash prices at delivery hubs also fell to season lows.   Figure 1 | EIA East HDD Count for Nov 1 - Apr 15 Transco Z6, TETCO M3, Algonquin and Dominion South all fell to ... » read more
Monday Mar 29, 2021   
Now that we are over a full year into the Pandemic lockdown situation, the day of week or time of day gets lost in the shuffle as one's routine is to work out of a home office and look at a calendar that is full of conference calls with clients and internal meetings.  In the old days, the former would be balanced with in-person trips or conferences where golf or some other activity would be interwoven with a nice meal and guest speakers on certain topics in the power and natural gas space.  The latter would be tied to a conference room meeting or a Friday lunch where everyone would get together and discuss what the weekend plans looked like as well as picking a topic of conversation around the energy space that would educate the younger analysts dipping their feet in their ... » read more
Friday Mar 26, 2021   
The beginning of 2021 has been a volatile time for renewables across the country.  A mild end to 2020 and beginning to the New Year gave way to frigid temperatures and copious snowfall in the form of Winter Storm Uri in mid February.  Snowfall from the storm reached over 70% of the US mainland, impacting energy markets from both a demand and supply perspective.  The effect on renewables was considerable: blades from wind turbines iced over, snow blanketed solar panels, and storm clouds kept the sun’s rays from reaching the earth.  The storm’s impact was felt most severely in ERCOT in Texas, but made itself known throughout much of the nation.  Every storm must end, however, and as Uri melted away it brought more change for renewables.  Just ... » read more
Thursday Mar 25, 2021   
The renewable landscape tied to wind generation in SPP and ERCOT this month has been quite impressive from a potential capacity perspective as both have seen record numbers consistently throughout.  The definition of potential capacity mentioned is the summation of the actual generation from a renewable resource and the curtailed amount that occurs as the grid operators have to balance on a system and local level.  Over the years, we have migrated from the cumulative generation capacity to that of potential capacity as the should season can get a bit tricky and deceive market participants of what is to come during the months when there is enough power demand to find a home for all the renewable resources.  We discussed the curtailment situation in SPP, ERCOT and CAISO in ... » read more
Wednesday Mar 24, 2021   
It may not feel like it to Albertans with snow still covering large swaths of the province, but summer - from a gas market perspective - is just about here.  The AECO gas market is poised to flip to steady net injections over the next couple of weeks, and the current cash premium over near-term futures is likely to invert.  Near-term daily fundamentals point to a weakening of provincial gas demand and exports. Longer-range, this is the time of year the AECO market gets longer as provincial production does not start backing down for spring breakup until the end of April/early May, but demand and exports wane with seasonality. This can be seen in Figure 1, where the top row shows how production holds fairly constant until the end of April. The next three rows show demand in the ... » read more
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