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Wednesday Feb 13, 2019   
If you have followed the West Power and Natural Gas markets over the past few years, California has received most of the limelight dating all the way back to the corroded rods tied to SONGS to the SCE Limit Constraint inflating SP15 prices compared to their counterpart (NP15) to the north.  Then the Renewable Portfolio Standard (RPS) drive filtered into the frey along with a Carbon market that 'taxed' anything omitting gases into the air, including natural gas-fired generation. Figure 1 | SONGS and California's Renewable Portfolio Standard Without going into a lot of detail, the removal of the SONGS Nuclear Facilities demanded natural gas to be burned for power within the LA Basin as the grid was not prepared for the removal of over 2 GW of baseload generation in the area.  The ... » read more
Tuesday Feb 12, 2019   
This has been a winter of extreme demand shocks for the Gulf region. It all started with an early start to winter back in November. As temperatures dropped to levels normally seen in December, the concerns about storage inventory drove Henry Hub cash prices to the highest levels on the entire curve at over $4.70. As the climate flipped from below back to well above normal the same cash product flipped from premium to discount on the NYMEX curve. A rout of the futures curve was on as the lack of heating demand wreaked havoc with the balancing. Cash prices lost $1.63 in just three weeks ending the year at $3.06. That took the Q1 futures down a dollar to $3.50.   Figure 1 | Q4 2018 Henry Hub Cash and Q1 2019 NYMEX The warm weather pattern stayed intact through much of ... » read more
Monday Feb 11, 2019   
Growing up, I remember watching television where a specific commercial had this pink bunny racing around beating a drum.  The commercial went on to detail how the bunny could outlast any other bunny that would be trying to play an instrument of sort.  Yes, it is no other than the Energizer Bunny, which was promoting the last-lasting company's battery. Figure 1 | The Energizer Bunny The picture above details the memories I have as the bunny was always decked out in some sort of flip-flops and sunglasses with a little energizer battery down by its tail.  Little did I know that prior to the Energizer Bunny, there was the original pink bunny across the Atlantic Ocean, known to many in England as the Duracell Bunny. Figure 2 | The Duracell Bunny The Duracell Bunny, pictured in ... » read more
Friday Feb 8, 2019   
After watching the commercials during the Super Bowl last weekend, I could not get the robot one out of my head as it tied into the theme of smart technology we touched on a couple of weeks ago.  At some point in our kids lifetime if not our own, the idea of robots and gadgets doing everything for you makes a lot of sense as you get consistency along with reliability in whatever needs to get done.  With technology comes massive amounts of data that can be analyzed by us as individuals or others trying to figure out the human behavior or better yet the tendencies of things such as supply & demand in the energy sector.   This brings me to what was hanging on my door when I got home, it was a brochure that was colorful and stated, "Meet Your NEW Smart Meter".  ... » read more
Thursday Feb 7, 2019   
Over the course of last year we saw a huge natural gas combined cycle buildout across the ConUS. Many of these facilities were built throughout the Marcellus shale region in order to take advantage of the cheap gas locally. However, the additions have begun to slow down with less than half the nameplate capacity expected for 2019. While the Marcellus buildout hasn’t quite halted, just under 2 GWs of the new builds are located within the PJM footprint. Approximately 1.4 GWs are being built in Pennsylvania near the heart of the new gas revolution. However, the geographic location appears to be more diverse with large facilities popping up in Florida and Louisiana. The additions to these two states alone comprise nearly half of the planned combined cycle additions. Figure 1 | Natural ... » read more
Wednesday Feb 6, 2019   
The cold weather is locked in across Western Canada and the Pacific Northwest for the next two weeks.  This alone is enough to shift the natural gas rescom demand to levels that make the pipeline balances tough on a daily basis.  When you factor in the power loads are shifting up and the marginal megawatt is moving higher in the supply stack, the burden is pushed onto the natural gas-fired generation across the grid.  Since the Pacific Northwest is a net exporter of power on most days, times like these does not warrant more power burns per say as the Midc just needs to price itself high enough to keep the megawatts as home instead of flowing down into California on the AC or DC interties. Figure 1 | CAISO Day-Ahead Transmission Flows - Hourly In the figure above, the top ... » read more
Tuesday Feb 5, 2019   
Back in the day when natural gas production was tied mainly to the Gulf of Mexico, the pipeline infrastructure was a one-way street as the deliveries moved gas out of the Mississippi, Louisiana and Texas up to the Northeast via Texas Eastern, Tennessee Gas, Transco, Columbia and Texas Gas pipelines.  After a couple of massive hurricanes ripped through the Gulf of Mexico and the new development of shale gas 10 years ago, the Marcellus/Utica production basin in the Northeast portion of the United States was the focal point of all discussions within the natural gas sector.  Such discussions led to the each one of the pipes mentioned above to reverse its compression and flow gas bi-directionally to where the less expensive and more reliable shale gas can makes its way back down into ... » read more
Monday Feb 4, 2019   
As the Western portion of the US watched the news last week tied to the Polar Vortex, it was hard to imagine just how cold it really was as some places saw temperatures drop to minus 50/60 degrees with the wind chill factor.  This weekend was a little different as the warmer weather returned to the grid as the Midwest saw a 100 degree swing as highs were around 40 degrees.  In the Ohio Valley, the daytime highs moved up to 60 degrees on Sunday, which made for a nice day to be outside. In the Northeast, the Patriots fans who did not make the trek to Atlanta, were able to tailgate prior to the Super Bowl, where they were trying to go for their 6th title under their current coach and this quarterback by the name of Tom Brady.   The tide has turned, where anyone east of ... » read more
Friday Feb 1, 2019   
The stories and images over the past couple of days tied to the Polar Vortex that moving through the central part of Canada, the Midwest and down into the Ohio Valley and Southeast  have been nothing short of astonishing.  Especially when you see the ice formation on Lake Michigan  or across streams that have a hard time freezing over even in the heart of winter. Figure 1 | Lake Michigan/Chicago Skyline - Polar Vortex Last Two Days When I talked to my sister, who lives in Minneapolis, she mentioned that is was minus 62 degrees at the time we were on the phone.  This included the wind chill element of the actual feel outside and was one of the coldest levels on record.  She told me not to worry as the forecast was calling for the daytime highs to be up to 42 ... » read more
Thursday Jan 31, 2019   
While the past week was a brief reprieve from the formidable winter weather, the polar vortex has finally reared its ugly head as temperatures dropped down into the negatives throughout parts of the Midwest and the Northeast. Chicago was even predicted to be colder than Mount Everest base camp with a high of just -12 degrees. The strong winds from the storm further exacerbated the cold causing the National Weather Service to issue a warning with frostbite possibly setting in after 5 minutes of exposure to the expected -51 degree wind chill. In order to counteract the dangers of the arctic blasts, many public schools closed keeping children from venturing into the blizzard. Figure 1 | Thursday Temperature Anomaly With the cold spell dropping into the PJM footprint, the ISO has fared ... » read more
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