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| Wednesday Dec 7, 2022 | |
| In November 2022 blue was the dominant color in the forecast for the west coast. Both the Pacific Northwest and California saw a significant increase in heating degree days over the 5-year average for the month. This was an extra chill on top of already falling normal temperatures as we move closer to winter. As we enter December, there is even more blue on the horizon for both regions. In one of our latest CAISO market flashes, ‘The Natural Gas Landscape – Cali Conundrum’, we discussed how the increased demand for the Pacific Northwest means fewer megawatts on the ties coming into CAISO. With imports lacking and nuclear outages tied up in refueling, CAISO felt thankful for their thermal stack this November as much of the difference was made up by burning more natural ... » read more | |
| Tuesday Dec 6, 2022 | |
| This winter was supposed to be different. Just six months ago the natural gas market was struggling with a bevy of bullish factors that were expected to cause record high prices to last through this winter. The winter NYMEX HH futures strip was priced at $9. Storage was expected to enter the withdrawal season at only 3.1 TCF, almost 1 TCF below capacity. Power burns from electric generation were at the highest levels in history despite the soaring prices. And the comparative price signal from Europe to North America suggested these record high prices were still the best value on earth. But then all these sentiments started to turn with the loss of the Freeport LNG export facility. The back up of 2 BCF of intended feed gas into the Gulf had an immediate effect on storage ... » read more | |
| Monday Dec 5, 2022 | |
| The renewable sector continues to take front and center in the California, Texas and Central Midwest power markets as CAISO has its battery fleet while ERCOT and SPP are deep into wind capacity growth over the years. We cannot forget about the solar influx seen with both behind-the-meter and industrial growth in CAISO while ERCOT is now taking on its own harvesting of the sun’s rays. At the end of the day, the renewable sector is keeping everyone on their toes as it creates volatility around the balancing act; to which the marginal megawatt comes into play as the market fundamentals are discussed amongst market participants. Figure 1 | ERCOT Net Load Actuals and Forecast – Hourly As part of the EnergyGPS eCommerce packages, we offer individuals interested in ... » read more | |
| Friday Dec 2, 2022 | |
| The US natural gas pricing environment has softened a bit over the past couple of months, but it was not too long ago that double digit prompt month ticks were part of the daily conversation. In other parts of the world, they wish their natural gas price was in price range but with the push for renewables, coal retirements and now the Russia/Ukraine war, the fact of the matter is Europe went into the winter with high prices and concerns over not having enough if the weather turns cold, let alone extremely cold. The massive natural gas spreads that have extended over the Atlantic have led to the US now fully invested in the liquified natural gas (LNG) sector with the first wave of facilities up and running and an incremental 6.5 BCF of nameplate capacity under construction and ... » read more | |
| Thursday Dec 1, 2022 | |
| As we officially take our first step into December there are changes aplenty taking place across the country as the air grows brisker and yuletide carols blaring over the car radio. Taking a walk around the neighborhood at night I see more and more houses adorned with lights and the bright colors shining out through living room windows from newly decorated trees. Millions of folks all across the country will be feeling the holiday cheer as I did this past weekend when I rummaged around in the basement for last year’s strings of lights, unfurled them and plugged them in to find half the lights were not working, spent an hour trying to identify the one or two defective bulbs before chucking the whole string in the bin and heading over to Home Depot to buy a new ... » read more | |
| Wednesday Nov 30, 2022 | |
| The SPP market continues to deal with its fair share of wind generation, especially when compared to the overall demand across the North and South region. As far back as October, the system operators have resorted to renewable curtailments to balance their grid often. The block of hours that have less exposure to such curtailments are those associated to high demand which in the winter usually is tied to colder weather moving through the central vertical third of North America. In recent weeks, the SPP grid has also seen the two nuclear units return to full capacity as their respective refueling maintenance period has ended, adding roughly 2.0 GWa of baseload energy that falls in the ‘must run’ category. Over the long holiday weekend, SPP’s ... » read more | |
| Tuesday Nov 29, 2022 | |
| Over the past decade PG&E has made a number of changes to reduce operating costs on their gas distribution system in order to fund the growing costs attributed to renewables transition as well as the most recent bankruptcy settlement. Some of those decisions included the retirement of two gas storage fields at Los Medanos and Pleasant Valley as well as the reclassification of 51 BCF of working gas over to base gas. The retirements and reclassifications were done in the aftermath of the Aliso Canyon rupture in Southern California which has forced more reliance on import pipeline capacity to meet the natural gas demand needs in Northern California. The decision to remove of gas storage capacity has now come home to roost as PG&E has not only entered into the withdrawal ... » read more | |
| Monday Nov 28, 2022 | |
| The month of November flown by rather quickly as December 2022 is right around the corner. If you lived in Western Canada or the Pacific Northwest portion of the Lower 48, you have dealing with well-below normal temperatures throughout and the last few days of November are no different. In fact, we see the start of December to look like that of November as Mother Nature is continuing the trend of brisk overnight lows across both regions and extending into the Rockies and Northern California. This is going to keep the balancing act around molecules and megawatts quite interesting as the systems that once delivered power to other regions will be pricing themselves to keep the units at home. Figure 1 | Chilly November/Start of December 2022 Starting with natural gas, all trading ... » read more | |
| Wednesday Nov 23, 2022 | |
| Last Friday, the EPA announced a decision to deny General James M Gavin Power Plant an extension to continue disposing waste in an unlined coal ash pond. Located in Ohio and serving PJM, the plant is the ninth-largest coal plant in the country with a capacity of 2,680 MW. The decision comes from EPA’s Coal Combustion Residuals rule which aims to protect groundwater from contaminants, such as mercury and arsenic. Plants were given until April 11, 2021 to cease waste disposal in these ponds or upgrade their management by using lined ponds, closing unlined ponds, and monitoring groundwater contamination. Over 50 plants filed for an extension and the Gavin decision is one in a string of decisions from the EPA over the last several months. Figure 1 | General James M Gavin Power Plant in ... » read more | |
| Tuesday Nov 22, 2022 | |
| For the past months there has been plenty of talk about how natural gas prices have surpassed the price of ethane, a natural gas liquid, in MMbtu terms. While there is no perfect substitutability between the two fuels there are scenarios where natural gas can be switched out as a feedstock in industrial applications in lieu of ethane. On the supply side it becomes more profitable for NGL fractionators to bleed ethane into the natural gas pipeline stream when the economic incentive exists like it does today. The ability for ethane to be supplemented in the storage balancing puts ethane on the margin in those areas where the fractionators enjoy the optionality of the natural gas stream. Figure 1 | December Mont BV Ethane and NYMEX NG HH Settles for Aug-Nov 2022 Currently the natural ... » read more | |