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| Thursday Feb 21, 2019 | |
| Massachusetts introduced a state carbon policy in 2017 to limit in state generator emissions. When we initially looked at this issue in the Northeast Mass Carbon market flash, the actual emissions from 2017 exceeded the limits set forth for 2019 and 2020 by a significant margin. The tide appears to have turned with the emissions over the course of 2018 taking a significant dive. However, what appears too good to be true usually is. While well intentioned, there were no controls put in place that would account for brown energy flowing over the transmission lines. Massachusetts appears to have asked the question, “Why kick the can down the road, when you can toss it over the fence?” Actual emission from 2018 fell dramatically with over a 2 million ton reduction in carbon ... » read more | |
| Wednesday Feb 20, 2019 | |
| The past few weeks in the Pacific Northwest have given everyone a glimpse of what a winter in the Midwest, Ohio Valley, Northeast is like as the temperatures are sitting well below normal from Alberta down through Oregon/Idaho and parts of Northern California. The conversation has been all about the marginal gas molecule as the pipeline infrastructure has been hit with issues stemming from the Aliso Canyon storage facility to the pipeline capacity touching Socal Gas's system. When you throw in the fact that the Enbridge pipeline up in Canada is hindering normal gas flows down into Washington/Oregon via the Sumas compressor and the strain on the power plants on Northwest pipeline (NWP) it is no wonder the molecule has taken front and center stage. Behind the scenes, the Pacific ... » read more | |
| Tuesday Feb 19, 2019 | |
| Coming into this winter, many had assumed that natural gas production volume would continue its upward climb. The early spike in prices at the beginning of the withdrawal season combined with an abundance of company guidance suggested that it was possible to see a 10% increase in total volume from Q4 into Q1 2019. That should have put the total over 89 BCF per day prior to the start of the injection season. But it has not played out that way. Production volumes have been a big disappointment falling from 88 to 86.5 BCF. The warm climate during December and January may have overshadowed the production drop this year but this will come back into the spotlight as we start the refill season. Figure 1 | Lower 48 Production Volume The spike in winter prices heading into the season should ... » read more | |
| Monday Feb 18, 2019 | |
| Over the years, I have been traveling to San Diego for leisure, work commitments and soccer tournaments. We usually are on the north side, heading past La Jolla and ending up near Del Mar or slightly inland near Rancho Bernardo. On many occasion there has been some news article in the local paper that compares San Diego to that of Portland, OR. The range of topics included the urban downtown development, bike lanes, public transportation and last but not least the micro-brew scene. Over the past 3-4 years, the San Diego breweries have gained national recognition starting with Ballast Point taking their bottled beer nationwide along with Stone Brewery making what I call the Taj Mahal of dining as the indoor/outdoor eating areas are truly amazing. There ... » read more | |
| Friday Feb 15, 2019 | |
| With the colder weather in Western Canada and the Pacific Northwest well documented over the past couple of weeks, the natural gas pipeline infrastructure has been on high alert via the pipeline critical notices known as OFO's. Figure 1 | Portland Temperatures - Actual and Forecast This alert system extends all the way down into Southern California as SoCal Gas's system has been tight ever since the Aliso Canyon valve leak as well as the limited transport capacity from the Desert Southwest via its North Zone. As a result of the SoCal Gas issues, the Westcoast Pipeline explosion and the lingering cold weather across the west, the other storage facilities are feeling the pain as we speak. For example, this week Northwest Pipeline (NWP) sent out a notice that stated ... » read more | |
| Thursday Feb 14, 2019 | |
| The Northeast has had a wild ride throughout late winter. While early winter was relatively mild, entering the second half of January erratic weather patterns shifted throughout the region. An initial burst of cold drove down temperatures, the reaction by energy markets was short-lived. Just after the extreme cold hit the region a warm low pressure system from the South engulfed the Northeast thawing out the accumulated snow and softening energy prices. The polar vortex in late January resulted in freezing conditions reaching wind chills in the -50 to -62 degree range in the Midwest which can result in frostbite in as little as five minutes. The high pressure system eventually made its way towards the Coast causing a precipitous drop in temperatures throughout all the regions it ... » read more | |
| 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 | |
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