Natural Gas in Underground Storage

The weekly EIA Natural Gas Storage Report advised today that there was a draw of 44Bcf from Underground Storage for the week ending 1/3/20.

This is 9Bcf below the forecast of a 53Bcf draw, the average prediction of sector analysts and traders in the Dow Jones Newswires weekly survey. This compares with a draw of 81Bcf last year and a 145Bcf draw for the five-year average. Storage is 521Bcf above last year for the same week and 74Bcf above the 5-year average. Working gas in storage stands at 3,148Bcf. (Read More ...)

Natural Gas Pricing


As of 9:57AM CST, February 2020, (the prompt month) Natural Gas was trading at $2.14, +$0.01 from one week ago and the 1-Year Spread average was $2.33, +$0.03 from one week ago.

Crude Oil Pricing


As of 9:32AM CST, February, 2020, (the prompt month) Light, Sweet Crude on the NYMEX was at $58.73, -3.84 from one week ago.

Crude Oil Inventory


US crude inventories (EIA)   increased by 1.2 million barrels to 431.1 million for the week ended January 3d, according to data released yesterday morning by the US Dept of Energy. Traders in the Reuters poll projected a decrease of 3.6 million barrels.

U.S. Rotary Rigs


According to the Baker Hughes Count, US Rotary Rigs targeting Natural Gas were -2 at 123 for the week ending January 3d and -75 from last year.

Rigs targeting Crude were -7 at 670. There are 207 fewer rigs targeting oil than last year. Canadian Rigs were -14 at 85 and -9 from last year. US Rigs drilling for oil remain at 84% of all drilling activity.

Geopolitical


The Key Distinction Between U.S. Energy Independence And Energy Security: As crude prices react to escalating tensions between the United States and the Islamic Republic of Iran, now is an important time to understand the key distinction between energy “independence” and energy “security” as the terms apply to the U.S.

In the wake of last week’s U.S. drone strike that killed Iranian General Qassem Soleimani and several compatriots as they were trying to exit Iraq through Baghdad International Airport, some media commentators and government officials attempted to allay public concerns about potential disruptions in oil supplies by claiming that the United States now enjoys energy “independence” from reliance on Middle Eastern oil thanks largely to the Shale Revolution. That is an overstatement of the situation.

While there is no doubt that the United States does enjoy a much higher degree of energy “security” thanks largely to the rapid increase in its own domestic oil production over the last decade, it continues to import crude oil from the Middle East. According to Energy Information Administration (EIA) data, the United States imported and average of roughly 1 million barrels of oil per day (bopd) from various Persian Gulf countries through the first 10 months of 2019, an amount that constitutes about 5% of overall domestic oil consumption.

Not surprisingly, that dependence on Persian Gulf crude has been on a distinctly downward trajectory in recent years. That trajectory decline has become steeper during the Trump Administration, falling from about 2.15 million bopd (mmbopd) in January 2017, the month President Donald Trump assumed office, to 1.5 mmbopd in December 2017 (Read More ...)

Weather

The AccuWeather 1-5 Day Outlook forecasts above-normal temps for the Eastern half of the US and a circle of area in the West. A strip from Arizona north to Montana and North Dakota is expected to be below-normal, with the balance of the country at normal temps.

The 6-10 Day Outlook forecasts above-normal temps for the the Eastern third of the US and the Gulf states including Texas. The Northern states from Michigan to Washington and adjoining states, as well as western California and all of Arizona are expected to be at below-normal temps with the balance of the country at normal temps.

The 11-15 Day Outlook forecasts above-normal temps for the Southeast of the country, from Maryland through Texas. Below-normal temps are expected from Michigan to the West Coast, including all of California and Arizona, as well as Northern New England. A swath of the US from New York and Pennsylvania to New Mexico are expected to be at normal temps. 

The 30-Day Outlook shows normal temps for  the entire US with the exception of a circle of states centered around Utah and the North-Central states, which are projected to be at below-normal temps.

The 90-Day Outlook shows above-normal temps for the  Eastern third of the country, as well as most of Texas. Below-normal temps are excepted for an area from Wisconsin to Idaho, south to Arizona and New Mexico. The West Coast and balance of the country are expected to be at normal temps. 

Severe Weather: Thunderstorms and tornados and flash floods are expected are expected for most of the Southeast through the weekend and flash flooding in South Texas and the balance of the Gulf states (Read More ...)

Sustainable and Renewable Energy   


US emissions fell 2.1% in 2019. Here’s why: The US saw a 2.1% fall in greenhouse gas emissions in 2019, according to a new report titled “Preliminary US Emissions Estimates for 2019” by independent research company Rhodium Group.
This was due to a decrease in coal plants, which resulted in an emissions drop of 190 million metric tons. The 2019 fall is good news, seeing how there was a rise of 3.4% in 2018. Further, renewables were up 6% in 2019. But the bad news is, it’s not enough.

There has been little progress in reducing CO2 in other sectors. For example, industry is now a larger source of emissions than coal-fired power, and growing. The report states:

Coal-fired power generation fell by a record 18% year-on-year to its lowest level since 1975. An increase in natural gas generation offset some of the climate gains from this coal decline, but overall power sector emissions still decreased by almost 10%.

Unfortunately, far less progress was made in other sectors of the economy. Transportation emissions remained relatively flat [drop by 0.3%]. Emissions rose from buildings [2.2%], industry [0.6%], and other parts of the economy [agriculture, waste, land use, oil and gas methane, etc. — 4.4%], though less than in 2018. All told, net US [greenhouse gas] emissions ended 2019 slightly higher than at the end of 2016.

At roughly 12% below 2005 levels, the US is at risk of missing its Copenhagen Accord target of a 17% reduction by the end of 2020, and is still a long way off from the 26-28% reduction by 2025 pledged under the Paris Agreement [which of course, the Trump administration withdrew the US from] (Read More ...)

This Week's Key Take-Away


Yesterday, Energy Secretary Dan Brouillette announced the launch of the Energy Storage Grand Challenge, a comprehensive program to accelerate the development, commercialization, and utilization of next-generation energy storage technologies and sustain American global leadership in energy storage. The Grand Challenge builds on the $158 million Advanced Energy Storage Initiative announced in President Trump's Fiscal Year 2020 budget request.

"Energy storage is key to capturing the full value of our diverse energy resources," said Secretary Brouillette. "Through this Grand Challenge, we will deploy the Department's extensive resources and expertise to address the technology development, commercialization, manufacturing, valuation, and workforce challenges to position the U.S. for global leadership in the energy storage technologies of the future."

The vision for the Energy Storage Grand Challenge is to create and sustain global leadership in energy storage utilization and exports, with a secure domestic manufacturing supply chain that is independent of foreign sources of critical materials, by 2030. While research and development (R&D) is the foundation of advancing energy storage technologies, the Department recognizes that global leadership also requires addressing associated challenges.

Recently, companies such as NRG (parent company to Retail Providers Reliant, Cirro and Green Mountain to name a few) have focused on electricity storage (batteries) instead of generators to satisfy the needs of peak events that can occur during extreme heat or cold weather. In Texas, "Peakers" - generators have seen early retirement, creating a shortage of electricity in peak times.