Natural Gas in Underground Storage

The weekly EIA Natural Gas Storage Report advised today that there was a withdrawal of 177Bcf from Underground Storage for the week ending February 15th, 2019.

This is 9Bcf above the median forecast of a 168Bcf withdrawal, the average prediction of sector analysts and traders in the Dow Jones Newswires weekly survey. The withdrawal compares with a withdrawal of 124Bcf last year and 145Bcf for the five-year average. Storage is 73Bcf below last year for the same week and 362Bcf below the 5-year average. Working gas in storage stands at 1,705Bcf. Thanks to lower natural gas prices, coal-to-gas switching is back above the norm. Read more ...

Natural Gas Pricing


As of 10:38AM CST, March 2018, (the prompt month) Natural Gas was trading at $2.68, +$0.07 from one week ago and the 1-Year Spread average was $2.85, +$0.05 from one week ago.

Crude Oil Pricing


As of 10:38AM CST, March, 2018, (the prompt month) Light, Sweet Crude on the NYMEX was at $57.04, +$3.53 from one week ago. The EIA has announced that 2018 was a record-breaking year for crude production and that 2019 and 2020 will be even higher.

Crude Oil Inventory


US crude inventories increased by 3.7 million barrels to 454.5 million barrels for the week ended February 15th, according to data released this morning by the US Department of Energy. Traders in the Reuters poll projected an increase of 3.1 million barrels.

U.S. Rotary Rigs


U.S. Rotary Rigs drilling for natural gas were -1 at 194 for the week of February 15th. The number of rigs currently drilling for Natural Gas was +17 from last year. US Rigs drilling for oil were +3 at 857. There are 59 more rigs targeting oil than last year. Canadian rigs were -16 at 224 for the week. Rigs targeting oil increase to 82% of all US drilling activity.

Geopolitical


Should California bail out PG&E? The scary word every Sacramento politician wants to avoid is “bailout” — as in bailing out unpopular Pacific Gas & Electric Co.

It’s a dilemma because PG&E is universally, if quietly, seen as too big to fail. It’s too important and vital. It provides natural gas and electricity for 16 million people — 40 percent of the state — throughout northern and central California.

But the utility’s laxly maintained equipment has caused many devastating wildfires. So facing what it estimates to be $30 billion in potential liabilities for fire losses, PG&E has filed for bankruptcy.

The utility didn’t help its public image recently by asking the bankruptcy judge for permission to spend $130 million on employee bonuses and other perks. Meanwhile, burned out victims of the Camp fire are struggling to find shelter.
The state certainly doesn’t want to take over PG&E and go into the business of supplying gas and electricity. Read more ...

Weather

The AccuWeather 1-5 day Outlook forecasts above-normal temps for the Eastern 1/3 of the US, with the Western at below-normal temps. Normal temps are forecast for a center strip from Wisconsin to Texas. The 6-10 Day Outlook forecasts the Southeast at above-normal temps with balance of the country at  at below-normal or normal temps.

11-15 Day Outlook  forecasts a similar picture to the 6-10 day Outlook except that Texas will be below-normal . The 30-day Outlook below-normal temps for the North-Central states and New England. The balance of the country is forecast to be at normal or above-normal temps.

The 90-Day Outlook projects normal temps for the entire country, with the exception of the far Northwest, which is expected to be at above-normal temps. A Winter storm stretching across much of the US has brought rain, snow and ice across the South, Midwest, Mid-Atlantic and southern New England this week. Over 2000 flights have been cancelled.

Sustainability and Renewables


A new report on clean energy innovation headed by two of the world’s leading energy experts assesses the state of the clean energy innovation ecosystem in the U.S. and identifies clean energy technologies with the highest breakthrough potential:

The report—led by former U.S. Secretary of Energy and Energy Futures Initiative founder, Ernest J. Moniz and IHS Markit vice chairman Daniel Yergin—evaluates ways to maintain U.S. leadership in clean energy innovation by better aligning the policies, players and programmes that will drive technologies that can keep the nation globally competitive.

The report, entitled Advancing the Landscape of Clean Energy Innovation, was commissioned by Breakthrough Energy.
The report assesses energy technologies based on four criteria—technical merit, market viability, compatibility with other energy systems and consumer value.

The report identifies the key innovation pathways that are necessary to maintaining U.S. leadership in clean energy. Among them: increased and better targeted public investment across all stages of innovation—from fundamental research through commercial scale demonstration; a research and investment portfolio embracing multiple technology options; and a strengthened role for states, cities and tribal governments in the innovation process.

The report also finds that disciplined public-private partnerships are needed across the innovation value chain and recommends that the private sector step up its innovation investment from the savings created by the 2017 tax cut law, with a particular focus on testing facilities for product demonstration. Read more ...

This Week's Key Take-Away


Tight power-supply conditions in Texas will be even tighter with January’s news that another baseload power plant is to be mothballed. Five coal plants in Texas were taken off the grid last year, and the loss of a 470-megawatt plant north of Houston is set to push next summer’s reserve margin down to 7.4%, well below the minimum required to maintain reliability.

PJM, the nation’s largest regional grid that serves 65 million customers in 13 states from PA to IL, is facing some of the same reliability problems from the shutdown of dozens of coal plants and several nuclear plants.

The permanent shutdown of coal and nuclear plants in the years ahead — and the loss of electricity reliability —may push a perilous situation into a full-blown crisis. Much of the nation’s remaining coal fleet and more than one-third of the nuclear plants are at risk of being shuttered in the next 15 years or sooner.

According to the EIA, solar and wind power this year will account for nearly 2/3 of the new additions to the U.S. electricity system, surpassing additions from natural gas.

That said, many electric utilities are investing heavily in utility-scale batteries to store electricity. These batteries will offset “peakers”, natural gas or coal-fired generators that are only activated in the event of the grid not having enough electricity to supply the demand.

Additionally, with the cost of battery tech dropping, it is foreseeable that in the not-too-distant future, individual business homeowners will have their own batteries to store cheap electricity that they purchase during off-peak hours, as well as generate from their own rooftop solar systems. We continue to carefully watch the timing of these issues.