Natural Gas in Underground Storage

The weekly EIA Natural Gas Storage Report advised today that there was a draw of 73Bcf from Underground Storage for the week ending 12/6/19.

This is 1Bcf below the forecast of a 74Bcf draw, the average prediction of sector analysts and traders in the Dow Jones Newswires weekly survey. This compares with a draw of 75Bcf last year and a 68Bcf draw for the five-year average. Storage is 593Bcf above last year for the same week and 14Bcf below the 5-year average. Working gas in storage stands at 3,518Bcf. (Read More ...)

Natural Gas Pricing


As of 8:26AM CST, January 2020, (the prompt month) Natural Gas was trading at $2.28, -$0.17 from one week ago and the 1-Year Spread average was $2.29, even with one week ago.

Crude Oil Pricing


As of 8:34AM CST, January, 2020, (the prompt month) Light, Sweet Crude on the NYMEX was at $58.93, +0.30 from one week ago.

Crude Oil Inventory


US crude inventories (EIA) increased by 0.8 million barrels to 447.9 million for the week ended December 6th, according to data released yesterday morning by the US Dept of Energy. Traders in the Reuters poll projected an decrease of 2.8 million barrels.

U.S. Rotary Rigs


According to the Baker Hughes Count, US Rotary Rigs targeting Natural Gas were +2 at 133 for the week ending December 6th and -65 from last year.

Rigs targeting Crude were -5 at 663. There are 214 fewer rigs targeting oil than last year. Canadian Rigs were +12 at 138 and -48 from last year. US Rigs drilling for remain at 83% of all drilling activity.

Geopolitical


The volume of US natural gas that was reported as vented and flared reached its highest average annual level of 1.28 Bfc/D in 2018, according to a new report from the US Energy Information Administration (EIA).

In 2018, the percentage of US natural gas that was vented and flared increased to 1.25% of gross withdrawals, up from 0.84% the previous year. The EIA said that two states, North Dakota and Texas, accounted for 1.1 Bcf/D, or 82% of the reported US vented and flared natural gas.

As crude oil production outpaces the build-out of infrastructure to handle natural gas, associated gas has been increasingly vented and flared in order to manage the undeliverable natural gas production from flowing oil wells. The EIA said that state agencies are largely responsible for regulating natural gas venting and flaring by imposing restrictions and natural gas capture requirements.

Texas and North Dakota accounted for 51% and 31%, (ed. note- over 900 million dollars) respectively, of the total US vented and flared natural gas. The EIA said that both states are working with producers to limit the need for flaring without shutting down or affecting production of crude oil from new wells. Venting is banned in North Dakota and restricted in Texas.

Production grew five-fold between 2010 and 2018 in the Bakken shale play grew 500%, reaching approximately 1.5 million BOPD. During this time, natural gas producing plant capacity has not kept pace with the amount of associated gas being produced from oil wills. In 2018, North Dakota flared 0.40 Bcf/D, 17% of the total natural gas gross withdrawals in North Dakota and the highest percentage share of any state (Read More ...)

Weather

The AccuWeather 1-5 Day Outlook forecasts above-normal temps for most of the Western half of the US, the Northeast and Southeast. The North Central states are expected to be below-normal and the balance of the country is expected to be at normal temps.

The 6-10 Day Outlook forecasts above-normal temps for the the Western half of the US and a circle surrounding Kentucky. New England and the area just south of Lake Superior 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 entire country with the exception of the West Coast, Florida and New England, which 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 normal temps for the  entire country at normal temps except for the Southern tip of Florida, Oregon and Washington state, which are expected to be at above-normal temps. Additionally, the Great Lakes area is expected to be at below-normal temps.

Severe Weather: Much of the country will see moderate precipitation over the next week, with temperatures in the 20's and 30's in the North. The Northwest and North Central states should see 1-6 inches of snow beginning today. One notable matter is that the Great Lakes are at near-record levels, which could spell coastal erosion and significant flooding this winter (Read More ...)

Sustainable and Renewable Energy   


First US steel plants powered by wind and solar energy are coming for industry with big carbon footprint: The steel industry has a massive carbon footprint, as much as 6% to 7% of the world’s greenhouse gas emissions, according to a Rocky Mountain Institute study. A new Nucor steel microplant in Missouri is trying to put a dent in that number.

Nucor’s micromill in Sedalia, Missouri, is set to be the first U.S. steel plant to run on wind energy, according to Evergy. The $250 million plant, which is expected to open by the end of the year, is a partnership between the steel company and local utility Evergy, which will power the plant after a 75 megawatt power purchase agreement between the companies.

With sustainability goals becoming increasingly important to companies, plants like this one could be built more frequently, and Evergy senior vice president Chuck Caisley says that the Midwest is in a prime position for more projects like the Nucor plant.

“We sit in the Saudi Arabia of wind,” Caisley said. “I think that increasingly there will be sustainability requirements companies will want to meet. In Kansas and midwest Missouri we have great wind to meet current and prospective customers with price competitiveness and sustainability. It reduces our environmental footprint in the area and creates jobs.”

The Nucor plant was not initially conceived with a goal of using wind energy, but the Evergy executive said a competitive price ended up attracting the steel-producing company to Missouri over other wind-rich states, like Nebraska and Kansas, who were finalists for the project. Caisley said that the price competitiveness, along with helping Nucor meet sustainability goals, were important to get the project to Missouri. There is a law in the state that lets utilities apply for discounted electric rates for aluminum and steel producers that buy significant amounts of energy (Read More ...)

This Week's Key Take-Away


At any one time, the United States uses more than 400,000 megawatts of electricity. That’s a lot of power, and it takes a lot of non-stop work to keep it flowing. But how safe is America’s power grid from cyber-attacks and other disruptions?

Cyber intrusions are no longer a theoretical possibility. In March, hackers succeeded in breaching a utility that serves portions of California, Utah, and Wyoming. The attack lasted 10 hours and disabled control systems for more than 500 megawatts of wind and solar power, enough generating capacity for several hundred thousand homes. Fortunately, grid operators were able to maintain service throughout the attack. But a full-scale blackout isn’t an impossibility.

Utilities and critical infrastructure connected to America’s electric grid remain vulnerable. That’s the consensus of more than 1,700 utility professionals surveyed recently. More than half expect a cyber-attack on America’s critical infrastructure in the next 12 months. While cyber-attacks are a top concern, America’s power grid faces other limitations.

There’s also pipeline safety. Over the past decade, the U.S. has eliminated many coal power plants while transitioning to greater dependence on natural gas. All of this gas is delivered from regional hubs through more than 300,000 miles of major pipelines. During last January’s “Polar Vortex,” families from Rhode Island to Minnesota experienced problems when pipeline system pressure fell during peak use. Grid reliability has already faced challenges in places like Texas and Chicago. Uncooperative weather meant wind turbines there failed to produce sufficient electricity.

What if hackers used such conditions to launch an attack? Widespread power outages could result, putting lives at risk. The nation needs a balanced mix of fuel sources – everything from wind and solar to 21st century nuclear and natural gas – to maintain fuel diversity in the face of new challenges.