Richard Meyer Natural Gas Market Indicators: June 15, 2016

The market is showing clear signs of tightening. Slowly falling production is eating into supplies while strengthening demand from power burn and exports means the balance into storage this June has been well below average. This deficit gives a little relief to a market with storage stocks at levels about two months ahead of schedule for a typical injection season.

The market has rationalized itself with rising prices, up now $0.60 from that $2 sticking point witnessed through much of the winter. Key to this balance, as always, will be summer weather. If temperatures drive more cooling demand, the bullish injection deficit is likely to persist.

Conversely, mild temperatures could mean additional volumes into storage, which would likely prove bearish for this market. However, the potential for additional exports through year-end may offer some additional flexibility on the demand side.

As these factors adjust in relation to each other, it’s important to step back and recognize that given the diversity and strength of demand and the rapid evolution in upstream activity just how resilient this market has been, as evidenced by lower and relatively stable prices for natural gas.

Visit this link to download the full Natural Gas Market Indicators report. Topics covered in this week’s report include: Reported Prices, Weather, Working Gas in Underground Storage, Natural Gas Production, Shale Gas, Rig Counts, Pipeline Imports and Exports, and LNG Markets.

Please direct questions and comments to Chris McGill at cmcgill@aga.org or Richard Meyer at rmeyer@aga.org.

Posted in Natural Gas, Natural Gas Market Indicators, weather | Leave a comment

Jackie Bavaro Liquefied Natural Gas Poised to make its Mark in the Global Energy Arena

The cover story for the June issue of American Gas magazine, titled, “Taking the Global Stage,” examines the current state of the liquefied natural gas (LNG) market and the opportunity for significant growth around the world.

The global LNG industry plays a key role in expanding access to an energy resource that will help achieve a lower-carbon future, cleaner air in metropolitan areas and a prosperousJune Capture economic outlook. Yet, over the next two years, new LNG supplies combined with weaker economic growth, increased competition from competing fuels and drastically lower oil prices may place downward pressure on LNG prices.

Despite these barriers, the global, social and political groundswell demonstrated by the COP21 agreements in Paris, France last November indicated that LNG can be a critical part of the future global energy mix.

Currently, the United States, which is now shipping from the lower 48 states with Cheniere’s first commissioning cargo in late February, has been reaching across the globe with its exports. The impact has rippled throughout the domestic natural gas industry. As a result, U.S.-based LNG companies have relationships with companies in many LNG-consuming countries with the ability to sell to eager buyers worldwide. New trade options are also opening up with the proliferation of emerging LNG markets in Australia, Southeast Asia, the Baltic states, Latin America and even the Middle East. In the short term, sellers will focus on Europe as a market for their excess volumes of LNG in 2016.

Last year marked the largest trade year in the history of the LNG industry. As a result, close to 10 percent of the world’s demand for natural gas is now met through LNG. A big year for trade paired with new import markets and a handful of liquefaction projects reaching final investment decision means global LNG is on the rise.

You can read the full American Gas article here.

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Emily O'Connell Systems Efficiency Initiative

It’s time to refresh our thinking on energy efficiency. Over the last 50 years, we’ve made great strides economy wide – manufacturing more fuel efficient vehicles, decreasing energy intensity in household appliances and improving the overall efficiency of homes and buildings.  I’m not suggesting our work is done, certainly there is always opportunity for improvement.  But it’s arguable that we’re reaching a point of diminishing returns when it comes to efficiency standards on many appliances and technologies. This certainly doesn’t mean research and investment should wane – quite the contrary.  Perhaps we just need to take a step back and broaden our thinking to take energy efficiency to the next level.

For example, a state-of-the-art new natural gas commercial boiler will be 98 percent energy efficient, a laudable achievement. However the true value of this new boiler is only as efficient as the pipes, valves and fixtures delivering heat to the building.  If these parts, or the heat delivery “system” complementing the boiler is sub-par, the efficiencies gained by the new boiler can effectively be lost. By focusing our attention on improving the efficiency of systems (the combination of equipment, operations, controls, accessories and means of interconnection that use or deliver energy) we can better design, install and optimize performance to achieve building wide energy efficiency.

“Systems efficiency” is not entirely new – members of the codes and standards community have recognized its potential benefits for some time now. What is new is the current effort to build support for developing and implementing systems-level efficiency standards in cases where this approach would make sense. The American Gas Association is a member of the Alliance to Save Energy and a founding member of the Systems Efficiency Initiative (SEI), a multiyear collaboration between industry and efficiency advocates to investigate and quantify the energy savings potential of a system-level approach. Through SEI, stakeholders from across the building value chain are discussing the untapped potential of systems-level standards as an added tool for improving building efficiency.

In its first year, they released a report entitled Greater than the Sum of its Parts: The Case for a Systems Approach to Energy Efficiency, exploring this shift in thinking and outlining the energy savings opportunities for various building systems with a focus on heating, ventilation, cooling, and lighting systems. Building on the report’s success, the Systems Efficiency Initiative will begin targeted modeling exercises to quantify the savings achieved through a systems approach.  They will be looking at multiple types of systems and even the interaction across systems to demonstrate that efficiency gains are not limited to one aspect or specific system within a building.  This initiative will culminate in the release of a roadmap where the SEI will highlight its findings and proposed recommendations on systems-level efficiency.

AGA continues to be involved in each step along the way and is committed to helping elevate the discussion around energy efficiency to include systems-level thinking. We will continue to keep you updated as the modeling exercises get underway and we learn more about the energy and cost savings potential of systems efficiency.

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Lisa O'Leary Call 811 Goes For Three-Peat Victory at Preakness Stakes

Photo Credit: The Washington Post

Photo Credit: The Washington Post

For the third consecutive year, a Call 811 sponsored jockey crossed the finish line first at the Preakness Stakes horserace. On Saturday, winning jockey Kent Desormeaux sported the bold “Call 811” logo and phone number on his riding pants and boots, as well as the ball cap he wore before and after the race. According to Nielsen ratings, more than 9.4 million people tuned in and saw the “Call Before You Dig” messaging as Kent rode horse Exaggerator to victory at the second leg of the Triple Crown series.

exaggerator action shot 3

Photo Credit; USA North 811

Members of the Common Ground Alliance (CGA), an organization dedicated to educating professionals and homeowners about the importance of safe digging procedures, helped secure the partnership, including Dig Alert of Southern California, Dig Safely New York, Kentucky 811 and USA North 811. In both 2014 and 2015, jockey Victor Espinoza was wearing 811 gear when he won the Preakness Stakes. Last year was especially special, as Espinoza went on to become the first Triple Crown winner since 1973.

A call to 811, which should be done a few days before beginning construction projects, planting or undertaking any kind of digging activity, connects callers to their local One Call Center which gathers information about the project and alerts your local utility company. Crews then locate the utility lines near the planned project and make sure they are properly marked so you can be sure to avoid them. The process is fast, simple and free, and prevents excavation damage – the number one cause of pipeline incidents in the United States.

To learn more about Call 811 visit http://commongroundalliance.com/. If you are a utility and have a unique and interesting way you’re promoting Call 811, let us know in the comments section below or email loleary@aga.org.

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