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Natural Gas Market Indicators
The significant cold snap in December resulted in a 110 Bcf demand day on December 10. While 100 Bcf plus consumption days are not uncommon as
peaks, they more usually happen in January or February not early December. Heating load, industrial process and plant heating, additional power generation requirements have all contributed to the robust December consumption.
On the supply side, temporary production area well freeze-offs that are not uncommon in the intermountain west during cold periods extended to other areas and probably contributed to the strong withdrawals from storage in mid-December.
The argument can be made that while a decided shift to more onshore production creates protection from hurricane induced supply disruptions, it also adds sensitivity to extremely cold conditions and that flowing production could be impacted more now than when productive capability was more centered in the gulf region.
Visit this link to download the full Natural Gas Market Indicator. Topics covered include: Reported Prices, Weather, Working Gas in Underground Storage, Natural Gas Production, Rig Counts, Pipeline Imports and Exports, and LNG Markets.
There are $20 bills outside your house!
President Obama, who has been promoting the weatherization of homes and businesses as both an energy-saving and money-saving practice, was recently quoted saying, “If you saw $20 bills just sort of floating through the window up into the atmosphere, you’d try to figure out how you were going to keep them.” It is hard to disagree.
But what if you were driving or walking near electricity infrastructure and you noticed that $20 bills were oozing out of the wires and floating onto the road? I imagine that you’d try to stop and pick those up too.
If site-based efficiency gains (caulking your home or installing higher efficiency appliances) are like collecting $20 bills for yourself, then source-based efficiency gains are like society finding $20 bills laying all over the place.
After accounting for extraction, generation, transmission, and distribution (or, after adopting a source-based efficiency measure), three times more energy reaches the customer with the direct use of natural gas as compared to electricity. Put another way, if you start with 100 units of source energy, 32 of them will reach the customer if they are converted to electricity first, but 92 of them will reach the customer if they are used directly in natural gas furnaces, water heaters, etc. (for more information see AGA’s new direct-use slides here). It is a story you have likely heard before, but it bears repeating.
This is not to say that people should allow $20 bills to float through their windows. But we should all be thinking more about the $20 bills lying on the road.
Entergy ahead of schedule in New Orleans
Kudos to Entergy! Talk about the “comeback kid!” Not only is Entergy rebuilding its distribution system following the havoc wreaked by Mother Nature’s Hurricane Katrina in 2005, but Entergy is AHEAD of schedule, UNDER budget, BOOSTING service reliability and ALL this while NOT increasing customer rates. Add to this, McGraw-Hill’s Platts Global Energy Awards recently recognized Entergy New Orleans Inc.’s gas rebuild project as the Global Infrastructure Project of the Year!
Obviously, things happen in the Big Easy that seem to only be pipedreams in other corners of the country. So, what’s the secret? Do tell!
Entergy New Orleans, Inc. reached a three-year milestone this month by rebuilding 135 miles of gas lines throughout the city – ahead of schedule and under budget. In addition, the world’s largest gas rebuild effort that was launched in 2007 following Hurricane Katrina has improved gas service reliability to Entergy New Orleans’ customers by reducing water-related outages by 50 percent since 2006. The project includes replacing cast iron and steel pipes with high-density polyethylene gas pipes while also converting the low-pressure gas system to a high-pressure system. The new gas pipe resists saltwater corrosion and is quicker to repair compared to the cast iron or steel traditionally used for gas systems, while the high-pressure system is virtually impervious to flooding. Through the use of combination of state-of-the-art drilling technology and modern distribution piping new technology, the gas rebuild project focuses on the customer by increasing service reliability and practically eliminating any traffic or business and home access disruptions during the restoration process.
When Entergy New Orleans made its original project filing with the New Orleans City Council in 2007, the company proposed three-year period intervals for reviews to best align to a condition-based strategy of rebuilding the system. Recognizing the corrosive effects of the flooding would impact various areas of the gas system differently over time and repopulating the city may require the company to target new areas, the gas rebuild schedule was based on criteria such as reliability issues, pipe sample results, coordination with city projects and population. Additionally, Entergy New Orleans fought for alternative sources of funds for costs associated with Hurricane Katrina damage in order to mitigate costs to the customer, such as Community Development Block Grant funds and insurance proceeds. As a result there has not been an impact on customer rates during the first three years of the rebuild project and Entergy New Orleans does not anticipate any impact on rates over the next three years as well.
Knowing first-hand the challenges this project has entailed, Perry Dufrene, gas rebuild project manager at Entergy New Orleans accepted the award on the company’s behalf. According to Dufrene, “We saw in this catastrophe an opportunity to do more than restore the system – it was an opportunity to bring benefits to our customers with new piping materials and also to implement innovative construction techniques that make the rebuild easy for the people of New Orleans…when all is said and done, the New Orleans gas system will be more modern, more protected from future damage and will also be easier and less expensive to maintain and repair.”
Bring it home, Perry! And congratulations to all the Entergy New Orleans team for thinking outside the box!
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