Author Archives: Richard Meyer

Richard Meyer Natural Gas Market Indicators: August 28, 2015

The Environmental Protection Agency (EPA) released its new methane reduction rules aimed at limiting emissions from oil and natural gas operations from the wellhead to the distribution city gate. The rule includes elements targeting hydraulically fractured oil wells—something the New Source Performance Standards did not cover in 2012. The new standards would be expected to cost the industry about $370 million to implement annually by 2025, but bring in $460 to $550 million in benefits. It is not expected (at least by EPA) to be a limiting factor for future domestic production.

U.S. production averaged 72 Bcf per day in August. An extended maintenance season this summer has moderated some production growth in all areas of the country. Still, current average daily production year to date has been 4.0 Bcf higher than the same period in 2014.

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.

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Richard Meyer Natural Gas Market Indicators: August 14, 2015

Much of the near-term pricing analysis for natural gas in energy literature today points to the fact that as August winds down cooling loads will likewise lessen and natural gas storage will continue to build toward a strong pre-winter position—all moderating factors in price expectations.

On the other hand, more gas to power generation seems to be price-induced and structurally built in to gas markets—factors that would seem to point to price increases once winter demand loads begin. Pricing bulls and bears, bears and bulls. Similar tugs in both directions have led to relative stability in Henry Hub pricing this summer.

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.

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Richard Meyer Natural Gas Market Indicators: July 31, 2015

Daily natural gas volumes to power generation reached 36.8 Bcf on July 20, then 37.4 Bcf on July 28—both strong daily numbers. Previously, AGA reported that volumes of natural gas to power have also been peaking during winter months. With that said, the daily winter peak for gas-fired electricity in 2015 was 30 Bcf back in January. Overall, the power sector is the primary reason that demand in 2015 exceeds that of 2014. Average consumption of natural gas to power generation year to date has been 25.4 Bcf per day, which is 3.8 Bcf per day higher than in 2014.

As discussed previously in Market Indicators reports, structural changes in the national generation mix and market hub prices for natural gas below $3 per MMBtu help to account for the year over year difference. This year, in particular, power sector natural gas consumption has been impacted by record low hydro-generation in the Pacific Northwest, too.

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.

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Richard Meyer Natural Gas Market Indicators: July 13, 2015

With a 5-4 ruling, the Supreme Court of the United States remanded to a lower court the EPA Mercury and Air Toxic Standards (MATS) rule that would limit pollution from coal-fired power plants. The Court said that the EPA did not properly account for the costs of the rule when determining emissions standards and needs to do so. The ruling may have larger implications for future rulemakings under the Clean Air Act, but one question remains for these observations of the gas market: how much have expectations for MATS already been baked into the electricity system. In other words, will this ruling do much to reverse existing trends with coal-fired power?

The natural gas market today is supplying nearly 20 percent more natural gas to power generators than last July. In fact, EIA data on electric generation share by fuel for April showed that natural gas overtook coal for the first time ever – natural gas with nearly 32 percent compared with coal’s 30 percent. Part of the reason is price. The spot at Henry Hub is nearly $1.70 per MMBtu below last year. But part of the reason is structural. Compliance with the EPA MATS began in April and analysts expected between 13 and 20 GW of coal-fired power plants to be either retired or repowered in 2015 alone. Some of the shift has already occurred and is contributing, at least in part, to the gas volumes to power generation. Does this market transformation render the Supreme Courts’ decision moot?

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.

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