Category Archives: weather

Richard Meyer A New Year and the Gas Market is Setting New Records

On New Year’s Day 2018, the US natural gas market consumed more natural gas than ever before.

The new record has been made possible by a strong natural gas supply position that, coupled with an extensive production and delivery system, ensures reliable supplies for consumers.

On January 1, 2018, the US lower-48 consumed a total of 144.7 billion cubic feet (Bcf) of natural gas as record cold temperatures drove heating demand across much of the country, per preliminary data from Bentek/S&P Global.

The new record reflects the structural changes in the natural gas market, including increased use of natural gas for power generation, industrial manufacturing, pipeline exports to Mexico, and feedgas for LNG exports.

Total demand for the 2017-2018 winter has been well above average and set new records on New Year’s Day 2018  Image courtesy of S&P Global

Total demand for the 2017-2018 winter has been well above average and set new records on New Year’s Day 2018
Image courtesy of S&P Global

 

 

 

 

 

 

 

 

Residential and commercial demand neared an all-time high on January 1. Driven by the intense cold, heating demand helped push residential and commercial natural gas consumption to 76.4 Bcf for the day, just shy of the record 77.5 Bcf established in January 2009.

Supplies remain strong. Production, which is still flowing at high levels, has been affected somewhat by the cold as well freeze-offs have led to some shut-ins. Dry gas flows across the lower-48 fell from 77.2 Bcf to 71.9 Bcf between December 27, 2018, and January 1, 2018. These events are temporary, and production will recover when temperatures finally ease.

Despite this, the supply portfolio has been strong. Natural gas storage has been critical in meeting requirements, serving 43 percent of the gas delivered. Imported natural gas via pipeline from Canada and even imported LNG bolstered the US supplies.

Monday demonstrates not only the reliability and affordability of natural gas but also the sheer scale of energy delivered to consumers when they need it. Let me illustrate.

How much natural gas was delivered on New Year’s Day? About 134 billion cubic feet of natural gas was delivered to end-use customers Monday (excludes exports and pipeline losses).

The rate at which this amount of natural gas flows chemical energy to homes and businesses is equivalent to 1,700 gigawatts. By comparison, the entire US electrical grid today is only 1,000 gigawatts.

This back of the envelope calculation is meant to show the relative scale of how much energy the US natural gas system delivers and how important gas infrastructure is to provide the heat for homes during the worst of winter cold.

Monday’s record is impressive, no doubt. With much of the 2017-2018 winter still ahead of us, I wonder if new records await.

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Lori Traweek Winter Is Coming

giphyThose are the three simple words that capture why natural gas should be a significant part of our energy portfolio today and in the future. And it is not just because December 21 is the first official day of winter and there is nothing like natural gas to heat your home. In “Game of Thrones” there are several families vying to be king of all kingdoms. But what Jon Snow realizes is that instead of fighting each other, they need to be together fighting a common enemy, the White Walkers, who threaten all their existences.

And much like in the lands of the Westeros, there is a common misconception that the many sources of energy in the United States should be fighting for supremacy. That is unproductive and unrealistic. Rather, our focus should be on working together towards our mutual interest for a cleaner energy economy. Reliable, resilient, efficient, safe and affordable energy is core to Americans’ quality of life and we should all combine forces to work against anything that threatens that end. Winter is coming. And if we do this right, with the ability to make environmentally friendly choices that do not sacrifice reliability, resiliency, safety and affordability, it is the customer who should end up in the throne.

Natural gas is a foundation fuel and has been the key to unlocking the most substantial greenhouse gas emissions reductions in the nation’s history by reducing the use of coal for making electricity and facilitating growth in renewables. Electricity generators have chosen natural gas for its affordability and reliability, often replacing coal-fired power plants and emitting up to 56 percent less greenhouse gases than coal for the same amount of electricity. Between 2007 and 2015, the amount of electricity generated at coal-fired power plants declined more than 30 percent. Natural gas and renewables have filled that gap, with natural gas providing about two-thirds of the electricity to plug the hole left by coal; renewables made up the other third.

But the direct use of natural gas for heating, cooking and clothes drying is even cleaner. From the place where it is extracted from the ground, to appliances in your home, natural gas achieves 92 percent energy efficiency. When you factor in energy use and emissions along the full fuel cycle, households with natural gas versus all-electric appliances produce 37 percent lower greenhouse gas emissions.

More homes and businesses use natural gas today than ever before: 177 million Americans, due in large part to its affordable and stable prices. Those that use natural gas for heating, cooking and clothes drying save an average of $874 per year compared to homes using electricity for those applications. Low domestic natural gas prices have led to savings of almost $50 billion for customers who have used natural gas for heating, cooking and clothes drying over the past four years.

Not to mention, the natural gas delivery system is remarkably resilient and natural gas utilities plan throughout the year to prepared for the coldest days. Even during the Polar Vortex natural gas customers remained warm and toasty.

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Richard Meyer Natural Gas Market Indicators: November 15, 2017

Cold has arrived, and with it, surging demand. U.S. natural gas consumption hit 98 Bcf per day on November 10, an increase of 33 percent from five days prior. Heating requirements for homes and businesses provided the main thrust as residential/commercial consumption jumped 93 percent during those five days. Power generation climbed eight percent over that period; exports, while strong, ticked up a mere 2.7 percent.

How much energy is 98 Bcf? The rate at which 98 Bcf per day flows chemical energy into the economy is equivalent to 1,230 GW. By comparison, the U.S. power grid boasts a little more than 1,000 GW of net summer capacity. In other words, natural gas, as it does every winter, supplies a lot of our energy needs.

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: October 30, 2017

Supplies are increasing. Record levels of production are flowing into the market have more than offset slight declines in Canadian imports. Storage inventories are robust even though totals are slightly below the all-time highs set in 2016. December prices currently trade at $3.00 per MMBtu. Now we wait for the first cold snap to see how the market reacts. Winter is coming.

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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