Weather is a hot topic and continues to be the top story across all the energy commentary, this past week. Heavy rain is forecasted across the southern Plains and severe thunderstorms are possible across parts of the southern US and mid-Atlantic. What does this mean to the power consumer? It is reported that these declining temperatures cool the power demand and falling temperatures pulled the power burn down in regions by a combined 1.2 Bcf/d.
As much as weather is the top story, it seems timely to highlight an article released by the US Department of Energy. The article highlighted our nation’s wind potential. We have seen first-hand the power of wind in our own geographic area, as well as, images in the news. It’s reported that wind supplies nearly 5 percent of our nation’s electricity demand across 39 states, and it’s getting cheaper every year thanks to wind technology and policy. Further improvements are poised to make wind economical in every state.Read More
Weather is a hot topic right now as we are seeing what the atmosphere is capable of; severe thunderstorms, hail, and damaging wind gusts throughout the west and southwest. According to NOAA, El Nino conditions are in the Pacific Ocean. An El Nino is an irregularly-occurring ocean-atmosphere oscillation that affects weather around the globe. This weather phenomenon intensified from ‘weak’ in April to ‘weak-to-moderate’ in May. What does that mean for the US? The prediction is warmer temperatures this summer compared to last year’s mild summer. It also means a busy hurricane season which could cause energy disruptions in the Gulf of Mexico.
The EIA reported storage injection of 111 Bcf for the week ending May 7th. The injection was below expectations calling for an injection between 115 and 119 Bcf. US inventories now stand at 1,897 Bcf, which is 752 Bcf higher than this time last year and 38 Bcf below the five-year average.
Gas failed to follow through on the strong rally that started last Friday. Weakening industrial demand throughout the eastern US, particularly in the Midwest, are contributing to the overall demand decline. Demand is down 1.3 Bcf/d, while industrial demand shrunk by 0.1 Bcf/d. Demand is expected to continue to fall heading into the weekend, before warmer weather early next week boosts power demand throughout the Northeast and Southeast, raising overall demand.
According to Platt’s, the Federal Energy Regulatory Commission expects power generation capacity and fuel supply to be ample this summer. FERC believes the system reserve margins across all regions will be adequate. It is important to note that this is the first summer in which the Mercury Air and Toxics Standards went into effect and there is still a positive report on reserve margins.
Because of the low natural gas prices, natural gas power burn continues increasing. The EIA predicts that natural gas generation from April and May will nearly reach the level of coal generation – the first time the shares have been this close since April 2012.Read More
According to the EIA, from the week ending on April 3 (the beginning of the injection season) through the week ending on May 1, storage injections have totaled 325 Bcf – 54% more than the 211 Bcf injected during the same five weeks in 2014.
Thursday’s 76 Bcf injection compared bearishly against last year’s 75 Bcf injection and the five-year average injection of 68 Bcf. It also came in about 2-3 Bcf higher than what analysts predicted. Aaron Calder, senior market analyst at Gelber and Associates, believes that the market is currently oversupplied by about 3 Bcf/day and there are no signs of demand keeping up with production.
Weather is expected to remain mild with below normal temperatures across Texas, the Southwest and West. Above normal temperatures are expected across large parts of the Northeast and Midwest. The temperatures are expected to bring triple digit injections over the next four weekly storage reports. Forecasts for next week’s storage report are at about 120 Bcf.
Consumption fell last week as a result of the weather. Industrial demand dropped by about 3.4% and commercial and residential consumption fell by more than 30%. On the other hand, natural gas power burn increased 0.6% – which equates to a 13.9% increase over last year’s levels.
The Bureau of Labor Statistics released the job report and unemployment rate. Both are looking healthy and point to the economy improving. The U.S. added 223,000 jobs in April and the unemployment rate fell to 5.4%, the lowest since May 2008.
On Thursday, May 7, Dominion Cove Point received final authorization from the Department of Energy (DOE) to export liquefied natural gas (LNG) to countries without a free trade agreement with the US. The Cove Point LNG Terminal is located in Calvert County, Maryland and is able to export 0.77 Bcf a day of LNG for 20 years.
The Federal Energy Regulatory Commission (FERC) filed a notice for environmental review for the Oregon LNG export terminal, due February 12, 2016. After FERC approval, the LNG export company will have to wait for final DOE authorization. If approved, the facility has the capacity to liquefy up to 1.3 Bcf of natural gas a day.Read More
CareFlite is an air medical transportation service that operates five helicopter bases throughout the metroplex and responds to requests from hospitals, fire departments, EMS agencies and law enforcement within an area containing more than 100 counties in DFW. CareFlite is responsible for saving many lives each year and Rapid Power Management is proud to support them in any way we can.
The non-profit reduced electricity costs by 15.05% on their recent electricity contract. They were able to lock in a significant savings for many years. The amount they saved can be allocated elsewhere and help CareFlite continue what they do best – helping others!
Did you know? You can become a member of CareFlite! Members can use an unlimited amount of air medical transports as needed within their membership period. Sign up today!Read More
Non-profit organizations are not in business to make a profit. They usually make enough money to cover expenses and the rest is used to help others. The less expense, the more help they are able to provide.
One expense that can be quite significant is for electricity. It is necessary, of course, but any savings mean a lot to all consumers, especially non-profits. Rapid Power Management is proud to announce that we have slashed electricity costs at The Hope Center by 10.5% from last year.
The Hope Center is a campus and worship center that houses more than 40 Christian Ministries promoting synergy between members. By combining “homes,” ministry partners benefit from a significant cost savings which allows ministries to be effective as possible. We are pleased to have been a part of that for The Hope Center and all of its partners.
Did you know? The Hope Center is a nine acre campus that was designed to meet green standards. Find out more about The Hope Center by visiting their website here.Read More
After the storage report was released on Thursday, natural gas prices rose and, according to Gexa, settled above $2.75 for the first time in more than a month. The 81 Bcf injection fell 4 to 7 Bcf short of expectations. While it was a bullish report, we still sit 76.5% above last year’s levels and only 75 Bcf lower than the five year average. A positive to note is that Thursday’s injection was larger than both last years and the five year average injection for the same week.
Forecasters are expecting a mild summer season. The mild temperatures could bring triple digit injections these next few weeks.
Power burn continues increasing as more gas fired generation retires. Bentek estimates that power burn demand this summer will average 29.7 Bcf/day which is 4.5 Bcf/day higher than in 2014.Read More
For the second week in a row, the storage injection came in higher than what analysts were expecting. The 90 Bcf storage injection brought the current storage level to 1,629 Bcf. This sits 82.6% higher (737 Bcf) than last year’s levels and only 5.8% or 101 Bcf lower than the five year average.
Forecasts for May show more mild weather for the month with mostly normal and some below normal temperatures. Mild weather continues to take off heating and cooling loads, resulting in the larger injections.
Demand for natural gas continues to grow as coal plants retire, other plants begin switching from coal to natural gas and overall power burn increases. The MATS rule officially went into effect on April 16 and the EIA anticipates 13 gigawatts of coal fired generation capacity to retire this year. Coal accounts for 81% of all planned retirements in 2015.
Summer 2015 projections for consumption of natural gas power generation is just slightly below the 2012 record high level of 27.9 Bcf/day. Please see the EIA chart below.
Talks of gas infrastructure projects in the Southeast are expected to grow growth in natural gas demand along the coast. Kinder Morgan expects that there will be $100 billion worth of industrial projects along Texas and Louisiana. We will keep you updated as more information comes available.
Strip Price:Read More
The EIA reported a storage injection of 63 Bcf on Thursday (for the week ending April 10). This injection was about 4 Bcf larger than expectations and brought the deficit to the five year average down to 173 Bcf. Storage currently sits 692 or 81.7% above last year’s levels.
According to CenterPoint, the mild weather has taken off both heating and cooling loads across the country. This helped lead us to the bearish storage injection which came in well above both last year and the five year average. This week’s forecast is also rather mild for the most part but there is a chance some eastern states may need their heaters!
Year to date power burn for 2015 has averaged 22.2 Bcf/day – 3 Bcf/day higher than in 2014 and 2.4 Bcf/day higher in 2013. Platts notes that this is important because under a nuclear outage situation, power burn could be even higher as natural gas is the choice fuel to make up for lost generation. Bentek Energy expects power burn to average 27.8 Bcf/day this summer.
Weather Forecast (WSI)
LNG Export Terminals Update
Cheniere, Corpus Christi, TX – Approved by the Federal Energy Regulatory Commission (FERC), the plant is expecting to begin operations in late 2015 with commercial service in 2018
Cheniere’s Sabine Pass LNG, Sabine, LA – This four train facility received approval from FERC to export 2.2 Bcf/day and is scheduled to enter into service by late 2015 and bring full capacity online by 2016.
Cameron LNG, Hackberry, LA – This facility will be capable of exporting 1.7 Bcf/day and operation is expected to begin in 2018
Cove Point LNG, Cove Point, MD – This single train facility will have a capacity of 0.82 Bcf/day and begins operation in late 2017
Freeport LNG, Freeport, TX – With a 1.8 Bcf/day capacity is scheduled to begin commercial service in 2018
Expansions are also in the works for Sabine Pass and Cameron LNG’s capacities which would add an additional 2.7 Bcf/day (combined) capacity if approved.Read More
As a member of ISNetworld, Rapid Power attended their 2015 ISN Connect on April 9th and 10th in Grapevine, Texas.
ISN is a global resource for connecting Clients with safe and reliable contractors. Rapid Power utilizes ISN as a clearinghouse to maintain our safety, insurance, quality and regulatory information as a one-stop-shop. As one of our core-values, Rapid Power ‘Strives for Excellence’ and investing with ISN is an excellent way to verify to our clients that safety and compliance is a top priority!
Mike Bowman and Christa Taylor were both in attendance to hear ISN’s Keynote Speaker, Bill Clinton.Read More
Every Spring and Fall, Rapid Power Management shuts down* for the day for a little team-building and fun! Yesterday, the team had lunch at Meso Maya downtown and headed to the Perot Museum to check out the Tom Hunt Energy Hall.
*As you can see, David is on the phone in the photo. We may head out for the day, but we never put customer issues on the back burner!Read More