Archives

Poll Results: Ohio Voters Against Re-regulation to Monopoly Utilities

At this point it is old news, that the largest electric utilities in Ohio have been in discussions regarding “restructuring” competitive markets within the state. Despite their efforts to change the current seven-year construct, Ohio voters may be the biggest political snag in their way.
Based on a poll conducted in January and by Fallon Research and Communications, and first reported by The Cleveland Plain Dealer, Ohio voters are very much in opposition of a return to a regulated market construct that would allow monopoly utilities. The telephone survey was conducted in January polled a panel of 800 Ohio voters about key supporting issues. The results favoring energy choice and objection to monopoly utilities were consistent across party affiliation, gender, age, and location.

Results from Fallon Research’s Poll & The Plain Dealer’s Report:
More than 91 percent would oppose any law change allowing FirstEnergy or Columbus-based AEP to build new power plants and raise monthly rates to pay for them. AEP wants to do exactly that, build wind and solar farms and maybe new gas turbine plants while selling off or closing its old coal units.
Nearly 79 percent would oppose any legislation that did away with a customer’s choice to shop for power suppliers. Dozens of independent suppliers now compete for customers through a state-maintained “Energy Choice” website. A return to old-style regulation could end that kind of competition, say independent power companies, forcing customers to return to their traditional electric utilities for electricity as well as delivery.
Nearly 62 percent said they would oppose paying extra every month to support older power plants that cannot compete well against modern gas turbine plants. FirstEnergy has persuaded state regulators to do just that — though the latest subsidy does not mention its power plants. Federal regulators objected to earlier, more expensive proposals that spelled out exactly how the extra fees — amounting to an extra monthly consumer bill every year — would be spent.
Nearly 60 percent of voters would object to the creation of special subsidies for one fuel source — in this case FirstEnergy’s nuclear power plants, which are expensive to operate and do not always compete well against gas turbine plants. The idea has been adopted in New York and Illinois, but has been challenged as anti-competitive. FirstEnergy is considering asking for such a subsidy but has not made a final decision.
AARP and the Alliance for Energy Choice, a group representing independent power producers funded the statewide poll. The Alliance spokesperson, and former chairman of the PUCO, Todd Snitchler spoke on the results of the poll commenting that, “The results of the poll clearly demonstrate that talk about a need for re-regulation or changes to Ohio’s energy landscape, is pointed in the wrong direction.

Fallon Research and Communications. (2017). Ohio Voters on Energy Choice 2017. The Cleveland Plain Dealer [Distributor]. Retrieved from http://www.cleveland.com/business/index.ssf/2017/02/ohio_voters_want_energy_choice.html.

 

Natural Gas Market Update – 02/27/2017

NGmarketupdatebanner
Storage Report – 02/23/2017

Thursday’s storage report cited a withdrawal of 89 Bcf, slightly higher than expectations of an 85 Bcf withdrawal. As a comparison, last year’s withdrawal for the same week was 131 Bcf, and the 5-year average reduction is 158 Bcf.

Working gas in storage was 2,356 Bcf as of Friday, February 17th, 2017, according to EIA estimates. Inventory was reported at 261 Bcf (-10.0%) less than last year at this time, and 156 Bcf (+7.1%) above the 5-year average of 2,200 Bcf.

Natural Gas Trends:

March NYMEX: Moved off the board Friday, February 24th, settling the month at $2.627/Dth.  As a comparison, March 2016 NYMEX closed at $1.711/Dth, and the 3-year average settle price for March is $2.411/Dth. However, down 76.4 cents from February 2017’s NYMEX settlement of $3.391/Dth.

April NYMEX: Trading closed Thursday at $2.749/Dth, up 4.8 cents from Wednesday’s close of $2.701/Dth. Over the last month, APR17 has traded as high as $3.499/Dth and as low as $2.641/Dth.

Seasonal Strips:

The current summer strip (APR17-OCT17) settled Thursday’s trading at $2.907/Dth, down 21.5 cents from a week ago. This coming year’s winter strip (NOV17-MAR18) settled Thursday at $3.177/Dth down 20.2 cents from last week.

12 Month Strip: Settled Thursday at $2.973/Dth, down 40.0 cents from the month prior. As a comparison, the strip was trading one year ago at $2.144/Dth.

Summary:

Dozens of record temperature highs were broken throughout the country in the past week, with daily highs coming in 20-40 degrees above average for the eastern two thirds of the country. Hopes for any consistent cold, to end winter have most certainly diminished, with weather models currently favoring an extended warmer than normal scenario through March.

Natural gas rig count continues to raise, now up 51.5% year-over-year. Supply is waiting to catch up to the increase of rigs, as it is currently down 3.9 Bcf/d y-o-y, while consumption is significantly down (-11.4 Bcf/d y-o-y).

Unseasonably warm weather has dominated much of 2017, reducing demand and cutting withdrawals 17% below the 5-year average. These fundamentals have weighed heavy on natural gas prices, which have slowly retreated across the board to near six month lows. Prompt month gas has sharply fallen 37.7 cents just from last Wednesday’s (02/15/17) high of $2.994/Dth. Long term prices have also shown weakness, as calendar strip prices out through 2025 are all currently trading sub $3.00/Dth.

 

Nexus Pipeline Development Facing “Batty” Road Blocks

The Nexus pipeline project has run into countless hurdles and road blocks ever since its initial proposal last year. We first reported on the Nexus project back in March of 2016. The intent of the project is to support the growing demand for clean-burning natural gas, by building additional pipeline infrastructure in Ohio, Michigan, and Ontario (Canada). Following completion, the pipeline system is expected to move 1.5 Bcf/d (billion cubic feet a per day) of natural gas from southeastern Ohio, eventually ending in southern Ontario.

As of last March, 13 connection agreements were made with various Ohio markets affected by the proposed route. Since then, the project has faced turbulence from activist groups and countless townships. Just in the last couple of weeks, objection efforts have made news on several occasions. Just a few of these examples are below:

• The city of Green, Ohio has hired law firm, Frost Brown Todd to aid in the city’s fight to reroute the pipeline away from the city. City officials believe the pipeline will have a $120 million impact on the city.
• Bowling Green city Council voted months ago to deny an easement offer to build part of the pipeline through the city, and now has protesters on the proposed ground attempting to further stall its construction. UC4POWER a local activist group and BGSU faculty believe the pipeline could contaminate local water supply.
• One of the most peculiar reports comes from Medina County, where “the coalition to reroute Nexus” cites bats as an argument against pipeline construction. This part of the state is home to northern long-eared bats, a threatened species. As a threatened species, their habitat is supposed to be protected during the bats’ nesting season, but the coalition is fearful that Nexus could be granted an exception.

In attempt to avoid more conflict, Nexus pipeline partners asked FERC (Federal Energy Regulatory Commission) to expedite the decision to grant permission by February 3rd, to build the pipeline, before one of the FERC commissioners steps down. FERC was inactive in response. The Nexus project isn’t dead yet, but at the moment, the future does appear uncertain.

 

Natural Gas Market Update – 02/17/2017

NGmarketupdatebanner
Storage Report – 02/17/2017

Thursday’s storage report cited a withdrawal of 114 Bcf, less than expectations of a 128 Bcf withdrawal. As a comparison, last year’s withdrawal for the same week was 136 Bcf, and the 5-year average reduction is 156 Bcf.

Working gas in storage was 2,445 Bcf as of Friday, February 10th, 2017, according to EIA estimates. Inventory was reported at 303 Bcf (-11.0%) less than last year at this time, and 87 Bcf (3.7%) above the 5-year average of 2,358 Bcf.

Natural Gas Trends:

March NYMEX: Trading closed Thursday at $2.854/Dth, down 7.1 cents from Wednesday’s close of $2.925. Over the last month, MAR17 has traded as high as $3.498/Dth and as low as $2.831/Dth.

Seasonal Strips:

This current summer strip (APR17-OCT17) settled Thursday’s trading at $3.122/Dth, down 21.3 cents from a week ago. This coming year’s winter strip (NOV17-MAR18) settled Thursday at $3.379/Dth down 19.3 from last week.

12 Month Strip: Settled Thursday at $3.187/Dth, down 30.9 cents from the month prior. As a comparison, the strip was trading one year ago at $2.267/Dth.

Summary:

The natural gas market has been under pressure over the past few days, as cold air exits the Northeast, and spring like temperatures expected to move in through Presidents Day. Most of the country will see temperatures well above average for mid-February (15-30 degrees above). There are some indications that the warmth may even continue through most of next week.

With the weak demand for natural gas, March NYMEX finally broke through the $3.00 support level on Monday, and has continued to steadily tumble since. The bearish storage report sank the prompt month price an additional 8 cents on Thursday. March 2017 may not roll off the board at last year’s settlement of $1.711/Dth, but if the warmth continues, the floor on natural gas prices may continue to fall.

 

Did Christmas come early for the coal industry?

Robert Murray, CEO of Murray Energy Corporation, the largest underground coal mining company in the US based in St. Clairsville (OH) has been one of the most outspoken people in the “war on coal”. Although pleased with the outcome of the election, his excitement is tempered by an underlying reality of how quickly things have changed in the power generation sector.
Mr. Murray would probably like Santa to deliver everyone a lump of coal in their stockings (as a good thing) this year, but is also keenly aware that natural gas and renewables (wind/solar) are taking a larger and larger piece of the generation pie. In fact, in 2007 coal represented 48.5% of the main fuel source for generation, today (through June 2016) it is sitting just under 30%.
Interesting that he doesn’t see the jobs coming back but is also concerned as more LNG and exports are on the horizon, that in turn will drive up natural gas pricing and coal will still be in demand as the main baseload, low cost fuel source for some time to come.

 

For more details:

http://www.powermag.com/coal-magnate-tells-trump-to-lower-his-expectations/?printmode=1

 

 

Natural Gas Market Update – 12/09/2016

NGmarketupdatebanner
Storage Report – 11/10/2016

Thursday’s storage report cited a withdrawal of 42 Bcf, higher than expectations of a 35 Bcf build.

As a comparison, last year’s withdrawal for the same week was 69 Bcf, and the 5-year average is a 76 Bcf decline.

Working gas in storage was 3,953 Bcf as of Friday, December 2nd, 2016, according to EIA estimates. Inventory was reported at 51 Bcf (+1.3%) more than last year at this time, and 254 Bcf (+6.9%) above the 5-year average of 3,699 Bcf.

Natural Gas Trends:

December NYMEX: Moved off the board Monday, November 28th, settling the month at $3.232/Dth. As a comparison, December 2015 NYMEX closed at $2.206/Dth, and the 3-year average settle price for January is $3.240/Dth.

January NYMEX: Closed trading Thursday at $3.695/Dth, up 9.2 cents on the day. Over the last month, JAN17 has traded as high as $3.775/Dth and as low as $2.772/Dth

Seasonal Strips: This year’s remaining winter strip (JAN16-MAR17) settled last Thursday at $3.547/Dth up 6.1 cents from last week. Next year’s summer strip (APR17-OCT17) settled Thursday’s trading at $3.413/Dth, up 9.5 cents from a week prior.

12 Month Strip: Settled Thursday at $3.492/Dth, up 63.7 cents from a month prior. As a comparison, the strip was trading one year ago at $2.347/Dth.

Summary:

After a record warm fall, it seems as though winter has arrived. An arctic blast is currently migrating across the country, but a second one next week is expected to be even colder. Temperatures are foretasted to be 30 degrees colder than average for much of the continental U.S. over the next two weeks, increasing demand for this period. However there is some debate whether the colder than normal temperatures will stay beyond the next two weeks.

Natural gas prices have recovered from lows in November and this week have surged to their highest levels since December of 2014. The market has shown a lot of volatility this week with the cold weather ahead. After posting a five day high on Tuesday of $3.73/Dth, the market closed down 13 cents Wednesday to $3.603/Dth, and then rallied again Thursday back up to $3.695/Dth. Given the expected cold circumstances over the next couple of weeks, analysts are expecting withdrawals of 130 Bcf next week, and 230 Bcf the following week. If these forecasts prove to be true, storage levels will likely erase surplus levels to last year, and possibly eliminate away even the 5-year surplus, that we have seen most of this year. The psychological impact of eliminating the surplus position could keep upward pressure on the near term prices.

 

Stretching Black Friday Savings Beyond the Sale

Holiday shopping is around the corner and we are now just days away from the biggest retail spending day of the year. For many, getting up at the break of dawn and joining the pandemonium of people traffic and chaos to save a few bucks has become almost a yearly ritual.

If you are in the market for a new television or electronics, black Friday deals don’t have to stop at the checkout line. By purchasing energy efficient devices and adjusting the settings of your new electronics after you unbox them, you can yield savings year-round on your energy bills. The following suggestions might be worth considering for you early bird bargain hunters.
When available, purchase ENERGY STAR ™ products. These products are the most efficient products in their product categories, and are generally the top 25% in energy efficiency. TV’s are a flagship black Friday item. While price discounts can be eye drawing, also pay attention to the yellow EnergyGuide label. Some of the higher end ultra HD televisions can consume as much as two to three times more than more efficient models. If you are looking to purchase a new video game console, be aware these devices can be big energy users. Nintendo Wii and Wii U’s use far less power than Playstations and Xbox’s. Playstations curtail power when in standby mode, but Xbox One’s continue to draw 10 watts of power even with the television off. If you are in the market for a device to stream media from the internet, media players such as Apple TV, Roku, or Amazon Fire are about 20-30 times more efficient than using a game console.

You can continue to save some green by making changes to device settings when you initially set them up. With new computers, use power-management settings to reduce energy use. Also skip screensavers and set the screen to switch off after 15 minutes of inactivity and to sleep after 30 minutes. Most new TV’s have a quick start feature than can be disabled. When the feature is enabled, the device can use excessive electricity in standby mode when the TV thinks it’s off. You can also turn on automatic brightness control on most new televisions. The feature can result in almost 50% of energy savings in a room that’s dimly lit.

What a better gift to give someone than one that keeps on giving. Device level meters such as the Kill-A-Watt EZ meter cost about $20-30, and assess the efficiency of the appliance or device it is plugged into, while helping you monitor and reduce your power costs over time. Programable and Smart thermostats allow you to set schedules and conditions for your home HVAC system which can easily save you up to 30% annually on your utility bills. LED bulbs may not get your gift recipient grinning from ear to ear, but every LED bulb you replace can save around $100 over its lifetime versus incandescent.

Choosing more energy efficient electronics help curb climate pollution, so not only are you saving green, you’re being green as well. These products may not laugh when you tickle them, but the long-term savings might allow to increase your gift budget for next Christmas. So when you’re strolling through your favorite box store, groggy from yesterday’s turkey, it might be worth keeping some of these suggestions in mind.

 

Natural Gas Market Update – 11/11/2016

NGmarketupdatebanner
Storage Report – 11/10/2016

Thursday’s storage report cited an injection of 54 Bcf, slightly higher than expectations of a 50 Bcf build. As a comparison, last year’s injection for the same week was 55 Bcf, and the 5-year average is 38 Bcf.

Working gas in storage was 4,017 Bcf as of Friday, October 28th, 2016, according to EIA estimates. Inventory was reported at 47 Bcf (+1.2%) more than last year at this time, and 189 Bcf (+4.9%) above the 5-year average of 3,828 Bcf.

Natural Gas Trends:

December NYMEX: Trading closed Thursday at $2.632/Dth, down 5.8 cents from Wednesday’s close of $2.690/Dth. Over the last month, DEC-16 has traded as high as $3.556/Dth and as low as $2.546/Dth.

Seasonal Strips: This year’s remaining winter strip (DEC16-MAR17) settled Thursday at $3.122/Dth, down 6.3 cents from a week prior. Next year’s summer strip (APR17-OCT17) settled Thursday at $2.877/Dth, down 7.9 cents from last week.

12 Month Strip: Settled Thursday at $2.855/Dth, down 47.4 cents from the month prior. As a comparison, the strip was trading one year ago at $2.554/Dth.

Summary:

A cold shot for the Northeast and Great Lakes regions is expected to take place between now and Tuesday. Temperatures in the regions will fall as low as the 20’s and 30’s, which creates the potential for the first snowfall of the season. The cold air blast will likely bring the coldest temperatures for these regions, so far this year, but is expected to only last about a day and a half to two days, once it hits. A return to above average temperatures is foretasted by mid week. Once again, the 6-14 day outlook favors warmer than normal temperatures for almost the entire continental U.S.

Current weather models show November to end with temperatures that are 18% higher than the 10 year average. A warmer than normal October and start to November has already driven market bulls to sell off long positions, which has plummeted the natural gas market over the past three weeks. November is typically the first month of the heating season, but the mild weather has limited demand allowing for additional injections beyond October 31st, the traditional end to the injection season. This week’s injection has put inventory at 4,017 Bcf, officially surpassing the previous record of 4,009 Bcf, set last year. Until consistent cold weather and increased natural gas demand occurs, natural gas prices would be expected to remain under pressure.

 

Powerhouse: The University of Houston

The University of Houston is having an impressive football season, but the Cougars are unmatched every year in the energy sector.

From event sponsorships and stadium naming rights to league wide corporate partnerships, energy and utility companies are no strangers to marketing through sports. One state where both energy and sports are considered dominant politically and economically is the great state of Texas. The cliché of “Everything is bigger in Texas” definitely holds true to both. Texas leads the country in natural gas, oil and net electricity production. If Texas were considered its own country, it would rank sixth globally in oil production and eleventh in electricity production.

texas-fbs-programsTexas also leads the way in number of college football programs with 52 total NCAA sanctioned programs and 10 FBS: Division 1-A schools. When you think of Texas college football, the conference that comes to mind is the Big-12, and if there were a Big-12 conference of energy, the University of Houston would not only top the conference, but would be leading the FBS rankings.

Considered “Energy Town, USA,” Houston is home to 17 energy related Fortune 500 companies and more than 3,600 energy-related firms. For years the university has drawn from the influence of the industry around it to establish itself as the premier energy institution. UH is only rivalled in the field to the likes of outstanding engineering schools such as MIT. UH has always been well known for producing top engineering graduates ready for the fields of oil and natural gas, but now university research is also leading the way in the exploration of cleaner production and energy efficiency. The University of Houston’s energy research is responsible for many breakthroughs including discovering cleaner and more efficient ways for extracting oil and gas from the Earth, increased efficiency of drawing power from the sun and wind, and developing nanotechnology that can boost oil and gas recovery from existing wells with fewer chemicals.

uh-conferenceEnergy extends beyond the 50 energy-related degree programs at UH. The institution’s business school also focuses on energy finance and energy management, and offers an energy-focused MBA. UH has continued to stay in the forefront of the evolving energy sector by hosting an annual energy symposium series, which has become a renowned event amongst the energy industry. While the UH football team has had a notable season so far, the school’s energy program has been a “powerhouse” for years, and thanks to outstanding student research, it looks as though it will remain a dynasty for decades to come.

 

Natural Gas Market Update – 10/7/2016

NGmarketupdatebanner
Storage Report – 10/6/2016

Thursday’s storage report cited an injection of 80 Bcf, higher than expectations of a 72 Bcf build. As a comparison, last year’s injection for the same week was 96 Bcf, and the 5-year average is 95 Bcf.

Working gas in storage was 3,680 Bcf as of Friday, September 30th, 2016, according to EIA estimates. Inventory was reported at 74 Bcf (+2.1%) more than last year at this time, and 205 Bcf (+5.9%) above the 5-year average of 3,475 Bcf.

Natural Gas Trends:

November NYMEX: Trading closed Thursday at $3.049/Dth, up $0.008 from Wednesday’s close of $3.041/Dth. The market rally continued Firday. As of this writing Novmeber NYMEX is trading up an additional 12 cents. Over the last month, NOV-16 has traded as high as $3.218/Dth and as low as $2.802/Dth.

Seasonal Strips: This year’s winter strip (NOV16-MAR17) settled Thursday at $3.305/Dth, up 11.3 cents from a week prior. Next year’s summer strip (APR17-OCT17) settled Thursday at $3.125/Dth, up 10.3 cents from last week.

12 Month Strip: Settled Thursday at $3.200/Dth, up 20.2 cents from the month prior. As a comparison, the strip was trading one year ago at $2.728/Dth.

Summary:

Widespread warmer than normal weather is expected for the continental United States over the next two weeks, a key factor in the recent run up in short term gas prices. Hurricane season has come in with a bang. Hurricane Matthew has inhabited Florida over night, and is expected to make its way into the Carolinas this weekend. The impact will be felt through lessened demand for natural gas and electricity as it makes its way up the Atlantic coast affecting residents and businesses in the process.

The storage surplus continues to narrow year-over-year, now just a mere +74 Bcf (+2.1%). We have begun to see rigs come back online, but production from them may not materialize for a few weeks. Last week production declined to 69.47 Bcf/d, down 2%. Natural gas demand also fell by 4% w-o-w, driven largely by a 14% decline in electric generation.

Yesterday’s storage report cited the second largest injection this season, but it still trails last year’s mark and the 5-year average. The 2016 refill season will likely conclude as the second only injection season not to post a triple digit build. Initially the market fell 5.6 cents Thursday, in reaction to the report, but by end of day rebounded 8.1 cents to settle up on the day. Weather related price volatility will likely continue with winter soon approaching.