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In This Issue

PJM Grid Sees Power Plants Returning After Cold Weather Problems

EIA Issues Energy Outlook to 2015

Natural Gas and Oil Market Update

EIA - Weekly Natural Gas Storage Report

NYMEX Natural Gas Week-to-Week Price Change

Natural Gas Futures - Five Year Price


NOAA 6 to 10 Day Outlook
Color indicates the probability of forecasted temperatures being above or below a historical average for the period.


PJM Grid Sees Power Plants Returning After Cold Weather Problems

Reuters | January 9, 2014

PJM Interconnection, the power grid agency for 13 mid-Atlantic and Midwestern states, said power plants knocked offline earlier this week by frigid temperatures are slowly returning to service as the region begins to thaw.

PJM said it expected 27,000 megawatts of generation would be offline Wednesday evening, an improvement from the 39,500 MW that were shut earlier in the day.

The amount of natural gas-fired generation expected to be offline due to curtailments of gas - about 9,000 MW - showed no improvement from earlier in the day, PJM said in an email detailing this week's power-plant problems.

Wednesday morning's outage figure represents nearly 21 percent of PJM's total generating capacity of 189,658 MW. In late December, before the sub-freezing temperatures moved into the central U.S., PJM outages were running at about 12 percent of total generation, according to grid data.

PJM took emergency action Tuesday to meet surging demand as subzero temperatures in the region forced many power plants offline.

Overall, PJM said between 35,000 and 38,000 MW were offline Tuesday, up from 30,200 Monday evening. Actual outages fluctuate throughout the day as operators shut plants, make repairs and return them to service, officials said.

Michael Kormos, PJM's executive vice president for operations, cited weather-related mechanical failures and natural gas supply problems, as well as normal generation issues, for the increased power-plant outages during the bitterly cold time period.

"We've seen everything," Kormos said.

In its report, PJM said 19,114 MW of steam boiler plants, most coal-burning units, were shut early Wednesday when overall outages were above 39,500 MW.

More than 16,000 MW of natural gas and diesel-fired plants were unable to operate, including nearly 2,300 MW of newer, combined-cycle, gas-fired plants.

About 9,000 MW of gas generation was affected by gas pipeline curtailments, PJM said, describing the amount as "a relatively small percentage of the total outages."

Another 1,600 MW of nuclear generation was shut and nearly 1,500 MW of wind.

Despite emergency steps taken to curb electric use Tuesday, PJM set two winter power use records that day, of 138,000 MW in the morning and 141,312 MW later that evening, PJM said in a release. Power use exceeded PJM's previous record of 136,675 MW set in 2007 by 3.3 percent.

"Our thanks go to all of the consumers who heeded our call yesterday to conserve electricity," said Terry Boston, PJM president.

Wednesday's PJM peak demand eased to 134,505 MW and Thursday's peak will fall further to 122,341 MW, according to the PJM website.

Next-day power prices in PJM on Wednesday retreated to the mid-$50s per megawatt-hour - the five-year average for January - from an average of $240 per MWh the previous day.


EIA Issues Energy Outlook to 2015

Fierce Energy | January 9, 2014

The U.S. Energy Information Administration (EIA) has released its short-term energy outlook, including coal, natural gas, renewable energy, and electricity forecasts for 2015.

After two years of declining production, U.S coal output is expected to increase in 2014, forecast to rise almost 4 percent, or 36 million short tons, as higher natural gas prices make coal more competitive for power generation, according to EIA Administrator Adam Sieminski.

The share of U.S. electricity generated by coal is expected to increase from 39.1 percent in 2013 to 40.2 percent in 2014. However, in 2015, coal's share of generation is forecast to fall to 38.6 percent as more U.S. coal-fired power plants are retired due to the implementation of the U.S. Environmental Protection Agency's Mercury and Air Toxics Standards.

In terms of natural gas, following a cold December and several large weekly withdrawals of stored natural gas, "EIA is revising downward its estimate of the amount of U.S. natural gas held in storage at the end of the winter heating season by more than 200 billion cubic feet," according to Sieminski. EIA now expects inventories to total about 1.5 trillion cubic feet at the end of March.

U.S. onshore natural gas production is expected to continue increasing over the next two years, with strong output growth in the Marcellus Shale offsetting production declines in the Gulf of Mexico. Overall, U.S. natural gas production is expected to grow 2.1 percent this year and 1.3 percent in 2015.

In terms of renewables, U.S. wind power generation capacity is forecast to increase 8.8 percent this year and grow another 15 percent in 2015. Meanwhile, utility-scale solar power generation capacity is expected to rise 40 percent between the end of 2013 and the end of 2015.

The EIA expects average household electricity use to decline by 1.1 percent in 2014, and by another 0.4 percent in 2015, due to improvements in appliance and lighting energy efficiency which have helped slow the growth in residential electricity use in recent years.

"While residential electricity consumption may decline because of more energy-efficient appliances and lighting, the improving economy will cause a boost in electricity use by the U.S. industrial sector, which is forecast to consume 2.2 percent more electricity this year and 2.5 percent more in 2015," Sieminski said.


Natural Gas and Oil Market Update

Natural gas briefly pares losses after EIA data

MarketWatch | January 9, 2014

Natural-gas futures on Thursday briefly pared their losses after the U.S. Energy Information Administration reported that supplies of natural gas fell 157 billion cubic feet for the week ended Jan. 3. The fall was a bit more than expected as analysts surveyed by Platts forecast a drop of between 148 billion cubic feet and 152 billion cubic feet. Total stocks now stand at 2.817 trillion cubic feet, down 528 billion cubic feet from a year ago and 315 billion cubic feet below the five-year average, the government said. February natural gas was at $4.16 per million British thermal units, down 6 cents, or 1.4%. It traded as high as around $4.18 immediately after the data, then slipped back to where it traded before the report.


arrow upWTI Crude Climbs From Six-Week Low on North Sea Supplies

Bloomberg | January 9, 2014

West Texas Intermediate crude rose from a six-week low after the Buzzard oil field in the North Sea was halted and gunmen blew up a pipeline connecting producing areas in northern Iraq to refineries.

Futures advanced as much as 0.7 percent after two people with knowledge of the Buzzard outage said output at the 200,000 barrel-a-day field stopped yesterday. The attack in Iraq is the second on a pipeline in the Kirkuk region this year. WTI’s discount to Brent oil traded in London widened to the most in more than a month.

WTI for February delivery climbed 35 cents, or 0.4 percent, to $92.68 a barrel at 9:36 a.m. on the New York Mercantile Exchange. The contract fell $1.34 to $92.33 yesterday, the lowest close since Nov. 27. The volume of all futures traded was 9.1 percent below the 100-day average. Prices have fallen 5.8 percent since the start of the year.

Brent for February settlement increased 66 cents, or 0.6 percent, to $107.81 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of as much as $15.38 to WTI, the most since Dec. 4.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report


Working gas in storage was 2,817 Bcf as of Friday, January 3, 2014, according to EIA estimates. This represents a net decline of 157 Bcf from the previous week. Stocks were 528 Bcf less than last year at this time and 315 Bcf below the 5-year average of 3,132 Bcf. In the East Region, stocks were 239 Bcf below the 5-year average following net withdrawals of 98 Bcf. Stocks in the Producing Region were 40 Bcf below the 5-year average of 1,059 Bcf after a net withdrawal of 42 Bcf. Stocks in the West Region were 35 Bcf below the 5-year average after a net drawdown of 17 Bcf. At 2,817 Bcf, total working gas is within the 5-year historical range.

NYMEX Natural Gas Week-to-Week Price Change NYMEX Natural Gas Week-to-Week Price Change

Natural Gas Futures - Five Year Price

NYMEX Natural Gas Week-to-Week Price Change - Five Yearly Snapshot
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