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In This Issue

New England's Known Need For More Natural Gas Pipelines

District of Columbia Council Unanimously Approves bill for 50% Renewable Energy Mandate

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.


Market Overviews

New England's Known Need For More Natural Gas Pipelines

Forbes | June 30, 2016

 “The volatility we saw last year in wholesale power prices – going from the third-highest monthly price in February to the lowest in June….illustrates the impact of….natural gas pipeline constraints, on the region’s power system,” Gordon van Welie, CEO, ISO New England

Despite not producing any itself, New England (6 states here) has rapidly surged its reliance on natural gas. ISO New England now gets about 50% of its power from gas, versus 10-15% a decade ago. From 2014-2015 alone, gas increased its share of New England’s power generation from 43% to 49%. Nearly 30 gas plants have been built in the region since 2000.

And largely based on the goal to reduce GHG emissions, plans for more energy efficiency, low levels of wind and solar generation, the shutdown/retirement of coal, oil, and nuclear plants, New England’s gas demand therefore will obviously continue to grow. ISO New England has “assessed the fleet of power plants in the six states and found that nearly a third of the grid’s generating capacity will have closed or be at risk of closure by 2020.” 

New England is the country’s most oil-reliant region, used for power generation and heating. Home heating takes priority in winter, and new and highly efficient electric plants don’t get reliable access to gas.  That’s why over 80% of the coal and oil used for power last year in New England occurred during the first quarter.

Currently, gas demand in New England averages 2.5-3.0 Bcf/day, and demand peaks in the winter, however, reaching around 4 Bcf/day. Gas pipeline capacity into the region is around 3.5 bcfd, with the rest available from Everett LNG imports. Rising gas demand though hasn’t meant rising pipeline capacity.

The claim that more renewables and more energy efficiency negate the need for more gas and more gas pipelines is simply not true. Take Massachusetts, which consistently ranks as the “most energy efficient state” and has still doubled its reliance on gas power to 50% since 2000. Massachusetts has nearly 20 times more gas power capacity than wind and solar capacity combined.

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District of Columbia Council Unanimously Approves bill for 50% Renewable Energy Mandate

Utility Dive | June 30, 2016

Legislation in the District of Columbia could mean the nation’s capital will join the ranks of states with aggressive renewable energy targets, such as California, New York and, more recently, Oregon.

The D.C. bill would also create incentives for 1,500 MW of new solar and wind power, according to the Chesapeake Climate Action Network (CCAN).

“Solar and wind are the fastest growing sources of power, and D.C. is positioning itself to capture the benefits of cleaner air, thousands of new jobs, and a better future for all residents,” Mike Tidwell, director of the Chesapeake Climate Action Network, said in a statement.

In testimony before the D.C. Council, James McGarry, policy director for Maryland and D.C. at CCAN, said, “D.C. has more than enough renewable resources at hand to meet and exceed the 50% target approved today.”

He said D.C. can meet its higher goal by tapping just 11% of the wind power already in the PJM Interconnection’s queue, adding that the District’s total solar potential is 2 GW, or four times greater than the 5% solar “carve-out” set by the new legislation.

“Washington, D.C. is already seeing a solar boom, and it’s about to get a whole lot bigger,” said Atta Kiarash, construction manager at D.C.-based Solar Solution LLC, said in a media report.

The bill now moves to Mayor Muriel Bowser, whose track record suggests she will sign it into law. Last year, Bowser voiced support for a 50% renewable energy mandate when she signed a power purchase agreement with Iberdrola for enough wind power capacity to serve 35% of District electricity demand. 

“The District of Columbia is proud to lead the nation in the utilization of affordable, green energy that creates jobs right here at home,” Bowser said in a statement. “The District is well on its way to achieving the Sustainable DC goal of using renewables to satisfy 50% of DC’s energy supply by 2032."

Read More:

Natural Gas and Oil Market Update


Natural Gas Futures Stay Higher After Bullish Weekly Storage Data | June 30, 2016

U.S. natural gas futures held on to solid gains in North America trade on Thursday, after data showed that natural gas supplies in storage in the U.S. rose less than expected last week.

Natural gas for delivery in August on the New York Mercantile Exchange jumped 3.3 cent, or 1.15%, to trade at $2.896 per million British thermal units by 14:33GMT, or 10:33AM ET. Prices were at around $2.913 prior to the release of the supply data.

`The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended June 24 rose by 37 billion cubic feet, below forecasts for an increase of 45 billion.


Oil Up 4 Percent On U.S. Crude Draw; Brent Back Above $50

Reuters | June 30, 2016

Oil prices surged 4 percent on Wednesday, with Brent settling above the psychological $50 a barrel mark, after a larger-than-expected drawdown in U.S. crude inventories.

It was a second straight day of gains for oil, which has risen nearly 8 percent since Monday’s settlement to recover almost all of what it lost after Britain’s shock vote to exit the European Union.

Fading concerns over the so-called Brexit, potential for an oil workers’ strike in Norway and a crisis in Venezuela’s energy sector were among factors supporting Wednesday’s rally.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report

Working gas in storage was 3,140 Bcf as of Friday, June 24, 2016, according to EIA estimates. This represents a net increase of 37 Bcf from the previous week. Stocks were 582 Bcf higher than last year at this time and 637 Bcf above the five-year average of 2,503 Bcf. At 3,140 Bcf, total working gas is above the five-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 ($ per mmBtu)

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

Disclaimer: The information contained in these reports is gathered from public and/or internal sources and is presented solely for the convenience of our customers and Newsletter Subscribers. Patriot Energy Group makes no representation or warranty, express or implied as to the accuracy or completeness of the information set forth in this newsletter, and Patriot Energy shall not have any liability to any person or entity resulting from use of this information in any way.
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