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In This Issue

Utility Company's Natural Gas Proposals Face Resistance In RI

PJM approves grid's largest efficiency project as part of $636M transmission investment

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

Tables

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

 

Market Overviews

Utility Company's Natural Gas Proposals Face Resistance In RI

Rhode Island Public Radio | August 11, 2016

National Grid has come under fire for two proposals related to natural gas. The utility company's goal is to bring down the cost of electricity in the wintertime, but some state lawmakers and environmental groups aren’t convinced.

You remember that cold winter three years ago, right? The so-called polar vortex? Well, that year, electricity prices in New England were really high, because there wasn’t enough room in the pipelines for the power plants that make electricity. In the winter, companies that use natural gas for heating homes and businesses have first dibs on those pipelines.

So along with other companies, National Grid is proposing a pipeline expansion in the region to address that constraint. And how would the company pay for this?

“Through an additional charge to electric customers,” said National Grid spokesman David Graves. The Rhode Island Public Utilities Commission is still reviewing the request to add this charge to electricity customers’ bills. It would help pay for a project proposed by Spectra Energy called the Access Northeast Project.

“This is just one project that we hope will benefit our customers and will provide enough natural gas coming into the region so that we can offset the price spikes we’ve seen in the past,” said Graves. “Is it an absolute dead certain guarantee? No. Nothing is. We may need more pipeline capacity.”

The environmental advocacy group People’s Power and Light is one of a number of environmental groups that oppose the project. The group disagrees with the premise that we need any additional pipeline capacity. Executive Director Larry Chretien said this proposal, on the table in both Rhode Island and Massachusetts, would put ratepayers on the hook for 20 years.

“That is such an outdated concept. We don’t think we need it in 2016 and we are pretty damn sure we are not going to need it in 2036 with all of the advancements of technology that are going to be happening,” said Chretien.  

The Massachusetts Attorney General also opposes charging electricity ratepayers for new or expanded pipeline capacity. Maura Healey commissioned an independent study to evaluate whether New England needs more pipeline capacity.

The study concluded the region does not need additional pipelines and energy needs in the winter time could be met with other more affordable solutions, such as energy efficiency and a conservation program known as demand response.

The spokesperson for the Rhode Island Attorney General Peter Kilmartin said his office is still studying the proposal’s impact to Rhode Island ratepayers.

So that’s one proposal by National Grid that’s getting pushback. The other is a proposal to liquefy natural gas on a site at Field’s Point in Providence. Graves said it’s another effort to stabilize electricity prices by producing liquefied natural gas on site, rather than importing it from abroad.

State Rep. Aaron Regunberg is one of nine lawmakers who call the LNG project a bad deal for ratepayers. He worries the burden to pay for this project will fall more on ratepayers in Rhode Island than in Massachusetts.

“This is an incredibly costly project:  $100 million for the liquefaction facility and another $80 million for the barrier,” said Regunberg.

Regunberg and his colleagues wrote a letter to the federal agency reviewing the proposal to express their safety concerns, too.

“We already have LNG in the port, so there’s already some baseline risk,” said Regunberg.” And this proposal wants to double down on this dangerous material. We have seen LNG incidents (explosions, leaks) in other parts of the country. This is a densely populated area. It’s right by hospitals, by schools.”

Regunberg said he’s disappointed Providence Mayor Jorge Elorza isn’t taking a stand against the LNG project.

The city’s Sustainability Director Leah Bamberger says the administration’s goal is still to be carbon neutral by 2050. “Fossil fuels are certainly not a part of that in the long term,” she said. “And that’s a commitment that the city stands by. However, that’s a federal decision and we don’t have that type of say in the final decision.”

Bamberger said the city does have a seat at the table during the review process of the LNG project. The city planner is asking questions to make sure the project meets environmental and safety requirements.

Graves adds the company has safely operated its existing LNG storage facility at Field’s Point for 40 years. And he said the burden of paying for the project will not fall primarily to Rhode Islanders.

“I should also point [out] that LNG is absolutely vital to maintaining the stability of the gas distribution system, again, on those bitterly cold day,” said Graves, “so that people can heat their homes, and cook their food, and heat their hot water.”

Graves said natural gas pipeline constraints are responsible for skyrocketing electricity prices and these projects are meant to look out for electricity ratepayers.

Meanwhile, environmental groups and lawmakers say they will continue to advocate for other solutions that include renewable energy, conservation and energy efficiency.

The so-called “pipeline tax” is stuck in the Massachusetts Supreme Court, but it’s still under review in Rhode Island. 

Read More:
http://ripr.org/post/utility-companys-natural-gas-proposals-face-resistance-ri

PJM Approves Grid's Largest Efficiency Project as Part of $636M Transmission Investment

Utility Dive | August 11, 2016

The largest efficiency project PJM has ever undertaken bubbled up from its competitive process for transmission improvements, and is expected to be complete by 2020.

"This is PJM's largest-ever market efficiency project, and we expect it will resolve a significant amount of the remaining transmission congestion in the eastern portion of PJM," said PJM President and CEO Andrew Ott.

AEP affiliate Transource Energy, Baltimore Gas & Electric and Allegheny Power will be responsible for most of the project construction, which aims to reduce transmission congestion across the Pennsylvania and Maryland border. Plans call for upgrading existing substations, construction of a pair of new substations, two new transmission lines and other improvements to existing lines.

In addition, PJM's board also approved more than $316 million in other projects to maintain the reliability of the regional electric transmission grid. In December, the grid operator approved $490 million in new regional transmission projects.

The grid's Regional Transmission Expansion Plan targets system additions and improvements needed to keep power moving efficiently in the PJM territory, between the 13 states and the District of Columbia.

Key Points:

  • PJM Interconnection's board has approved more than $636 million in transmission projects that aim to strengthen the grid serving 61 million people, including the market's largest single efficiency project ever. The move comes after its board suspended the proposed Artificial Island transmission project earlier this week.

  • In a statement this week, PJM said the $320 million market efficiency project is expected to save $622 million over the next 15 years.

  • The board's decision pushes PJM's system improvements spending to $29 billion since the first Regional Transmission Expansion Plan was approved in 2000.

Read More:
http://www.utilitydive.com/news/pjm-approves-grids-largest-efficiency-project-as-part-of-636m-transmissio/424264/

Natural Gas and Oil Market Update

Arrow

Natural Gas Fluctuates in Choppy Trading After Inventory Report

The Wall Street Journal | August 11, 2016

Natural gas prices fell Thursday in a volatile session of trading after a weekly inventory report showed stockpiles grew more than expected.

The U.S. Energy Information Administration said Thursday that storage levels grew by 29 billion cubic feet of gas during the week ended Aug. 5. Analysts, brokers and traders surveyed by The Wall Street Journal had expected inventories to grow by 21 bcf.

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Oil Up 5 Percent As Saudis Mull Meeting, Tighter Market Forecast

Reuters | August 11, 2016

Oil prices rose about 5 percent on Thursday after comments from the Saudi oil minister about possible action to stabilize prices triggered a round of buying and the International Energy Agency forecast crude markets would tighten in the second half of 2016.

Saudi Energy Minister Khalid al-Falih said OPEC members and nonmembers would discuss the market situation, including any action that may be required to stabilize prices, during an informal meeting on Sept. 26-28 in Algeria.

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report

Summary
Working gas in storage was 3,288 Bcf as of Friday, July 29, 2016, according to EIA estimates. This represents a net decline of 6 Bcf from the previous week. Stocks were 389 Bcf higher than last year at this time and 464 Bcf above the five-year average of 2,824 Bcf. At 3,288 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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