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In This Issue

Utilities Face More Emissions Cuts in Massachusetts

When the Sun Disappears Monday, Your Electricity Won’t

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

Utilities Face More Emissions Cuts in Massachusetts

Bloomberg | August 18, 2017

Massachusetts power generators face tighter greenhouse gas limits and new demands to purchase power from renewable sources as the state implements a law requiring deep emissions cuts.

However, some of the state’s utilities say the emissions limits, part of a package of new rules released Aug. 11, discount the steep reductions they have already achieved and will only drive up costs for ratepayers.

“That simply cannot be what was intended. Particularly when Massachusetts power plants have already cut carbon emissions by 60 percent since 1990, nearly twice the cuts of any other sector of the economy,” Dan Dolan, president of the New England Power Generators Association, Inc., said Aug. 11 in a statement.

The trade group represents Dynegy, PSE&G Power, Dominion Resources, and other companies. It has estimated the rules could raise regional electricity costs by $40 million per year.

The six new rules are designed to curb the state’s contribution to climate change and require power plants and natural gas companies to reduce their greenhouse gas emissions 25 percent from 1990 levels by 2020. The Massachusetts Department of Environmental Protection issued the rules to bring the state into compliance with a 2008 climate change law after a successful lawsuit brought by the Conservation Law Foundation.

Other companies, like Eversource, an electric and gas supplier, backed Massachusetts’ latest efforts.

The company is “supportive of the Commonwealth’s work to address climate change,” Rhiannon D’Angelo, a spokeswoman, told Bloomberg BNA Aug. 11, in an email.

Fewer Emissions, More Renewables

Under Massachusetts’ climate change law, the state’s 21 major fossil fuel-fired power plants must collectively reduce their carbon dioxide emissions from an estimated 8.96 million metric tons in 2018, down to 1.8 million metric tons in 2050. The 2008 Global Warming Solutions Act eventually requires the state to reduce its greenhouse gas emissions by 80 percent from 1990 levels by 2050.

Starting in 2018, 16 percent of power purchased by electric utilities must be renewable energy, such as solar, wind, and hydro power. The amount increases 2 percent annually until 2050, when 80 percent of an electric company’s power must comes from renewables.

Additionally, gas companies will have to meet annual, declining limits on methane emissions and replace older, leak-prone pipes, among other requirements.

Climate a ‘Top Priority’

“Combating and preparing for the impact of climate change remains a top priority of our administration, and requires collaboration across state government and with stakeholders throughout Massachusetts,” Gov. Charlie Baker (R), said in an Aug. 11 statement.

The legislature is considering bills that would set emissions targets for 2030 and 2040 and environmental advocates want electric cars to be part of that plan.

“The major goal has to be electrification of motor vehicles,” Bradley Campbell, president of the Conservation Law Foundation, told Bloomberg BNA Aug. 11.

National Grid, a supplier of electricity and gas in Massachusetts, also called for more electric cars on the road to reduce greenhouse gas emissions further.

“The transportation sector accounted for more than 40 percent of greenhouse gas emissions in 2003,” Bob Kievra, spokesman for National Grid, told Bloomberg BNA Aug. 11 in an email.

Read More:

When the Sun Disappears Monday, Your Electricity Won’t

Think Progress | August 18, 2017

The last time the United States witnessed a full solar eclipse was 1979. America’s electricity picture has changed dramatically since then — states now rely more heavily on solar energy, and that trend is prompting questions and concerns regarding how the nation’s electric grid will handle Monday’s full solar eclipse.

Industry experts, however, agree there’s nothing to fear. They’ve concluded there’s little chance the eclipse will cause any reliability problems in regions with large amounts of solar capacity along its path.

The North American Electric Reliability Corporation, the electric grid monitor for the continent, conducted an in-depth analysis and concluded the eclipse will have no impact on the reliability of the nation’s power system. Grid operators and electric utilities that rely on solar energy for a considerable portion of their generating capacity are reassuring customers they are prepared for the eclipse.

The eclipse will at least partially obscure the sunlight from about 1,900 utility-scale solar photovoltaic power facilities. The path of the total eclipse will span the United States, starting in Oregon and moving eastward to South Carolina over the course of approximately 90 minutes.

The pace of solar energy installations has increased significantly over the past decade and has continued into 2017. After installing almost 2,100 megawatts of solar capacity during the first three months of this year, the United States now has nearly 45,000 megawatts of solar capacity.

“The fact that we’re even talking about solar in the context of this eclipse is a huge testament to the clean energy progress that we’re seeing in states all along the path of the eclipse,” Rosalind Jackson, a director at Vote Solar, a national solar advocacy group, told ThinkProgress. “Once little more than a rounding error in our nation’s energy mix, the U.S. now has enough solar capacity installed to power 8.7 million American homes and employ more than 260,000 solar workers.”

The eclipse will have a predictable and manageable impact on the nation’s solar production. Regional grid operators have had plenty of time to plan and are confident that they will be able to keep the lights as solar productions dips, Jackson said.

Nuclear, coal, and natural gas generating facilities often are idled for weeks or months as they undergo regular maintenance or refueling. Solar energy facilities rarely face outages of similar lengths.

“Take a look at California where more than 6,400 megawatts of natural gas and nuclear power — enough to power 7 million homes — were unavailable for service during a June heat wave that cause generator malfunctions,” Jackson said. “Meanwhile, solar was able to tap that same summer sunshine to produce reliable power.”

The next full solar eclipse is not scheduled to affect a portion of the United States for another seven years. Nevertheless, when that solar eclipse occurs in 2024, the amount of solar power connected to the grid is expected to increase significantly, so changes will need to be made between now and then to ensure the grid can handle an even greater percentage of generating capacity going off-line for an hour or longer.

Solar’s increasing competitiveness against other technologies has allowed it to quickly increase its share of total U.S. electrical generation, from just 0.1% in 2010 to 1.4% today. By 2020, solar is expected to surpass 3% of total generation and is expected to hit 5% by 2022, according to the Solar Energy Industries Association.

Actual disruptions of the electric power system, however, typically do not occur when the disturbance, like Monday’s solar eclipse, is predicted to the precise day and hour, Mike Jacobs, senior energy analyst in the climate and energy program at the Union of Concerned Scientists, wrote in a blog post on the eclipse. They are most often caused by trouble with electric distribution and transmission lines, he said.

“We can resist the fear that ‘the sun won’t shine’ used to attack renewable energy,” Jacobs said. “The power supply is always prepared for swings of more sudden losses than this — those that come from man-made, not natural, plant failures.”

Opponents of renewable energy have found a champion at the Department of Energy where Secretary Rick Perry ordered his staff to conduct a study of the nation’s electric grid to find out if renewable energy sources are harming electric power reliability. DOE has yet to release the study — it’s almost two months overdue — but other researchers have noted the presence of high amounts of renewable energy in Europe has not made the grid less reliable in those nations.

In 2015, the European power grid, after months of preparation, easily handled the drop-off of solar power generation during a total solar eclipse and dealt with the photovoltaic panels coming back online with equal success. In preparation for Monday’s eclipse, grid operators in California and utilities in the Southeast have studied how Europe successfully handled the 2015 eclipse and have developed similar plans to ensure grid reliability during this rare event.

Utilities and grid operators in these regions have plotted out comprehensive demand management strategies and have arranged substitute energy sources to dispatch as needed during the time where the shadow of the moon is directly over an area, according to the American Council on Renewable Energy, a renewable energy industry group.

Based on the amount of sunlight obscured for each of the state’s generators, California’s grid operator estimates that the state will experience a reduction in solar generating capacity of almost 4.2 gigawatts during the eclipse, which is estimated to partially darken the state from 9:02 a.m. to 11:54 a.m. local time, according to the U.S. Energy Information Administration. An estimated 6,000 megawatts of grid-connected storage is expected to support California’s grid through ramping and other support services. (Ramping is an energy storage service that allows generators to quickly increase or decrease electricity production over a short period of time.)

In North Carolina, Duke Energy, one of the largest utilities in the state, estimates that solar energy output across its system will drop from about 2.5 gigawatts to 0.2 gigawatts at the height of the eclipse. The utility said it does not expect any reliability issues during the eclipse.

“Solar is an important part of our nation’s electricity mix and will continue to be so in the hours leading up to the eclipse and immediately following. Our nation has been preparing for this for more than a year and grid operators are confident they are ready to maintain electricity during the three hours of impact,” Dan Whitten, vice president of communications for the Solar Energy Industries Association, said in a statement.

Read More:

Natural Gas and Oil Market Update


Oil Prices Climb As Oil Rig Count Drops | August 18, 2017

The number of active oil and gas rigs in the United States fell this week by 3 rigs as drillers in the United States proceed more cautiously as oil prices fail to sustain any significant increase. Combined, the total oil and gas rig count in the US now stands at 946 rigs, up 455 rigs from the year prior, with oil rigs in the United States decreasing by 5 and gas rigs increasing by 1.

Oil rigs in the United States now number 763—357 rigs above this time last year. Canada lost 6 oil rigs this week, with the number of gas rigs holding steady—for a total of 214 oil and gas rigs—93 above the year ago levels.


US Natural Gas Futures Are Near a
4-Week High

Market Realist | August 18, 2017

September US natural gas (GASL) (FCG) futures contracts rose 1% to $2.92 per MMBtu (million British thermal units) on August 17, 2017. Prices are near a four-week high due to the following factors: an expectation of warm weather and bottom fishing.

US natural gas active futures hit $1.68 per MMBtu on March 4, 2016—the lowest level in 17 years. In contrast, prices hit $3.99 per MMBtu on December 28, 2016—the highest level in more than two years. Moves in natural gas prices impact gas producers like EQT (EQT) and Cabot Oil &

EIA - Weekly Natural Gas Storage Report

EIA - Weekly Natural Gas Storage Report

Working gas in storage was 3,082 Bcf as of Friday, August 11, 2017, according to EIA estimates. This represents a net increase of 53 Bcf from the previous week. Stocks were 254 Bcf less than last year at this time and 55 Bcf above the five-year average of 3,027 Bcf. At 3,082 Bcf, total working gas is within 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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