Replies to This Discussion

Permalink Reply by tc on March 27, 2014 at 5:16

We produce 26 TCF per year, so if demand drops by 4%, we have our extra 1 TCF.  Also during most of the 2000s we imported 3.6 TCF via pipelines from Canada and in 2013 it dropped to 2.8 TCF, so if prices get attractive enough we can import more NG from Canada.  What price is "attractive enough" I don't know.

My prediction is that NG production will increase a little, and prices will increase some so demand will drop some and we end the injection at 3.4 TCF instead of 3.8 TCF.  Then we wait and see if we have a 2014 or 2012 type of winter.  I agree that the buffer from price spikes has been eliminated with the cold winter, so any deviation from the norm will translate into price volatility.

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Permalink Reply by jim weyland on March 27, 2014 at 5:30

i don't know just how much, but we export a whole bunch of gas to mexico. i'm guessing if you root around the eia website, that number/volume could be found

Permalink Reply by tc on March 27, 2014 at 5:38

Pipeline exports to Mexico, .65 TCF for 2013.

Permalink Reply by ATLGator on March 27, 2014 at 5:58

From this article on the EIA website...http://www.eia.gov/todayinenergy/detail.cfm?id=10351

"Several U.S. pipeline export projects that could support additional natural gas exports to Mexico have been announced. According to company announcements, these projects are expected to be completed by the end of 2014 and, if they are all built, could add up to 3.5 Bcf/d of additional export capacity to Mexico, doubling existing capacity.

This additional capacity would serve an expected increase in natural gas demand from Mexico's electric power sector. Mexico plans to add about 28 gigawatts of new electric generating capacity between 2012 and 2027, mostly in northern Mexico, according to Comisión Federal de Electricidad (CFE)—Mexico's state-run electricity provider. CFE estimates that this could raise natural gas needs for power generation by 5.1 Bcf/d. This level of growth would likely require increased natural gas imports from the United States."

More exports to Mexico coming by the end of the year, early 2015...

Permalink Reply by ATLGator on March 27, 2014 at 6:03

	2014 Storage Level	5 year Min	5 year Max
Jan	407	444	649
Feb	259	325	588

 

These are in BCF. Canada has its own storage issues...

Permalink Reply by Joe Aldridge on March 27, 2014 at 7:39

Hey Guys,

Have you seen what's happened today in the markets? It looks like the market has had an epiphany. Its up all the way to the end of the year. Maybe someone else is seeing the same thing we are talking about.

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Permalink Reply by tony allen on March 27, 2014 at 12:12

Here is some insight.

https://rbnenergy.com/should-i-store-or-should-i-burn-will-power-bu...

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Permalink Reply by Joe Aldridge on March 28, 2014 at 2:45

Tony,

Thanks for posting. Very good article. I don't think the $4.46 will be the true value that we see before Winter 2014. The more realistic value should be over $4.50 but under $5.00 - maybe average out at $4.65 or so. I just could not understand the price falling like it has. That seems to have turned around though. Again, thanks for posting.

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Permalink Reply by tony allen on March 28, 2014 at 5:50

You are welcome, Joe.

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Permalink Reply by cocodrie man on March 28, 2014 at 6:08

I think it is too bad that cost/price of nat gas remains by far the primary factor in the generation of electricity. I live up and across the river from a coal fired generator in Pointe Coupee Parish and often find what I suppose to ash from that plant in water around here. What of the pollution issue? Is there no nat gas in Pointe Coupee? Why was a coal fired generator built above the Tuscaloosa Trend?

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Permalink Reply by jim weyland on March 28, 2014 at 6:43

cm,

electricity isn't my thing. having said that, the effective 'variable' cost of a megawatt/hour is determined by the cost of fuel and the plant's 'heat rate'. that is a measure of how many btu's of heat energy are needed to make a unit of electric energy. as a generalization, the newer the facility the better its heat rate is. 

note: there's one other tangible factor to the equation and its not insignificant, the sunk cost of capital needed to build the plant. exhibit 'a' to this is a nuke. they're clearly the low cost producer vis-a-vis fuel costs. its the high cost of building one that knocks them out of the box. they cost orders of magnitude more to build than equally sized gas or coal units.

i don't know enough to know as to whether a gas or coal unit is cheaper to construct. my guess is that a gas one is cheaper to construct.

there's another cost factor and its intangible, the so called social cost(s). there, clean gas is clearly superior to coal. and, in this one respect, imo, nukes would trump gas were it not for the japanese tsunami and other sorts of risks to deal with.

sorry you've got to put up with that coal unit. even the best of them is pretty dirty,

jim weyland

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Permalink Reply by Two Dogs, Pirate on March 28, 2014 at 11:11

A few years ago small NG power plants were proposed called Merchant Power Plants. I idea seemed like a good one to me. They would build the plant on top of a natural gas field that was right under the electrical grid then just upload the electricity into the grid. The problem was water. The rice farmers killed one plant down around Eunice because they thought that the plant would draw down the water table to a level that their wells would run dry. Another one was killed up around Ruston because of the locals thought that the Sparta Aquifer level may be reduced to a level where some wells may stop producing. The power grid, according to George W. Bush in his first run, was a two lane highway where it needed to be an eight lane highway. I don't think any more lanes have been added. By dropping several towers outside a large power house terrorists could turn out the lights. Seems like having many small generating stations would lesson the impact. The grid was built back in the late 1960's after the blackout of NYC in 1968. You cross under the grid while traveling between Opelousas and Lafayette it runs on the North side of I-10, you also cross under it between Robeline and Many in Sabine Parish.  

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