U.S. gas glut is disappearing: Kemp

[thackney]

U.S. gas glut is disappearing: Kemp
http://www.reuters.com/article/us-usa-natgas-kemp-idUSKCN0ZS2AK
Jul 12, 2016

U.S. natural gas prices have risen by a third since hitting a two-decade low in the first quarter, amid signs supply and demand are rebalancing and excess stocks left over from an unusually warm winter are being worked down.

The volume of gas in working storage hit a record 4.01 trillion cubic feet in November 2015 and is still at 3.18 trillion cubic feet, according to the U.S. Energy Information Administration.

Gas stocks are 513 billion cubic feet (19 percent) higher than in the same week in 2015. But the build has shrunk steadily from a record 1.014 trillion cubic feet (69 percent) in March.

In response to the earlier slide in prices, the number of rigs drilling for oil and gas across the United States has fallen to the lowest level since World War Two.

By the start of June 2016, there were just 82 rigs drilling for gas, down from over 300 in June 2014, according to services company Baker Hughes.

Output from the unusually productive wells drilled into the Marcellus and Utica shale formations underneath Pennsylvania and Ohio has continued to increase.

But output from older gas-producing states including Texas, Louisiana and Oklahoma has fallen sharply as drilling activity has dried up.

For the United States as a whole, there are no longer enough new oil and gas wells being drilled to replace declining gas output from old wells.

Gross withdrawals of gas from wells were down by nearly 2 percent in April 2016 compared with the same month in 2015 (tmsnrt.rs/29tgDSs).

At the same time, gas consumption is rising, with deliveries to industrial customers and electric power producers sharply up....

[Joe Wooten]

Latest Henry Hub Spot price....




LNG exports are assisting in the glut reduction too....

[Free Vulcan]

Economically this is ominous, as we have closed so many coal plants for nat gas that rising prices would hurt the poor and fixed income folks if demand began to outstrip supply. And at some point then you'd have to start thinking of brown outs.

[Smokin Joe]

Economically this is ominous, as we have closed so many coal plants for nat gas that rising prices would hurt the poor and fixed income folks if demand began to outstrip supply. And at some point then you'd have to start thinking of brown outs.

If the politicians had been thinking, they would have been thinking of brownouts before they started the war on Coal. The poor are just a pawn to manipulate in election years, feed bread and circuses the rest of the time, and occasionally chase out of the streets.

[Fishrrman]

Smokin Joe wrote:
"If the politicians had been thinking, they would have been thinking of brownouts before they started the war on Coal."

It was the left that waged a so-far-successful "war" on Coal.

If Trump wins, I expect to see the war dismantled very quickly.

[montanajoe]

Curious what the graph would look like compared to the rig count....

[thackney]

Curious what the graph would look like compared to the rig count....

Key Fundamental Drivers that Impact Natural Gas Prices
http://marketrealist.com/2016/07/natural-gas-prices-fell-despite-hot-summer-weather-forecast/

[thackney]

Economically this is ominous, as we have closed so many coal plants for nat gas that rising prices would hurt the poor and fixed income folks if demand began to outstrip supply. And at some point then you'd have to start thinking of brown outs.

I don't see the US NatGas supply in any danger of not meeting supply in addition to greatly expanded NatGas exports.

[Smokin Joe]

Smokin Joe wrote:
"If the politicians had been thinking, they would have been thinking of brownouts before they started the war on Coal."

It was the left that waged a so-far-successful "war" on Coal.

If Trump wins, I expect to see the war dismantled very quickly.

Not me. Not after his performance in Iowa backing the Renewable Fuels Mandate and pledging to  use the EPA to the fullest extent of the law to enforce it.

The EPA isn't going anywhere under Trump. Too much power concentrated there to pick winners and losers, and that lines pockets. What was the deal-breaker, then and there, was the idea that he would be retaining or strengthening the one agency responsible for the moving target standards which have destroyed American industry by exsanguinating it fiscally in compliance attempts, in concert with tort law and taxation.

Besides, the billions of dollars lost will not be reclaimed, the plants, once shut down can't be turned on like a light switch, the mines closed will not be easy to reopen, the equipment sold for pennies on the dollar or scrapped will not be replaced at current prices, and many will not turn a profit again. 

[Smokin Joe]

I don't see the US NatGas supply in any danger of not meeting supply in addition to greatly expanded NatGas exports.

The bottom line is that before the rig count increases, the price will. Now the price of natural gas isn't jsut tied to heating homes and some industrial applications, it is tied to producing electricity as well, at least for a larger market share of electrical consumers. Price changes will affect a larger group of people now, than they would have before so much electrical generation was converted to gas fired.

[IsailedawayfromFR]

Now the price of natural gas isn't jsut tied to heating homes and some industrial applications, it is tied to producing electricity as well, at least for a larger market share of electrical consumers. Price changes will affect a larger group of people now, than they would have before so much electrical generation was converted to gas fired.

I also believe that an increasing amount of that NG production for electricity comes from NG backup generation capacity installed at wind and solar farms as well.  Those farms are notorious at not able to make stated capacity output and are unreliable most of each day.

Why not burn NG with equipment sitting idle anyway with reliable output and cheap fuel?

[Smokin Joe]

I also believe that an increasing amount of that NG production for electricity comes from NG backup generation capacity installed at wind and solar farms as well.  Those farms are notorious at not able to make stated capacity output and are unreliable most of each day.

Why not burn NG with equipment sitting idle anyway with reliable output and cheap fuel?

Why are we subsidizing the wind and solar farms if they can't produce?

[IsailedawayfromFR]

Why are we subsidizing the wind and solar farms if they can't produce?

A question to ask our congressmen.  Paul Ryan.believes in them.

[thackney]

I also believe that an increasing amount of that NG production for electricity comes from NG backup generation capacity installed at wind and solar farms as well.  Those farms are notorious at not able to make stated capacity output and are unreliable most of each day.

Why not burn NG with equipment sitting idle anyway with reliable output and cheap fuel?

Not using coal is the major reason for the increase in natural gas.  Look where the values have changed.



Natural gas-fired electricity generation expected to reach record level in 2016
http://www.eia.gov/todayinenergy/detail.cfm?id=27072



http://www.eia.gov/forecasts/steo/report/electricity.cfm

[IsailedawayfromFR]

Not using coal is the major reason for the increase in natural gas.  Look where the values have changed.



Natural gas-fired electricity generation expected to reach record level in 2016
http://www.eia.gov/todayinenergy/detail.cfm?id=27072



http://www.eia.gov/forecasts/steo/report/electricity.cfm

Yes, am sure it is.  Have you seen anywhere the cumulative installed wind and solar power generation capacity over time to compare with the actual usage?

From what I had seen at one time, it is a pretty poor picture of online time as well as over-estimated generating capacity of wind and solar.

[thackney]

Have you seen anywhere the cumulative installed wind and solar power generation capacity over time to compare with the actual usage?

From what I had seen at one time, it is a pretty poor picture of online time as well as over-estimated generating capacity of wind and solar.

Installed capacity of wind and solar is never intended to come close to a base load unit.  It isn't a real comparison.

It should just be a comparison of cost per kwh.  Nothing else really matters, but the run time is part of that cost per kwh.  And without subsidies, please...

[IsailedawayfromFR]

Installed capacity of wind and solar is never intended to come close to a base load unit.  It isn't a real comparison.

It should just be a comparison of cost per kwh.  Nothing else really matters, but the run time is part of that cost per kwh.  And without subsidies, please...

So there is never an intention to actually generate the installed capacity a unit is capable of?   Why?

Is this like a car engine rated at 250 hp that rarely if ever actually generate that much?

Trying to understand the reasoning here.

I have been reading that some of these solar generators were over-rated when installed and could never generate the announced capacity.  Also, was interested in downtimes for solar and wind compared to say coal or gas.

Both of these items offer a chance to compare the % of actual generated power of various fuel-fired generators with the claimed installed capacity for I suppose an efficiency comparison.

[thackney]

So there is never an intention to actually generate the installed capacity a unit is capable of?   Why?

Is this like a car engine rated at 250 hp that rarely if ever actually generate that much?

Trying to understand the reasoning here.

I have been reading that some of these solar generators were over-rated when installed and could never generate the announced capacity.  Also, was interested in downtimes for solar and wind compared to say coal or gas.

Both of these items offer a chance to compare the % of actual generated power of various fuel-fired generators with the claimed installed capacity for I suppose an efficiency comparison.

Maximum output rarely occurs since most of the time you don't get maximum wind or maximum sunshine.

[IsailedawayfromFR]

Maximum output rarely occurs since most of the time you don't get maximum wind or maximum sunshine.

I understand all that. What I am trying to understand is the percent of installed generating capacity the actual generation of power is realized.

As an example, solar can never be more than the time of sunlight during the day, so on average during the year the absolute highest this percent can be is 50%.  This is likely unattainable and the percent is far less as

1. the sun is at its highest only a percentage of the average day in any year. Morning and evening sun is not nearly as powerful as during noon.
2. there are clouds of course obscuring panels.
3. there is downtime for maintenance
etc, etc.

could all of this realize a percentage of actual/maximum installed = 20% or lower? what about wind?

My entire point is that coal and gas is a much, much higher realization of way over 50%, so the installed quoted MW capacity of coal or gas is much more efficient than the installed quoted capacity of wind or solar.  Means the press reports of 'renewables' are exaggerating its effect when one compares hydrocarbons.

[Joe Wooten]