Natural Gas Demand Hits Record As Cold Bomb Targets Northeast
https://www.forbes.com/sites/christopherhelman/2018/01/03/natural-gas-demand-hits-record-as-cold-bomb-targets-northeast/#5bd7645faacdJAN 3, 2018
...Brutal cold brought record low holiday temps from the midwest through New England. Boston hasn't seen such a cold spell since 1872. Power prices in New England have exploded to $190 per megawatt-hour today, with a peak last night of $289 per mwh (versus an annual median closer to $50 per mwh). It could get worse. A snow-and-ice bomb is on its way up the eastern seaboard, bringing with it the potential for hurricane-force winds off the coast. Tallahassee, Florida this morning saw its first snow in 28 years. Ice cover on the Great Lakes is expanding rapidly. Cape Cod could get a foot of snow.
To keep America warm, power plants are burning a record amount of natural gas -- 143 billion cubic feet per day. (Compare that with 125 bcfd during the 2014 Polar Vortex.) In Boston natural gas for prompt delivery exploded in price to $35 per million British thermal units, making it the priciest gas market in the world.
Boston can't get enough methane at any price. But with prices like that, a crowded field is working to close the arbitrage. Utility company Eversource imports LNG into Boston harbor to meet winter need, but that requires a specialized port. There's fewer barriers to entry when it comes to fuel oil -- it's easy to transport, store and burn. But the drawback of generating electricity from oil is that it (usually) costs far more than methane for the same amount of energy, while its carbon intensity is as bad as coal....
