Hurricane Ida was recorded as the second most powerful storm behind Hurricane Katrina which destroyed much of the state 16 yrs ago, causing damage and power outages through Louisiana. According to President Archie Chaisson, about 14,000 people in one Louisiana parish are without homes and Hurricane Ida damaged or destroyed 75% of the structures. The storm also caused destruction to the regular supply of oil and other projects in and around the Louisiana region. After the storm made landfall on Aug. 29, the damage to U.S. offshore energy production shut about 79% of the region's offshore oil production and 79 production platforms are unoccupied. Approximately 17.5 million barrels of oil have been lost to the market to date, with shutdowns expected to continue for weeks. According to energy analysts, Ida could reduce total U.S. production by as much as 30 million barrels this year. The state of New York was also impacted heavily from the storm with claims of 50 deaths. Gov. Kathy Hochul said the initial assessment of the damage Ida left behind in New York is estimated as at least $50 million.
On Aug. 27, PJM and its stakeholders shared perspectives on reform for interconnection policy; long-term regional and interregional transmission planning; and transmission modernization. PJM presented data showing most (1,560) of the 1,826 proposed generation resources in PJM’s interconnection queue lie within 100 miles of metropolitan load centers. "The takeaway is that 85% of all future resources are within 100 miles of a load center,” David Souder, Executive Director Planning, said. While renewable resources account for more than 90% of the 135,588 MW actual capacity in PJM’s Interconnection queue, it is estimated that only 35%, or 47,452 MW, of these generation projects are expected to come into service.
Solar panels are the most popular renewable energy as the U.S. and Europe promote clean energy and become less reliant on fossil fuels. However, most of the install panels are created in China are with carbon-dioxide-belching, coal-burning plants in China. According to industry analyst Johannes Bernreuter, Chinese factories supply more than three-quarters of the world’s polysilicon, which is an essential component in most solar panels. Producing a solar panel in China creates around twice as much carbon dioxide compared to if it was being made in Europe, said Fengqi You, professor of energy systems engineering at Cornell University. Alternatives to China’s cheaper polysilicon production are difficult and have harmed U.S. producers, which has shutdown several factories that use power sources with lower carbon emissions than Chinese producers. “However not all Chinese manufacturers are relying on fossil fuels, Tongwei, the world’s largest producer, has some factories that run on hydropower, but it is still a far cry from the number of coal-burning plants. Large energy buyers can influence supply chains,” said Jen Snook of the Renewable Energy Buyers Alliance, which represents Amazon.com Inc., Salesforce.com Inc. and more than 200 other corporations.
General Market Update
- The October 2021 NYMEX Henry Hub traded to $4.615/MMBtu, up $0.69 (+17.6%) from the previous Wednesday. The price of the 12-month strip averaging October 2021 through September 2022 futures contract was up $0.41 (+11.2%) to $4.066/MMBtu.
- Boston’s Algonquin Citygate price went down $0.35 (-8.1%) to $3.97/MMBtu last Wednesday. Transco Zone 6 NYC price decreased $0.13 (-3.3%) to $3.86/MMBtu.
- Pennsylvania’s Eastern Gas South rose $0.11 (+2.9%) to $3.84/MMBtu. Tennessee Zone 4 Marcellus spot price increased $0.14 (+3.8%) to $3.82/MMBtu.
- SoCal Citygate price decreased $1.28 (-19.0%) to $5.46/MMBtu last Wednesday. The price at Northern California PG&E Citygate rose $0.63 (+12.1%) to $5.83/MMBtu week over week
Utility Highlight
- The upcoming Price to Compare for First Energy Potomac Edison in Maryland, Residential No Electric Heat rate class (RSNH) is $0.06552/kWh, in effect from September 1, 2021 to December 31, 2021.
- Negative Headroom in the POTED – RSNH territory is now present in the shorter periods for contract with 3 and 6 month term. Headroom of negative $0.03564/kWh is likely for the 3 month period and headroom of negative $0.04203/kWh is likely for the 6 month period; respectively.
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The current Price to Compare data for First Energy Potomac Edison in Maryland (POTED), General Service Commercial Small (GSCS) is $0.11404/kWh, in effect from September 1, 2021 to December 31, 2021.
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Headroom is available in the POTED – GSCS market for the shorter periods for contract with 3 and 6 month term. Headroom of $0.02211/kWh is likely for the 3 month period and headroom of $0.02451/kWh is likely for the 6 month period; respectively.
Storage
- For the week ending August 27th, 2021, the EIA reported net injections into storage of 20 Bcf, which is less than last year’s net injection of 36 Bcf this week last year and less than the 5-year (2016-2020) average net injections of 53 Bcf.
- Working natural gas in storage totaled 2,871 Bcf, which is 579 Bcf (-16.8%) lower than last year’s working gas totals of 3,450 Bcf at the same time and 222 Bcf (-7.2%) lower than the 5-year average of 3,093 Bcf. Total working gas is within the five-year historical range.
Supply/Demand
- Average total supply of natural gas fell 2.3% week/week. Dry natural gas production decreased by 2.4%, while net imports with Canada were unchanged compared with the previous week.
- Total US consumption of natural gas fell by 1.4% since last week. Natural gas consumption for power generation decreased 2.3%, industrial sector consumption decreased 0.6%, residential-commercial consumption was unchanged week over week, and exports to Mexico increased 4.1% compared to last week.
- US LNG exports increased week over week, with 20 vessels departing US ports for a combined 73 Bcf.
Weather
- A hot weather pattern for the Central United States is forecast through the 8-14 window starting September 9th. The middle of September 2021 brings a hot weather pattern for much of the USA as the Four Corners States, Midwestern States, Texas, Florida and Coastal Southern States are forecast for above normal temperatures. California, New York State and the New England States are forecast for normal temperatures.
- The Pacific Northwest, Ohio, West Virginia and Pennsylvania are forecast for below normal temperatures. Northern Texas and Oklahoma have the highest probability for much above normal temperatures.
- In the 8-14 day window from September 9th through September 15th, Texas, the Southern States, and the Middle Atlantic States are forecast for below normal precipitation. California, the Dakotas, Minnesota, Wisconsin, New York and the New England States are forecast for normal precipitation.
- The Pacific Northwest, Arizona and the Rocky Mountain States are forecast for above normal precipitation probability.
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