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Potential for the Warmest Winter in 62 Years

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Lack of weather related demand this winter has driven the natural gas market toward 10-year lows and allowed inventory stockpile levels to reach all-time highs. 

Data from the Energy Information Administration (EIA) through the week ending January 27 reports that natural gas storage levels are at 2,966 Bcf, about 375 Bcf higher than the previous record high of 2,571 Bcf set in 2007 during the same week.  In addition, the surplus in storage levels to last year and the five-year average continues to expand as a result of 12% lower population-weighted heating degree days (HDD) versus the 30-year average. …
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NYMEX Natural Gas Has a Volatile Week: Production Cuts & Weather Forecasts

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On Jan. 23, the NYMEX February gas contract hit a 10-year low of $2.231/mmbtu, a price last seen in March 2002.  Monday began what turned out to be a volatile week as Chesapeake Energy (CHK), the second largest gas producer, announced revisions to their 2012 outlook with an immediate cut in gas production and the possibility of further cuts.  The announcement sent the NYMEX rallying 38 cents, or as much as 17% on Monday and further gains were made throughout the week.  On Thursday, the rally stalled as weather forecasts for February continued to come in warmer than normal, returning…
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Will Natural Gas Storage Reach Full Capacity?

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Underground natural gas storage is at a record level and is poised to stay that way throughout the remainder of 2012.  The glut of natural gas stems partly from the energy industry’s success with new and more efficient drilling techniques that has allowed production to skyrocket in areas known as shale formations.  While production has been increasing, demand for natural gas has not been able to keep up, forcing producers to put their natural gas into storage. 

The mild winter across the country has added to the supply/demand imbalance.  During the winter season, natural gas is withdrawn from storage to…
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Natural Gas Prices Crumble Below $3 As Mild Weather Remains In Forecast

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After holding at the psychologically important level of $3/MMBtu for several days, the natural gas prices on the Nymex finally broke down this week after forecasts for mild weather led to fears that sustained heating demand would not arrive this winter.

Prices for February delivery opened the week at $3/MMBtu but quickly declined through and are currently $2.65/MMBtu, a drop of 12% on the week and bringing prompt month prices to the lowest settlements seen since September 2009. Although some of the major weather forecasters to the energy industry have noted there will be bursts of winter weather over…
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CSAPR Rule Postponed

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On December 30, 2011 the United States Court of Appeals for the D.C. Circuit issued a ruling to stay the controversial Cross-State Air Pollutions Rule (CSAPR), which was scheduled to take effect on January 1, 2012. The CSAPR regulation is designed to reduce power plant emissions in 27 states that the Environmental Protection Agency (EPA) claims contribute to harmful levels of Sulfur Dioxide (SO2) and Nitrogen Oxide (Nox), byproducts of the combustion process.

The D.C. Circuit Court is scheduled to hold hearings as early as April 2012 to rule on full merits of case. In the meantime the EPA…
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Implications of the Maximum Achievable Control Technology (MACT) Standard

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The EPA has revealed the final rules that would curb mercury and 84 other toxic chemicals from U.S. power plants.  These rules would implement a provision of the Clean Air Act (CAA) known as the Maximum Achievable Control Technology (MACT) standard or Mercury and Air Toxics Standards (MATS).  The EPA believes they will affect about 1,400 coal-fired units and oil-fired units at about 600 power plants that emit harmful pollutants.  The EPA ruling has given coal and oil plants until 2016 to comply with the rules and finish their retrofits and/or closures.    

Critics of the MACT rule have argued…
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