The US has retaken the position as the world's top renewable energy market for the first time in four years. For more on renewables and how the US stacks up, see "This Week's Take-Away" below.
Natural Gas in Underground StorageThe weekly EIA Natural Gas Storage Report advised today that there was an injection of 85Bcf into Underground Storage for the week ending 6/12/20.
This is inline with a forecast of an 85Bcf injection, the average prediction of sector analysts and traders in the Dow Jones Newswires weekly survey. This compares with an injection of B108Bf last year and a 92Bcf build for the five-year average. Storage is 804Bcf above last year for the same week and 419Bcf above the 5-year average. Working gas in storage stands at 2,892Bcf.
Natural Gas Pricing
As of 9:38AM CST, July 2020, (the prompt month) Natural Gas was trading at $1.63, -$0.18 from one week ago and the 1-Year Spread average was $2.35, -$0.09 from one week ago.
Crude Oil Pricing
As of 9:29AM CST, July, 2020, (the prompt month) Light, Sweet Crude on the NYMEX was at $38.30, +$1.41 from one week ago.
Crude Oil InventoryUS crude inventories (EIA) increased by 1.2 million barrels to 540.3 million for the week ended June 12th, according to data released yesterday morning by the US Dept of Energy. Traders in the Reuters poll expected a decrease of 0.2 million barrels.
U.S. Rotary Rigs
According to the Baker Hughes Count, US Rotary Rigs targeting Natural Gas were +2 at 78 for the week ending June 12th and -103 from last year.
Rigs targeting Crude were -7 at 199. There are 589 fewer rigs targeting oil than last year. Canadian Rigs were unchanged at 21 and -86 from last year. US Rigs drilling for oil drop 2% to 71% of all drilling activity.
GeopoliticalINSIGHT: Fuel Economy Rules Undermine U.S. Energy Security: The Trump administration’s decision to roll back fuel economy standards is based on a complete misunderstanding of the OPEC-led international oil market, argues General Carlton D. Everhart of Securing America’s Future Energy. He says the standards condemn the U.S. to greater reliance on a commodity controlled by countries that do not share U.S. strategic priorities—and can crash prices at any time they please.
While we are all staying home because of the coronavirus, the Trump administration was busy rolling out new fuel economy rules, and there is little to like about them.
And on May 27, attorneys general led by California’s Xavier Becerra (D) have attempted to block them. While we likely agree that new rules make our roads less safe by delaying innovation, security experts like myself worry that they will harm U.S. energy security by hampering a shift toward alternative fuels.
Yet perhaps the worst aspect of these new standards is the complacent attitude they take to our exposure to global oil market volatility—jeopardizing U.S. economic and national security—and what seems to be a complete lack of understanding of the cartel-led international oil market.
The oil challenge has been in the spotlight lately. Plummeting oil prices driven by factors beyond American control—both Covid-19 and the exploitation of the pandemic by Saudi Arabia and Russia to flood the market—have undermined the EPA’s principal argument at the time of the rules’ publication (Read More ...)
The AccuWeather 1-5 Day Outlook forecasts above-normal temps for the Northeast, The Western Gulf states the Great Lakes states and a swath of Central states, cutting through North Texas. The Carolinas, and parts of the North-Central states are predicted to be at below-normal temps with the balance of the country at normal temps.
The 6-10 Day Outlook forecasts above-normal temps for the entire East Cast and the Western third of the country. The balance of the states are projected to be at normal temps.
The 11-15 Day Outlook forecasts above-normal temps for Gulf States with the exception of Texas and Florida, as well as the balance of the Western half of the US. The balance of the states are expected to be at normal temps.
The 30-Day Outlook shows above-normal temps for the Western half of the US and the Great Lakes area, with the Eastern half of the country and all of Texas to be at normal temps.
The 90-Day Outlook shows above-normal temps for the Northeast and some of the Western states, with the balance of the country at normal temps.
Severe Weather: AccuWeather is projecting severe thunderstorms for South Florida, the center of the country and the Middle-Atlantic states. There will also be storm activity in Texas and the South-Central states next week. Oddly, Eden, Utah had several inches of snow the day before yesterday and Powder Mountain is expecting 7" over the next few days (Read More ...)
Sustainable and Renewable Energy
Plunging Renewable Energy Prices Mean U.S. Can Hit 90% Clean Electricity By 2035 - At No Extra Cost: Renewable energy has historically been considered too expensive and too unreliable to power our grid, but new research has overturned that trope for good. Plummeting wind, solar, and storage prices have fallen so fast that the United States can reach 90% clean electricity by 2035 – without raising customer costs at all from today’s levels, and actually decreasing wholesale power costs 10%.
Building a 90% clean electricity system by 2035 would catalyze massive economic growth that helps pull the U.S. out of the COVID-19 recession by supporting more than a half million new net jobs per year, injecting $1.7 trillion into the economy, and recharging domestic manufacturing. Technology-neutral policies can reach a 90% clean power system, help energy developers and investors prosper, and pave the way for technologies of the future.
90% clean electricity requires no new fossil fuel power plants, with all existing coal plants retiring in an orderly fashion and natural gas consumption falling 70% over time, so utilities can recover outstanding fixed costs and avoid stranded assets. These closures would reduce economy-wide emissions 27% by 2035, and avoid $1.2 trillion in environmental health costs from fossil fuel emissions by 2050.
Add it all up, and a 90% clean electricity system is a no-regrets blueprint for investing in America’s future, stimulating a healthier innovation economy, and creating new jobs – all without raising electricity bills (Read More ...)
This Week’s Key Take-Away
The US has retaken the top position in EY’s Renewable Energy Country Attractiveness Index (RECAI) for the first time since 2016. The US jumped to the top of the rankings because of a short-term extension to the Production Tax Credit and projected long-term growth in offshore wind, with plans to invest $57 billion and install up to 30GW by 2030.
China slipped to second due to reduced demand from Covid-19, as well as government policy to wean the market off subsidies and toward a competitive market. France jumped from fourth to third place, with awards of 1,4GW for wind and solar developers as the country opts to shift its energy mix away from nuclear.
Despite the pandemic affecting renewables projects in the short term, in the long term declining costs and technological advancements will continue to drive growth in the sector.
2019 saw the US add 9.1GW in wind energy capacity to create an overall 105.6GW, while 13.3GW of solar entered operation, bringing the total solar capacity to 77.7GW. The two sources together accounted for two-thirds of new generating capacity in 2019, with the rest mostly made up by natural gas.
In January, before Covid-19 impacted North America, the US Energy Information Administration (EIA) forecast a record year, with 18.5GW of wind and 13.5GW of solar going online. The predicted surge, especially for wind, was tied to the fact that projects started in 2016 needed to be operational by year-end to qualify for the Production Tax Credit. The federal tax incentive is worth 24/MWh for 10 years.