The U.S. Energy Information Administration reported last week that natural gas in storage increased by 16 Bcf. There was an injection for the same week last year of 57 Bcf while the five-year average injection is 63 Bcf. Total U.S. natural gas in storage stood at 2,482 Bcf last week, 17.1% less than last year and 6.9% lower than the five-year average for this time of year.
All-time record-high temperatures across the Western U.S. have resulted in forced plant outages, grid constraints, and surging prices in the region. While June spot market power prices were up year over year throughout the entire US, the West saw prices rally 350%. In the New England, a region that also experienced high temperatures in June, power prices were up 100% year-over-year. Highly correlated with power markets, natural gas markets in the US have also continued to rise. Yesterday, on July 12th, NYMEX trading prices for the balance of 2021 settled at $3.778/Dth and prices for calendar year 2022 settled at $3.238/Dth. Trading prices for those delivery terms have not seen those levels since 2016.
With the heat wave straining California`s already stressed grid, the state’s grid operator, CAISO, put in effect a “flex alert” since early June and has called on residents and businesses to practice energy curtailment. Yet the continued extreme heat in the west has triggered new concerns over grid reliability, with the state also having limited hydropower – a corollary to the historic drought conditions also plaguing the region.
With many regions in the West starting to resemble the surface of Venus and even skin melting conditions experienced from British Columbia to Saskatchewan—yes 121 F in Canada— the general public is growing increasingly concerned about whether these events are indicative of a changing climate and perhaps, a new normal. Right on cue, a report submitted by scientists at World Weather Attribution last week, found that a heatwave this severe “was virtually impossible without human-caused climate change.”
The analysis determined that the “heat dome” event — caused by an extreme high-pressure system over British Columbia, Washington state and Oregon that blocked typical, cooling ocean breezes — transformed an area known for its temperate climate into a virtual desert, melting sidewalks and exposed plastics, and causing upwards of 500 deaths . The analysis found that the temperatures observed in the Pacific Northwest “were so extreme that they lie far outside the range of historically observed temperatures,” and described that existing modeling estimates it at “about a 1-in-1,000 year event in today’s climate.” The critical question remains, “what exactly can we expect from “today’s” climate?
A study completed by personal finance company WalletHub, found that New England and the South possess four out of five of the most expensive states for consumer energy cost. The study found Connecticut to be the most expensive state, with an average residential energy cost of $411/month for consumers. Connecticut was follow by Wyoming, Massachusetts, Georgia and Alabama as the next four most expensive states, descending in that order.
Connecticut took the number one spot by having the third highest electricity cost, in addition to high heating costs for both natural gas and fuel oil. On the other side of the spectrum, the three “cheapest” states for energy are Washington, Colorado and Oregon, according to WalletHub. These states have some of the cheapest average electricity bills in the country, limited heating needs, and inexpensive gasoline.
The analysis pulled data from a number of publicly available resources, including the U.S. Census Bureau and the U.S. Energy Information Administration, and followed a formula that summarizes average total costs for electricity, natural gas, heating oil, and motor fuel to establish the rankings.
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