Active rigs:
| 7/23/2014 | 07/23/2012 | 07/23/2011 | 07/23/2010 | 07/23/2008 | |
|---|---|---|---|---|---|
| Active Rigs | 195 | 209 | 182 | 138 | 74 |
RBN Energy: Burning natural gas this summer -- bluntly put: Texas will consume its own stored supplies to meet in-State needs first – depriving other States of a helping hand if need be. So low storage levels in Texas will likely have more impact out of State than in.
There is still a lot of summer left in Texas. Some say summer in the Lone Star state runs from Cinco de Mayo through the middle of the high school football season, which sounds about right. But so far at least, a combination of moderate electricity demand and relatively high natural gas prices has resulted in a decidedly non-stellar gas power burn. That is good news for those eager to see the state’s—and the nation’s—gas storage levels rebound from unusually low levels after the hard, cold winter of 2013-14.
In this episode of our region-by-region series on gas power burn vs. gas storage rebuilding, we look at the Electric Reliability Council of Texas region, where gas-fired generation is king.
In Part 1 of Should I Store or Should I Burn, we recounted how the polar vortices in January and February (and colder-than-normal weather in December 2013) resulted in record draw-downs in stored natural gas. By late March, gas storage levels in the Lower 48 states had declined to 822 Bcf—the lowest in 11 years.
In Part 2 we looked at the gas power burn/gas storage rebuilding interaction in New England, which was hit more than any other region this past winter by gas pipeline constraints.
And in Part 3 we considered the PJM region and New York, which of course are benefiting from surging gas production in the dry Marcellus and, more recently, the wet Marcellus and Utica as well.
This time we consider Texas. The Lone Star State remains the nation’s largest natural gas producer, averaging 20.2 Bcf/d in 2013; 3.9 Bcf/d, on average, was consumed by electric power producers in the state last year, according to the US Energy Information Administration (EIA).
The polar vortex this past winter resulted in larger-than-normal withdrawals from national and Texas gas storage facilities.
Texas has more than a dozen salt cavern-based gas storage sites (more than any other state), as well as nearly 20 depleted gas fields now being used for gas storage. Taken together, they offer maximum storage capacity of 830 Bcf (246 Bcf in the salt caverns and 585 Bcf in the depleted fields).
In March 2013 (that is, after the winter of 2012-13) stored gas levels in Texas bottomed out at 567 Bcf (off from 745 Bcf in November 2012).
By October 2013, Texas’s stored gas had rebounded to 730 Bcf (only 2% less than its fall-of-2012 peak) but by March of this year in-state storage levels had plummeted to 418 Bcf, 26% lower than a year earlier and the lowest in the state since February 2004.
That is a deep hole to fill, particularly in a state that consumes more natural gas than any other to produce electricity. (It is worth noting that with Marcellus-sourced gas dominating Northeast gas markets, the inter-regional significance of Texas gas storage is less than it once was.)ObamaCare: banning federal health exchanges in ObamaCare was not an oversight, or a technical glitch. It was the only way the bill was going to get passed. The question is whether there is enough "wiggle room" for Supreme Court Chief Justice to reverse the decision if it holds in the appeals court.
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