Tuesday, June 23, 2015

Tuesday, June 23, 2015

Don sent me this link the other day; I don't think I posted it at the time. I don't recall. Regardless, here it is. I was unaware that hydroelectric power was struggling. I don't pay much attention to hydroelectric power; it's a regional "thing." But this is a bit more interesting. I particularly like the pie graph at the SeekingAlpha article:
According to the EIA, power plants in the Columbia River Basin, which include the Grand Coulee Dam, the largest electricity producing facility of any kind in the U.S., generate an average of 29 GW per year of electricity.
If these were to all shut down, it would take 5.8 BCF/day of natural gas, nearly 10% of average summertime demand, to replace this loss of electricity production. This would also be nearly twice the daily volume of gas that was shut in by hurricanes Katrina, Rita, and Ike last decade leading to natural gas price spikes.
While the Pacific Northwest power plants are by no means all shut down, they are certainly struggling. A year of drought and below-average wintertime snowfall to replenish the snowpack that feeds the watershed during the summer has led to decreased water flow across the region. Figure 3 below shows observed rainfall across five major cities in the Columbia River Watershed from the June 20, 2014, to June 19, 2015, year-long period.
The pie graph is interesting. Some takeaways (numbers rounded):
  • hydroelectric power is a regional story
  • the current hydroelectric power struggle is a temporary problem
  • coal still accounts for 40% of electricity in the US (I thought it was dead)
  • natural gas, 30%
  • nuclear, 20%
  • non-hydro renewables (mostly wind, solar, I presume): 5% (solar rounds to 0%)
The tea leaves:
  • electricity demand in the US will increase slightly going forward
  • nuclear energy (in terms of GW) won't increase; as a percentage will drop
  • solar and wind (in terms of GW) will barely move; as a percentage will drop
  • both wind and solar falling out of favor as more details come in
  • that leaves coal and natural gas
The market will sort this out.


Hey, by the way, did you all catch that boxcar story in the WSJ the other day. Either it's a non-story or either I don't understand the rail / intermodal system. The article:
A shrinking supply of boxcars—once the ubiquitous symbols of U.S. railroads and a rolling bellwether for the economy—is causing a freight-hauling crunch for industries that continue to use them.
The number of boxcars in service in North America fell by 41% in the past decade to slightly less than 125,000 last year as 101,600 cars were scrapped and only about 13,800 replacement were added. That downsizing accelerated a decades-long shift by railroads to more specialized railcars and intermodal carriers that allow shipping containers to hop from trucks to trains.
While the transition has worked fine for many shippers, paper manufacturers, lumber producers and other companies that rely heavily on boxcars to protect and move heavy shipments say the fleet has declined so much that they’re struggling with a boxcar shortage.
Paper and building products maker Georgia-Pacific LLC. has had to periodically slow production at some paper mills, and idled one mill for a short time recently when it couldn’t obtain boxcars to move its paper. The paper industry accounted for half of the 1.25 million boxcar loads in North America last year. 
Repeat from the lede:
That downsizing accelerated a decades-long shift by railroads to more specialized railcars and intermodal carriers that allow shipping containers to hop from trucks to trains. 
The industry says they may have to revert to trucks. I'm probably missing something, but the simple solution is for those industries complaining about not enough boxcars to shift from boxcars to intermodal cargo.

Something tells me this is simply a lobbying effort by "someone" to extend the life expectancy of existing boxcars (regulated by the federal government).

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