Replies to This Discussion

Permalink Reply by Paul Martinelli on April 10, 2013 at 9:15am

My opinion is "Stick a fork in it"  coal is done, and usage will continue to decline. NG is here to stay.

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Permalink Reply by The Crude Oil Trader on April 11, 2013 at 5:44am

Agreed, domestic use of coal is done. Question is will the trend get exported to China and India. A lot of really smart people in this country are banking on the rails for decades to come over the coal export trade.

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Permalink Reply by wyalusing jim on April 10, 2013 at 10:33am

many companies "come up" with reasons to restrict production. not just chk.

the best reason i can "come up" with is, because there's too much gas and the price is depressed.

there's simply no good reason to produce it all right now.

hold back, let the price recover, say...$5+, and then open the taps just enough to keep prices stable. of course i'm good with $15 gas too, i cant buy it to heat my home, and i dont care how much new york city has to pay.

wj

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Permalink Reply by Jon B Jenkins on April 10, 2013 at 10:52am

Inventories went from being really high to below the five year average in just a short time, sounds like the dairy business and cheese inventories. Makes me wonder who's reporting and how accurate.

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Permalink Reply by wyalusing jim on April 10, 2013 at 12:25pm

it was very cold nationwide during the drop to under the 5 year average. and actually, we are only 2% below the average.

there really isnt a whole lot of supply in storage either. without concurrent production, only a couple of months worth.

as far as accuracy, the government compiles the figures.

wj

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Permalink Reply by Jack Straw on April 10, 2013 at 2:34pm

RE: "it was very cold nationwide during the drop to under the 5 year average."

I believe that you have it backwards.

It was warmer than average nationwide during the drop to under the 5 year average of Natural Gas Storage."

Actually, the 2012-2013 heating season has been WARMER than average for the continental United States.

Since the previous winter was so warm, it only seems that the 2012-2013 heating season was cooler than average; it was not.

Also, the 2012-2013 heating season has been WARMER than average for our area.

The 2011-2012 heating season was much warmer than average … and warmer than the 2012-2013 heating season.

 

For the six months (October through March); only November and March were cooler than average. For the other four months (and the total of all six months), the 2012-2013 heating season has been warmer than average for our area. For the State of New York, the 2012-2013 heating season has been 6% warmer than average (when measured by Heating Degree Days).

 

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=...

 

All IMHO,

                   JS

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Permalink Reply by wyalusing jim on April 10, 2013 at 3:42pm

"Reply by Jack Straw

RE: "it was very cold nationwide during the drop to under the 5 year average."

I believe that you have it backwards."

not really, and elsewhere in your post, "For the six months (October through March); only November and March were cooler than average." you provided the proof that i was correct.

what i said was, that it was cold during the drop to under the 5 yr average which occurred in early april, which follows march, one of the coldest months as you posted.

i was hoping for a brutally cold winter during the traditionally coldest months, january and february, but it did not occur.

i was very surprised to see such a dramatic effect on storage numbers with a cold march and first week of april, pleasantly surprised, and that is exactly what i posted about, not the entire winter.

wj

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Permalink Reply by Jack Straw on April 10, 2013 at 4:16pm

March was only (very) marginally cooler than the 30 year average.

Believe what you wish, the facts indicate otherwise.

If you look at the curve published last Thursday by the DOE_EIA, you will see that the slope of the curve has not changed since December.

The statistics for the first week of April will not be released until tomorrow at 10:30 EDT.

Click on the plot to enlarge, data below is through March 29th.

 

 

 

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Permalink Reply by BirdDog on April 10, 2013 at 5:08pm

Jim,

Obviously the figures must not be accurate. We all know how good of a job our government does...So efficient and accurate 100% of the time.

 

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Permalink Reply by wyalusing jim on April 11, 2013 at 1:04am

" Reply by Jack Straw

March was only (very) marginally cooler than the 30 year average.

Believe what you wish, the facts indicate otherwise."

and it was during that time period that that the amount of gas in storage slipped under the 5 yr average. so what are you arguing about? that is simply what i stated.

if temperatures are below normal, it is very cold.

we are all going to believe what we wish, however i choose to believe in things of a factual nature. the facts bear me out on this one.

" The statistics for the first week of April will not be released until tomorrow at 10:30 EDT."

you are correct, i mispoke about the data for the first week of april. what i meant to say was that the report that came out in the first week of april is where gas went under the average, that report was for march, the colder than average march.

"If you look at the curve published last Thursday by the DOE_EIA, you will see that the slope of the curve has not changed since December."

yes thats correct jack, the slope remained close to the same through march, except for that little bend near the bottom. as indicated by the heavy blue line which is the 5 yr average, we would have more gas in storage (on average) at this point in time. the reason we have a little less gas now, is because it was a little colder in march, the month during which we slipped under the average.

do you understand now?

wj

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Permalink Reply by Jack Straw on April 11, 2013 at 4:43am

RE: “if temperatures are below normal, it is very cold.”

The problem is that for the six month heating season, the cumulative temperatures were warmer than the 30 year average. The cumulative temperatures for the six month heating season were above normal, it was not very cold.

 

RE: “the facts bear me out on this one.”

I posted my facts (source) in an earlier post.

Where are your facts? You have stated your perceptions, but have presented no facts.

Where is the data that would back up your perceptions? I believe that mentally contrasting last year’s very warm winter with this past winter has warped your perception.

If you chose to dispute the published Heating Degree Day data, please present hard data to dispute (not simply offer personal perceptions).

  

RE: “is because it was a little colder in march, the month during which we slipped under the average.”

The curve represents the cumulative effect of the entire six month heating season (one that was warmer than average for the continental USA). One month (March) does not make a winter. The reason we slipped under the average was because of the amount of Natural Gas that was withdrawn from storage during the previous five months … with the addition of March’s contribution (a March that was only marginally cooler than the 30 year average).

 

The important thing is to understand is why so much Natural Gas was withdrawn from storage during what was a warmer than average winter withdrawl season.

I consider that there are a number of reasons for that, some of which are:

Coal to Gas switching for electrical generation (some permanent, some likely temporary).  This was a biggy.

The Coal to Gas switching was due to current low Natural Gas prices, retirement of old obsolete (dirty) Coal fired power plants and  retirement of Coal fired power plants for environmental reasons. 

Increased domestic industrial use of Natural Gas as a feedstock.

Increased residential use of Natural Gas as it displaces other fuels (fuel oil, electricity).

Continuing decline of conventional gas fields (with little new drilling for conventional gas due to economics).

A reduction in the rigs drilling for shale gas (due to economics), coupled with the high decline rate of existing shale gas wells.

Wells shut in (or throttled back) due to low commodity prices.

Reduction in electricity produced from our aging fleet of Nuclear power plants (due to increased down time). Natural Gas made up for some of the loss of electrical production from Nuclear.

Wells shut in while awaiting tie in to (un built) infrastructure.

 

The important thing is to understand why so much Natural Gas was withdrawn from storage during what was a warmer than average winter withdrawl season. Proceeding with the false belief that it was simply due to a cooler March would cloud our judgment as to what is really happening. We need to understand the true reasons for what we have seen in the withdrawls in order to appreciate what the future might hold.

 

I will gladly entertain your arguments if you can support or defend them with factual data.

do you understand now?

 

JS

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Permalink Reply by wyalusing jim on April 11, 2013 at 5:27am

 Reply by Jack Straw

"do you understand now?"

i think so...i think i understand where you messed up.

it seems that you are assuming that i said something which i obviously did not.

you said, " I believe that mentally contrasting last year’s very warm winter with this past winter has warped your perception."

i have not done that, have not implied that and it should not be assumed by you, that i had. i just lived through the winter, which was pretty mild overall, my memory of it, and the amount of firewood that i burned is still quite clear.

you said, " “if temperatures are below normal, it is very cold.”

The problem is that for the six month heating season, the cumulative temperatures were warmer than the 30 year average. The cumulative temperatures for the six month heating season were above normal, it was not very cold.

again, i said nothing about the winter heating season overall, but for some reason, you keep going back to that. are you just trying to invent a point of contention? i said what you quoted me as saying only because those were my original words, and i was trying to define my point of reference only as far as my original statement went. that relatively speaking, this past march was "very cold".

you said, "RE: “the facts bear me out on this one.”

I posted my facts (source) in an earlier post.

Where are your facts? You have stated your perceptions, but have presented no facts."

jack...your facts are my facts. if you had not posted them, i would have.

you have taken issue with my statement, "it was very cold nationwide during the drop to under the 5 year average. and actually, we are only 2% below the average."

the drop in storage to under the 5 year average occurred in march. it was also colder than normal, i.e., "very cold" in march. your statements and data show this to be correct. why then are you arguing with your own data? more interestingly, why are you bringing in the entire heating seasons' data when that has nothing to do with what i said, which was simply that there was a coincidence of events which are readily apparent?

as far as the rest of your post and particularly, "The important thing is to understand is why so much Natural Gas was withdrawn from storage during what was a warmer than average winter withdrawl season.", that is a different subject from what i posted.

we can speculate on what factors influenced the overall winter drawdown the most, it certainly wasnt cold weather, until march, although if you look closely at november, there was a bend toward the average also, but not enough to be significant.

if you want my opinion, i think that baseload electrical generation ng power burn, which increased due to the mmbtu price differential between ng and coal, was the most significant factor.

that seems to have kept the storage numbers from getting too high during the injection season, and then even with the milder winter, kept withdrawals up, setting up the march decline to under the 5 yr average.

but thats just my opinion. if i am correct in that opinion, we may now be in jeopardy, depending on how many plants converted over to ng permanently because the mmbtu price differential is now in favor of coal.

the next 2 reports are also going to be interesting because it was colder than normal in the first week of april too. after that, it'll be interesting to see how quickly reinjection occurs and if prices stay high as comapnies build their stocks for next winter.

so...ya got it now?

wj

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