Why you pay more for natural gas AND electricity: The utility mark-up of natural gas average prices over Henry Hub spot prices has never been higher than in 2024, 40% of electricity is generated by natural gas in the US, the largest source

 

A record 672% in the first half of 2024

675% in the first quarter of 2024, a new record

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

669% in the second quarter of 2024: "Energy prices are coming down" lol

The rarely uttered but all-important truth: Energy prices lie at the root of all price pressures

Energy-heavy transportation and warehousing operations saw prices fall in the early and final purchasing stages of their business, PPI data showed. That indicates that supply-side pressures are easing, Kurt Rankin, senior economist with PNC Financial Services, wrote Thursday.

“The downward-trending energy PPI pace, which lies at the root of all price pressures in the US economy, implies that the second half of 2024 will see diminishing cost pressures from producers’ own energy bills, as well as the cost of shipping goods to retailers,” Rankin wrote. 

The final two paragraphs, here.

Don't be fooled. High energy prices remain the main drag on the economy.

A presidential administration biased against fossil fuels, which still accounted for 81% of primary energy production in the US in 2022, is shooting itself in the foot when trying to fight inflation and explains the persistence of the problem which most elites predicted would only be transitory.

Gasoline prices remain Obama-like, not Trump-like in the first half of 2024

Natural gas prices remain highly elevated in the first half of 2024 and ticked up again

Electricity in the US has never cost more than under the recent, lunatic Biden administration

 

 

Obama's war on coal has resulted in the elimination of electrical generation capacity equivalent to the entire nuclear power sector, and these idiots wonder how America ended up running out of electricity

Starting from 2012 and going through 2022, ~ 106 GW of coal-fired capacity was eliminated in the US.

Of the ~ 200 GW remaining, ~ 23% is scheduled to be eliminated through 2029.

Meanwhile China just builds and builds and builds new coal-fired capacity. It now has at least 1,109 GW of coal-fired capacity, five times more than the US.

Trump promised to build the wall, Biden promised to end fossil fuel lolz

 

Chris Christie credits Fed interest rate policy for denting government-spending-induced inflation but misses the role of collapsing energy prices

 Chris Christie is a smart guy with many of the right ideas about government spending, taxes, inflation, energy, and the environment.

But it's a real stretch to think that the timid interest rate increases of the Fed are responsible for this year's so-far moderating inflation indicators when it's falling energy prices since the winter which deserve the real credit. Christie himself admits that outrageous government spending hasn't been curbed at all.

His is a simple binary view which, while conventional and correct as far as it goes, doesn't get to the heart of the current matter. 

Low energy prices have always been and remain key to a successful economy, and it was the spike in natural gas cost inputs because of the Russia-Ukraine war which accelerated inflation globally, not just in the US.

Fed chair Jerome Powell was correct in June of 2021 to believe that inflation would be transitory for "weak supply" reasons, but the Fed rate increases didn't actually commence until the start of the war in Ukraine, which compounded those reasons with the cutoff of European natural gas supplies.

But since the winter the natural gas price is down 73% from peak, coal is down 70%, and gasoline is down too, but a comparatively modest 24%. 

Americans consumed in 2022 the energy equivalent of 26.9 billion kWh/day of natural gas, 13 billion kWh/day of gasoline, and 7.9 billion kWh/day of coal.

Natural gas is twice as important as gasoline in the overall American energy picture, primarily for heating, and as a substitute for coal in electricity generation.

Natural gas produced 4.6 billion kWh/day of electricity in 2022, the top source of electricity, vs. coal at 2.3 billion kWh/day and nuclear at 2.1 billion kWh/day.

Chris Christie is right though. We must "uncap" US oil and gas production and be energy independent.

Europe's natural gas storage, by the way, is presently 93% full as the war in Ukraine drags on. They are ready.

The US used 88.5 billion cubic feet of natural gas per day in 2022. We presently have about 35 days in storage.

Crude oil consumption in 2022 was about 20.3 million barrels per day. The Strategic Petroleum Reserve is down to about 17 days of supply, from about 35 in 2011.

 

Watch CNBC’s full interview with GOP Presidential Candidate Chris Christie

Christie lets Fed off the hook for inflation, blames Trump and Biden for overspending

 

 

Headline pce inflation of 3% year over year is driven lower by the collapse in energy prices, mostly natural gas not gasoline

Natural gas is twice as important as gasoline for America's energy needs.

eia.gov says the United States used 369 million gallons of gasoline per day in 2022. That's the equivalent of 13 billion kWhr/day last year.

America also consumed 88.52 billion cubic feet of natural gas per day in 2022. That's the equivalent of 26.88 billion kWhr/day last year, 2.06 times as much.

Gasoline is down 14.6% in 1H2023, natural gas 60.5%.

 

The State of New York is run by green energy extremists who hate your use of natural gas, same as in California and Washington

First they came for your toilets, dishwashers, and clothes washers, and you said nothing.

Then they came for your coal, and you said nothing.

Then they came for your lightbulbs, and you said nothing.

 

Germany boosts electricity from coal to 10 gigawatts, a drop in the bucket

 Bloomberg, here:

Germany now generates more than a third of its electricity from coal-fired power plants, according to Destatis, the federal statistical office. In the third quarter, its electricity from the fuel was 13.3% higher than the same period a year earlier, the agency said.  

Germany as recently as 2019 still had 40 gigawatts of electricity capacity from coal, and planned to reduce that to 27 by 2022, so obviously Germany has much more capacity available than 10 gigawatts during its present natural gas supply crisis caused by the Ukraine war.

But Germany's more serious mistake than reducing its coal capacity was its voluntary and hysterical reduction of nuclear generation capacity by 40% in the wake of the Fukushima disaster in 2011. Now it's got just 3 reactors left out of the 17 it had back in the day. 

Meanwhile US electric capacity from coal in 2021 dwarfed the German, at about 210 gigawatts, but that is way down from almost 318 in 2011, a similarly ideologically driven, self-imposed, and illogical reduction of 108 gigawatts, or 33% in ten years.

The foolish growing reliance on unreliable "green energy" in the US and the turn away from coal which began in earnest under Obama has meant increasing unreliability of electric resources during extreme events, and a huge increase in the duration of power outages experienced by customers.

The average customer outage was just north of 8 hours in 2020 vs. about 3.5 hours in 2013, an increase of over 130%.

This will only get worse if America tries to rely on wind and solar at the expense of fossil fuels and nuclear.

 

 

LOL Reuters, 11 years ago: "Texas has the most wind power in the country, but the wind does not blow during the summer"

Texas has the most wind power in the country, but the wind does not blow during the summer. Ercot said it got about 2,000 MW from wind during the peak hour on Wednesday. Those wind farms can produce about 9,000 MW when all turbines are spinning.

Reuters, here.

Wind generating capacity in Texas today is in the neighborhood of 35,000 megawatts, but only about 7,770 megawatts of that would be available under similar summer circumstances, with much less coal generating capacity available today than in 2011 to fill the breach:

Because of the increase in wind power and the retirement of almost 6,000 megawatts of coal-fired generating capacity, coal-fired power plants supplied 18% of state generation in 2021, down from a 36% share in 2011.  

And as a result Texas now gets to listen to this:

Texas grid operator tells residents to curb power as heat hits record highs

Environmentalists sneered at Trump's promotion of natural gas, and Europe didn't want his Freedom Gas in 2019, now they're cutting deals for US LNG which Trump made the US the world's third top exporter of by 2019

EU strikes gas deal with the U.S. as it seeks to cut its reliance on Russia :

The White House said the EU said would work toward the goal of ensuring, until at least 2030, demand for approximately 50 billion cubic meters per year of extra U.S. LNG. This is “consistent with our shared net-zero goals,” it added.

 

U.S. liquefied natural gas export capacity will be world’s largest by end of 2022:

U.S. liquefied natural gas (LNG) export capacity has grown rapidly since the Lower 48 states first began exporting LNG in February 2016. In 2019, the United States became the world’s third-largest LNG exporter, behind Australia and Qatar. Once the new LNG liquefaction units, called trains, at Sabine Pass and Calcasieu Pass in Louisiana are placed in service by the end of 2022, the United States will have the world’s largest LNG export capacity. 

The environmentalist wacko Democrat Governor of Washington State Jay Inslee sneered at the idea of freedom gas:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Europe rebuffed Trump's LNG in 2019, preferring the cheaper Russian gas:

 

 

 

You fools who won't have enough electricity for air conditioning this summer have only yourselves to blame

From the story:

Peak temperatures are forecast to reach 115 degrees Fahrenheit (46°C) in interior California through the week, according to the state's electric grid operator, which warned the biggest supply deficit could occur on Thursday after the sun goes down and solar power is no longer available. ...

On Wednesday, solar power was providing about 30% of California ISO's supply, and the grid warned that it would be unlikely to be able to rely on additional supplies from other states due to the extreme heat hitting much of the Western United States.

The ISO was currently getting 13% of its power from other states. The ISO has said it expects to have about 50,734 MW of supply available this summer, but some of that comes from solar.

102,000 MW of coal-fired electric capacity was retired from 2010-2019, over 38,000 MW alone in 2012, 2015 and 2018. Another 17,000 MW is scheduled to be retired by 2025. 

The EIA blamed "flat electricity demand growth" during the decade for the retirements.

It should have blamed Obama, under whom real GDP grew at a rate worse than during the Great Depression.

But YOU elected him.

Twice.

 

 

The utility companies in Minnesota wouldn't have to say this if natural gas were reserved for residential heating and coal for electricity

Extreme Cold Straining Xcel Energy’s Natural Gas System, Residents Urged To Turn Down Thermostat:

“We need those in Becker, Big Lake, Chisago City, Lindstrom, Princeton, and Isanti to reduce use of natural gas. Until further notice, you are urged to turn down your thermostat to 60 degrees or lower and avoid the use of other natural gas appliances including hot water,” Xcel Energy said. WCCO’s Reg Chapman said shortly before noon Wednesday that Xcel Energy is asking customers to lower thermostat to 55 degrees. Xcel Energy says residents’ cooperation is critical to prevent widespread natural gas outages. The company also suggests using electric space heaters.

About 39% of utility-scale electricity generation in Minnesota came from coal-fired electric power plants in 2017, down from 49% in 2014.

Increasing amounts of natural gas are fueling electricity generation in the state. In 2016, about one-seventh of the natural gas consumed in Minnesota went to the electric power sector, more than double the amount of natural gas used for electricity generation in 2011.

Maybe gasoline wouldn't cost as much if we didn't export 8% of our consumption

In 2017 our consumption of gasoline came to 3.40 billion barrels, but that year we exported 0.273 billion barrels, or 8% of that consumption, a new record. Consumption actually fell in 2017 from 2016 when consumption hit 3.41 billion barrels.

The news today says prices are climbing because of increased demand and tighter supplies. But as prices have risen in the last year, miles-traveled are down sharply year over year in January. Growth of miles-traveled had barely caught up with pre-recession levels in 2016 and 2017 and is now on the verge of recession-like conditions to start 2018.

We'll see if any of this continues, but one thing's for sure. Paying $3.00+/gallon this summer isn't what we voted for when we voted for Donald Trump.

Another Obama achievement: deliberately bankrupting coal companies, destroying jobs and making electricity more expensive

From the story here at Bloomberg yesterday detailing the coal bankruptcies:

Obama has backed tougher limits on carbon dioxide blamed for climate change.

New mercury standards that took effect last year led utilities to retire 23 gigawatts of coal-fired electricity, according to Bloomberg New Energy Finance.

On Friday, his administration said it will stop leasing public land to coal developers and will weigh raising royalty fees for exploration while it studies the fuel’s environmental impacts.

Both production and demand for coal this year will fall to the lowest level since 1983, the U.S. Energy Information Administration said this week. ...

Arch [Coal Inc.] has followed Alpha Natural Resources Inc., Patriot Coal Corp., Walter Energy Inc. and James River Coal Co., in bankruptcy.

In other news, mining (129,000) and logging jobs (2,000) declined 131,000 in 2015, the biggest decline since 1986 and the third worst year of declines since 1939.

Since 2007 net generation of electricity from coal has declined by almost 30% through October 2015.

While retail sales of electricity in 2014 are almost exactly identical to such sales in 2007, measured in kilowatthours purchased, the cost of that electricity has gone up over 18% over the same period as coal's role is being deliberately curtailed.

US could join this list of the world's top oil exporters thanks to relaxation of 1974 oil export ban yesterday

Export of up to 1 million barrels per day could put the US in 16th or 17th on this list from the US Energy Information Administration by the end of 2015.

Falling oil imports/record rising refined petroleum exports account for today's startling trade contribution to GDP

The Oil and Gas Journal reports here that September petroleum imports plunged to the 1995 level while September was a record month for exports of refined products:

Total petroleum imports for September registered a 16.3% drop from the prior year, averaging just below 8.4 million b/d, which was the lowest level since February 1995. Crude oil imports averaged 7.4 million b/d, down 6.7% over the same period, to the lowest September level in 18 years. Imports of refined petroleum products dropped 52.5% to average 1 million b/d, the lowest level for US Energy Information Administration records dating to 1981. Meanwhile, exports of refined products increased 18.4% from last year to nearly 4.3 million b/d, the highest September level on record and the third-highest exports level ever recorded.

-------------------------------------------------

Imports are a subtraction from GDP, so the big drop in imports coupled with a big surge in refined petroleum exports in September no doubt contributed significantly to the net plus to GDP in the trade column of today's report.

The American Petroleum Institute reports separately here that imports of petroleum in 3Q2014 were 11.4% lower than in the same period in 2013.

Depression In Oil Consumption Continued In 2012 At 18.56 million Barrels Per Day

US Petroleum Consumption '80-'11, eia.gov

Reuters had the story here on Feb. 27:

Oil demand for the year was at 18.56 million bpd, down 2.08 percent compared with 2011, with petroleum use falling in every month in 2012 except May.

Consumption in 2011 was 18.95 million bpd according to the Energy Information Administration, here.

Peak consumption was in 2005 at 20.8 million bpd, so 2012 is still 10.8% off the high reached eight years ago.

Consumption in 2012 is almost equivalent to consumption in 1997 when it stood at 18.6 million bpd.

The decline in 2008 to 17.06 million bpd represented a decline in petroleum consumption of a whopping 18%.

High Gasoline Prices Are In The News Again: Up 55 Percent Since 2007

For example, from The Associated Press:

The national average for gasoline began the year at $3.28 a gallon. The average price for February so far is $3.49 a gallon. That's up from $3.17 a gallon last February, a record at the time. Back in 2007, before the recession hit, the average for February was $2.25 a gallon. ...

Americans spent 8.4 percent of their household income on gasoline last year when gas averaged an all-time high of $3.51 a gallon. That's double the percentage a decade ago. They could pay even more this year, even though demand is the lowest in 11 years as people drive fewer miles in more efficient cars, says Tom Kloza, chief oil analyst at OPIS. ...

World oil demand is expected to increase by another 1.5 percent to 89.25 million barrels a day in 2012, according to the Energy Information Administration.

Read the complete story here.

US Domestic Oil Production Increased in 2009 and 2010

The data are clearly shown at the link here to the US Energy Information Administration website, and show that after five consecutive years of domestic production declines, 2009 production exceeded 2008 production, and 2010 production exceeded 2009 production.

This was true despite declining production from Alaska. There were remarkable back to back years of production increases both in the Gulf of Mexico and in the lower 48 states, especially in North Dakota.

Conservatives who wish to dispute this are idiots. Rush Limbaugh and Hugh Hewitt are brushing up awfully close to this.

Obama's attempt to take credit for it is completely disingenuous. He would stop the use of oil tomorrow if he could. Pure snake oil.

US Oil Production Up 2 Years in a Row, Despite Gulf of Mexico Moratorium

New techniques used to extract natural gas from shale deposits are now helping drillers extract oil once thought locked in the ground:

[A] surge in production last year from the Bakken helped US oil production grow for the second year in a row, after 23 years of decline. This during a year when drilling in the Gulf of Mexico, the nation's biggest oil-producing region, was halted after the BP oil spill.

US oil production climbed steadily through most of the last century and reached a peak of 9.6 million barrels per day in 1970. The decline since was slowed by new production in Alaska in the 1980s and in the Gulf of Mexico more recently. But by 2008, production had fallen to 5 million barrels per day.

Within five years, analysts and executives predict, the newly unlocked fields are expected to produce 1 million to 2 million barrels of oil per day, enough to boost US production 20 percent to 40 percent. The US Energy Information Administration estimates production will grow a more modest 500,000 barrels per day.

By 2020, oil imports could be slashed by as much as 60 percent, according to Credit Suisse's Morse, who is counting on Gulf oil production to rise and on US gasoline demand to fall.

Add oil to the reasons to be bullish on the future.

The complete story is here.