Energy In-depth: U.S. natural gas stockpiles reach record level

Editor’s note: Each Friday, Talk Business & Politics provides “Energy In-depth,” a round-up of energy and regulatory news.

U.S. NATURAL GAS STOCKPILES REACH RECORD LEVEL: U.S. working natural gas stockpiles reached 3,929 billion cubic feet (Bcf) as of October 30, matching the previous weekly record of 3,929 Bcf set November 2, 2012, according to EIA’s latest Weekly Natural Gas Storage Report. Although October marks the traditional end of the injection season, inventory increases commonly continue into the first weeks of November. Largely depending on the weather, inventories could surpass 4 trillion cubic feet in the coming weeks.

Inventory builds have been strong throughout the summer, with inventories surpassing the five-year (2010–14) average during most weeks. During 2015, marketed natural gas production levels remained several billion cubic feet per day (Bcf/d) above year-ago levels, and they hit a new monthly record in August 2015 at 81.3 Bcf/d. The electric power sector accounted for some of the growth in production, as low natural gas prices and high electricity demand in response to warmer temperatures led to increased consumption of natural gas for power generation.

Natural gas spot prices at the benchmark Henry Hub have remained below $3 per million British thermal unit (MMBtu) all year, and EIA’s Short-Term Energy Outlook projects these spot prices will remain below $3 per MMBtu through mid-2016.

NEW RESEARCH REPORT SAYS G20 GOVERNMENTS SUBSIDIZE $452 BILLION IN FOSSIL FUEL PRODUCTION GLOBALLY: A United Kingdom-based research group has released a controversial report this week that criticizes so-called G20 countries for spending $452 billion annually to “prop up” production of oil, gas and coal, much of which cannot be used if the world is to avoid dangerous climate change.

The report by the Overseas Development Institute (ODI), called “Empty promises: G20 subsidies to oil, gas and coal production,” documents the scale and structure of fossil fuel production subsidies in the economies of the 20 largest countries across the globe. Russia and the U.S. provided the most significant subsidies for fossil fuel production with an average of $23 billion and $20 billion, respectively. To view the full report, click here.

TEXAS BREAKS WIND RECORD FOR ELECTRIC GENERATION: Wind generation on the Texas electric system recently hit several all-time highs. The latest all-time instantaneous peak of 12,238 megawatts (MW) reached on October 22 replaced the short-lived records of 11,467 MW on September 13 and 11,950 MW on October 21, based on data from the grid’s operator, the Electric Reliability Council of Texas (ERCOT). Substantial additions of new wind generating capacity, coupled with strong wind conditions amid unseasonably warm early-autumn temperatures, drove the recent generation records.

In ERCOT, as well as in the United States overall, additions of wind capacity experienced a strong recovery starting in mid-2014 and continuing through 2015. Prior to that, wind additions came to a virtual stop in 2013 and through the first half of 2014 following the expiration, delayed renewal, and modification of the federal renewable energy production tax credit.

CENTERPOINT SEEKS $35.6 MILLION RATE CHANGE, WOULD RAISE AVERAGE MONTHLY GAS 12%: CenterPoint Energy has filed an application with the Arkansas Public Service Commission (APSC) to change the company’s natural gas distribution rates that will push up the average residential customer’s bill by $6.68 per month, company officials said Wednesday (Nov. 11).

The 12% rate adjustment filing comes less than two weeks after CenterPoint officials announced on Oct. 31 that CenterPoint’s customers in Arkansas and other state would see lower heating bills this winter due to natural gas prices that have fallen well below $2.40 per million British thermal units on the futures markets, which is near a three-year low.

GAS PRICES EXPECTED TO FALL THROUGH CHRISTMAS AS WINTER FUEL DEMAND DECLINES: Although gas prices have edged up in recent weeks across Arkansas and the rest of the U.S., the monthly average for a gallon of regular unleaded is expected to decline between Thanksgiving and Christmas as unplanned refinery outages this fall come back online, according to Tuesday’s (Nov. 10) short-term energy forecast by the U.S. Energy Information Administration.

With national pump prices at about $2.21 per gallon this week, the EIA expects monthly gasoline prices to decline to an average of $2.06 a gallon in December. In October, the monthly average price of U.S. regular retail gasoline was $2.29 a gallon, a decrease of 8 cents from September pump prices and 88 cents lower per gallon than a year ago.