"We know we’ll run out of dead dinosaurs to mine for fuel and have to use sustainable energy eventually, so why not go renewable now and avoid increasing risk of climate catastrophe? Betting that science is wrong and oil companies are right is the dumbest experiment in history by far.”
Elon Musk
Businessman, industrialist, and co-chair of the proposed Department of Government Efficiency (DOGE) in the second Trump administration
Azi Feifel
COO PROSPECT RESOURCES
Trends in the Energy Market
NOVEMBER 2024
Current Market News
Prompt-month NYMEX opened at $3.356 / MMBtu, on Monday, November 25. Market is definitely showing bullish signs with upward pressure caused by a tighter supply-demand balance.
Natural gas production has been down modestly, averaging 100.5 Bcf per day, versus 104.8 Bcf per day for the same period last year.
Demand for electric-power generation is a primary driver for natural gas price variation. Electric power generation demand for gas remains strong, month-to-date, averaged 32.5 Bcf per day versus 31.4 Bcf per day for the same period last year.
There will be some big temperature swings across the U.S. this holiday week. Pre-holiday travel might feature some unsettled weather for the Great Lakes, mid-South and Ohio Valley. Another storm system will bring mountain snow and rain to the West. Thanksgiving Day looks messy for the eastern third of the country, with rain and snow dominating. Midwest will also falling temperatures.
As of the 11/13, EIA reported an injection of 42 Bcf into underground storage for the week ending 11/8/2024. Inventories are 3,974 Bcf, 158 Bcf or 4.1% more than the same period last year and 228 Bcf or 6.1% more than the 5-year average.
And yet more...
WTI futures are down, prompt-month crude trading under $70 per barrel. Downward pressure is anticipated to persist at least for the near term.
After a year of war in the Middle East, there has been little to suggest a crude oil supply-disruption to global markets.
The economy is in neutral. The U.S. economy grew 2.8% last quarter. Fed Chairman Powell says a solid economy allows the Fed to consider rate cuts "carefully." President-Elect Trump chose Chris Wright, CEO of Denver based Liberty Energy as Secretary of Energy. Wright will also serve on the newly formed Council of National Energy,
Unemployment is relatively unchanged, at 4.1%. Consumer confidence rebounded in October.
Power forward curves through 2028 have generally turned up. NYISO shows more of a downward trend and ISONE showed the most volatility. ERCOT renewables have gone a long way toward increasing grid reliability. On 11/7 at a Special Markets and Reliability Committee, PJM presented what it plans to include in a December filing at FERC to implement further changes to the PJM capacity market.
Charges and Credits Impacting Your Electricity Bill
The Carbon-Free Resource Adjustment (CFRA)
The Carbon-Free Resource Adjustment (CFRA) was created by a provision in the 2021 Climate and Equitable Jobs Act, or CEJA, landmark energy legislation in Illinois. The CFRA was meant to give a subsidy over five years to Illinois nuclear power plants to support lower-cost carbon-free energy when market prices were below a certain level.
Over its first year, the CFRA delivered a total of about $2.4 billion in credits to consumers. But now, with a lower market, the CFRA is resulting in highly inflated ComEd utility bills. Customers cannot budget for CFRA as the rate is only published monthly. It has become a quite onerous utility burden. Unfortunately this is built into the legislation and cannot be hedged away and smoothed.
Charges and Credits Impacting Your Natural Gas Bill
Low Income Discount Adjustments (LIDA)
The Low Income Discount Adjustments (LIDA) recovers the lost revenues for qualified low-income customers who have the specified rate services classifications for natural gas.
On December 15, 2022, the Commission approved the Low Income Discount Rates report conducted pursuant to Section 9-241 of the Illinois Public Utilities Act. This tariff complies with the report’s directive to submit a low income discount rate. The LIDA, expressed on a per customer basis, recovers the lost revenues due to Low Income Discount Credits. This Rider is applicable to all customers taking service from the Company under Service Classification (“S.C.”) Nos. 1, 2, 4, 5, 7, and 8.
Peoples Gas offers several service classifications for natural gas, including:
Rate 1 – Small Residential Service
Rate 2 - General Service: For commercial, industrial, and multi-family customers who use 41,000 therms or less per month
Rate 4 - Large Volume Demand Service: For large volume business customers who use more than 41,000 therms per month
Rate 8 - Compressed Natural Gas: For businesses that use natural gas in compressed form
Classification 5 - Contract Service Electric Generation: A service classification
Classification 7 - Contract Service to Prevent Bypass: A service classification
Ask us how much you can SAVE by joining the Demand Response energy curtailment program!
Demand Response (DR) is an energy curtailment program offered by U.S. grid operators.
This year DR programs will pay significantly higher amounts. Medium to large electricity users may qualify when they have the operational flexibility to reduce their usage during system peak demand and during an emergency.
Seasonal / Propane:U.S. propane inventories are well stocked heading into the winter heating season | 11.21 The United States is well stocked with propane heading into the winter heating season, which runs from November through March, with U.S. propane inventories at the top of the five-year range spanning the winter of 2019–20 to the winter of 2023–24.
Natural Gas Production: U.S. associated natural gas production increased nearly 8% in 2023 | 11.13 U.S. production of associated-dissolved natural gas, or associated natural gas, increased 7.9% in 2023 compared with 2022, averaging 17.1 billion cubic feet per day (Bcf/d) last year, according to data from Enverus Drillinginfo. Associated natural gas production, which is natural gas produced by wells that predominantly produce oil, comes mainly from five major oil-producing regions in the United States—the Permian, Bakken, Eagle Ford, Anadarko, and Niobrara.
Ethanol Exports: U.S. fuel ethanol exports rise on strong international demand and low U.S. prices | 11.6 U.S. fuel ethanol exporters are on track to export a record amount of the fuel in 2024. The increase in exports this year has largely been driven by demand in countries with biofuel blending mandates and cheaper-than-usual U.S. fuel ethanol prices.
Natural Gas Production:Share of natural gas production in U.S. tight oil plays increased over the last decade | 10.31 Natural gas produced from the three largest tight oil-producing plays in the United States has increased in the last decade. Natural gas comprised 40% of total production from the Bakken, the Eagle Ford, and the Permian compared with 29% in 2014.
