Platts Energy Week
Heat-Stoked Texas Demand Hasn’t Outpaced Supply

Friday, August 19, 2011

Although record-setting Texas heat has ballooned natural gas demand over the past few weeks, growing production in the state has easily kept up with those needs, industry observers said.

During the first week of August alone, the Electric Reliability Council of Texas set new all-time peak power demand records three days in a row, with gas making up about half of the fuel mix to meet the generation needs.

With gas making up a bigger part of the power-generation mix, storage operators were churning out gas from underground caverns at a rate of 2 Bcf/d to meet demand, according to data from Bentek Energy, a unit of Platts.

As of the week ended August 5, the Energy Information Administration estimated underground storage in the production region, which includes Texas and seven other Southwest and Southeast states, to be at 961 Bcf, down just 1% from 2010.

And in Texas alone, storage inventories remain stout, owing to a bump from stronger injections early in the season and lighter demand in downstream markets in California, the Midcontinent and Gulf Coast, Bentek analyst Sheetal Nasta said.

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