Monday, July 30, 2012
BENTEK’s Rockies Observer reports that despite record-breaking summer temperatures, the Rockies is the only U.S. region where natural gas demand-per-degree is declining. The report states that since April 1, daily Rockies gas demand for power generation has averaged 314 MMcf/d, or almost 20% below the three-year average. Natural gas as a percentage of the Rockies’ power portfolio is also declining and currently accounts for only 9% of total power generated, with wind power overtaking natural gas in portfolio share. In contrast, record-high levels of gas demand for power generation were set across much of the U.S. last week. Total U.S. gas demand for power generation hit a record 37.6 Bcf/d on July 26.
Rockies gas prices need to be significantly lower than other regions in order to capture market share from coal. BENTEK’s Rockies Observer reports that, assuming price were a power generator’s only factor when considering whether to burn gas or coal, Rockies gas prices would need to fall to a sustained $2.20 to have the potential to displace as much as 0.5 Bcf/d. With this summer’s Rockies cash and forward prices well above this, price alone does not appear likely to support coal-to-gas switching.
Key features of BENTEK’s Rockies Observer:
• Rockies gas demand including 14-day power and res/comm projections as well as outbound flows to other regions
• Pipeline transportation rates and price spreads for key Rockies pipeline flow corridors
• Forward prices and basis for key Rockies and downstream markets including SoCal, Sumas, Malin and Chicago
• Infrastructure analysis: Expansions, new builds and maintenance
• Basin-specific production volumes including Piceance, Powder River and Uinta
• Active rig counts by basin broken out by well class and drilling orientation
ALSO AVAILABLE FROM BENTEK:
BENTEK’s U.S. Power Burn Report provides a daily resource for U.S. gas demand in the power sector, including in-depth regional power burn analysis. This report provides year-on-year power burn demand comparisons as well as 14-day regional demand forecasts.
BENTEK’s full line of Observers provides regional coverage of natural gas supply and demand dynamics, price differentials and inflow/outflow analysis for the U.S. and Canada.
To learn more, please contact your BENTEK sales representative or call BENTEK Sales at 1-888-251-1264.