Natural gas demand for power generation in the U.S. Rockies region is averaging its lowest daily levels since at least 2005

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


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.