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US natural gas futures bottomed on Oct. 24 after a 50% haircut on warmer weather. In the last two weeks, prices have staged a rally on the prospect of cold weather and tighter supplies. Last Monday, we penned a note titled “US NatGas Spikes As Temperatures Are About To Dive Nationwide.” Now, with colder weather sweeping across the US, NatGas prices are up a staggering 49% in eleven sessions.

On Monday morning alone, NatGas futures are up 10%. Bloomberg said the move higher is weather-related, “as a winter storm hits the Pacific Northwest and frigid weather is expected across most of the country.”

National Oceanic and Atmospheric Administration released a 6-10 day temperature outlook for the lower 48 states showing that most of the country will experience below-average temperatures.

An 8-14 day temperature outlook by the weather agency also points to continued below-average temperatures for much of the US.

After an unseasonably warm end of October and the first week of November, the warm spell is forecasted to turn today. Average temperatures are expected around 58 degrees Fahrenheit and will revert to a downward sloping 30-year mean of the mid-40s by mid-month.

Colder weather indicates heating demand will rise, and so will the demand for NatGas.

The latest rally in NatGas outlines how sensitive traders are to potential cold snaps, as below-normal stockpiles and surging exports could strain domestic stockpiles in a deep freeze in the months ahead.

Natural gas shortage could lead to power outages during coldest months

November 1, 2022

Joe Nolan, the CEO of Eversource, said a shortage of natural gas poses a serious health and safety threat.

Nolan sent a letter to President Joe Biden in which he said something needed to be done to avoid a shortage this winter.

In the letter, Nolan said rolling blackouts could be a solution that many customers might see.

While New England energy companies warned about rolling blackouts in the past, Nolan claimed this season might be different.

“I am just concerned that if we get a polar vortex or cold snap in the region, that will not be enough fuel for the electric generating units in the area to supply electricity for our customers,” he said.

He said Eversource has roughly 20 days’ worth of supply in tanks for emergencies. However, the war in Ukraine has impacted the company’s ability to get the extra supply of natural gas it would need in a weather crisis.

Nolan said he has been working to remedy the situation. He offered four proposals to Biden, including a waiver from the Jones Act.

“There is an awful lot of liquified natural gas that’s down in the gulf that we could access if we get relief from the Jones Act, which would allow a foreign flag vessel to go to the gulf and fill up and come to the northeast and deliver liquified natural gas, which right now we are not allowed to do,” Nolan said.

…click on the above link to read the rest…

NT’s Blacktip gas field production drops, forcing shutdown of Northern Gas Pipeline

October 22, 2022

NT’s Blacktip gas field production drops, forcing shutdown of Northern Gas Pipeline

The Channel Island power station is the main provider of electricity to the Darwin-Katherine interconnected system.(Supplied: Territory Generation)

Production from the offshore field which supplies gas for the Top End’s electricity generation has decreased by nearly 50 per cent this year — raising concerns about the long-term security of the resource.

Power and Water Corporation (PWC) has an agreement with Italian company ENI to buy gas from its Blacktip field until 2031, using the gas to generate electricity for the Darwin to Katherine grid.

But over the past 12 months, gas output from the field has been steadily dropping.

Blacktip’s production has decreased so much that there is not enough gas to run the Tennant Creek to Mount Isa pipeline, where PWC normally sends its excess supply.

Wood Mackenzie energy research analyst Anne Forbes said it was common for gas fields to have production issues, but Blacktip’s problems seemed particularly bad.

“There’s been quite a significant [production] decline, much more severe than we would generally assume would happen for this type of gas field,” she said.

“It’s been quite unexpected.”

Aging electricity infrastructure in the Northern Territory — Most of the Northern Territory’s electricity is provided by gas-fired power stations.(ABC News)

The Blacktip field is made up of 12 separate stacked reservoirs across four different geological formations — meaning it is difficult to extract gas from.

“[A gas reservoir] will always not perform as you expect — it might be better or it might be worse,” Ms Forbes said.

“In this case it’s not been as good as [ENI] had hoped.”

…click on the above link to read the rest…

Europe’s Energy Crisis May Not End Until 2024

October 22, 2022

Europe’s Energy Crisis May Not End Until 2024

The EU gas storage units are nearly full giving some relief to fears of shortages
Challenges remain for the continent’s energy security as winter arrives
The challenges will persist into the winter of 2023-24.

The worst energy security fears of spring and summer as regards the coming winter in the European Union-EU, have been somewhat allayed. Earlier this year when war broke out in Ukraine and it became clear that the conflict would drag on for months, if not years, the EU appeared perilously in danger of a winter “Polar-Geddon,” as cold air gripped the continent. Largely forgotten and retired gas storage caverns, that hadn’t been filled in the expectation of a steady supply from Russia via the Nordstream I and II pipelines, suddenly were thrust front and center into the public eye. Troubles often come in twos. The next shoe to drop was the deflation of expectations of much of the EU electric grid base load being met by wind and solar farms, when the elements refused to cooperate. Beginning in the middle of last year, it was noted that the wind wasn’t blowing and the output of solar farms was less than predicted. These two events appeared ready to converge upon the EU and presenting it with a stark, and chilly future for the winter of 2022-23.

As is often the case, the fullness of time alleviated the worst fears as energy leaders in the countries that make up the EU, sprang into action. They turned to Norway for an additional 90 bn cubic meters of gas to begin filling the storage caverns. The infrastructure was in place, it was just a matter of price…

…click on the above link to read the rest…

Can Europe Avoid A Worst-Case Energy Scenario This Winter?

October 20, 2022

Can Europe Avoid A Worst-Case Energy Scenario This Winter?

European countries have done most things they feasibly could to fill gas storage units.
Overall in the EU, gas storage was 92.37% full as of October 17.
Weather will be the determining factor in how fast gas in storage would be depleted, so Europe hopes for the best and prays for a milder winter.

Europe’s gas prices fell at the start of this week to the lowest level in three months as storage is fuller than initially expected, LNG cargoes are coming in, and the weather is mild. But European governments have been preparing for the worst-case scenario in which a colder-than-usual winter could quickly sap gas in storage, send gas prices soaring again, intensify competition for costly LNG with Asia, break consumers’ resolve to conserve energy in freezing temperatures, and force more businesses and industrial processes to halt operations.

Europe has done all it can to ensure the heating and lights will be on this winter, analysts say. Yet this may not be enough—a long cold, windless spell this winter would threaten to unravel all the efforts and lead to mandatory energy-saving targets, rationing, or rolling outages.

The Good News

All that can be feasibly done to ensure alternative gas supply after the Russian invasion of Ukraine and the Russian halt of gas flows to nearly all EU member states has been done. Floating storage regasification units (FSRUs) are being set up in Germany, the Netherlands, and Finland. Eemshaven in the Netherlands and Wilhelmshaven and Brunsbüttel in Germany are expected to begin operations as early as the end of this year. Europe is paying a lot for LNG supply, outbidding Asia, which was the top buyer of spot cargoes before the war.

…click on the above link to read the rest…

Look Before you Eat

October 19, 2022

Look Before you Eat

Preface. This post is a book review of Be Wilson’s Swindled. From Poison Sweets to Counterfeit Coffee – The Dark History of the Food Cheats.

With likely world peak oil production in 2018, the price of food will rise relentlessly, since fossil fuels are used to fertilize, plant, harvest, distribute, package, cook, and refrigerate food, and oil is the master resource that makes food and all other goods possible through transportation.

So how to cope with future food shortages and improve your health? Whole grains, corn, lentils and dried beans not only last 10 to 25 years if stored properly, they’re cheap and healthy. Consider milling your own grains, and though this is a bit out of date, here’s a piece I wrote up for my book “Crunch” on how to do this: Which Grain Mill is best?

Energy decline will make all goods more and more expensive and scarce, so maintaining your health is a key strategy to weather the long emergency ahead. There is no plan to cope with the energy crisis yet, for many reasons.

Wilson makes it clear clear that cheating has always gone on and always will, especially in societies with laissez-faire governments who prefer promoting commerce to protecting their citizens. In the United States and Britain, there is very little testing of chemicals added to food and most chemical additives don’t need to be listed on labels.

Food in many nations is sold on a “buyer beware” basis. I personally can’t afford to test rats over decades with elaborate chemistry sets at home, so I try to cook from scratch with whole grains, vegetables, fruit, etc. And buy organic produce that are the most pesticide laden like peaches, strawberries, apples, and so on, see: Dirty Dozen – Shopper’s Guide to Pesticides in Produce – EWG

…click on the above link to read the rest…

The Era Of Cheap Food And Cheap Gasoline Is Over

October 13, 2022

The Era Of Cheap Food And Cheap Gasoline Is Over

All of our lifestyles are about to change in a major way, but the vast majority of the population still does not understand what is coming. Throughout our entire lives, we have always been able to depend on a couple of things. There would always be cheap gasoline to fuel our vehicles and there would always be mountains of cheap food at the grocery store. No matter who was in the White House and no matter what else was going on in the world, those two things always remained the same. Unfortunately, those days are now over and they aren’t coming back.

We have entered the greatest energy crisis that any of us have ever experienced, and it isn’t going to go away any time soon.

So you might as well get used to high gas prices. Earlier this month, brand new all-time record highs were set all over southern California…

Los Angeles-Long Beach – $6.46 (Record high)
Orange County – $6.42 (Record high Saturday)
Ventura County – $6.40
Riverside County – $6.33 (Record high)
San Bernardino County $6.32

But that isn’t the real problem.

The real problem is with natural gas.

Thanks to the war in Ukraine, supplies of natural gas in Europe have become extremely tight, and this has pushed prices into the stratosphere.

Needless to say, this is going to greatly affect food productions in the months ahead. According to Bloomberg, over two-thirds of all fertilizer production capacity in Europe has already been shut down due to soaring natural gas costs…

Europe’s fertilizer crunch is deepening with more than two-thirds of production capacity halted by soaring gas costs, threatening farmers and consumers far beyond the region’s borders.

This is an absolutely massive story, but hardly anyone in the United States is covering it.

…click on the above link to read the rest of the article…

Dutch dilemma: What is Europe willing to do for more natural gas?

October 10, 2022

Dutch dilemma: What is Europe willing to do for more natural gas?

Modern global society is steeped in the idea of trade-offs, the notion that one must suffer losses to obtain desired gains. This prepares the way for disingenuous leaders to explain why sacrifices are necessary to reach supposedly exalted goals. Usually those sacrifices are made by the powerless in society; they are certainly not made by the leaders who call for sacrifices nor by the wealthy and powerful who benefit from them.*

This coming fateful winter season in Europe is likely to include a lively debate about whether the Dutch should make a perilous trade-off on behalf of an energy-starved Europe. So far, the Dutch have been firm about closing one of the world’s largest natural gas fields, Groningen, no later than 2024—even in the face of severe European gas shortages resulting from the loss of gas from Russian pipelines.

The reason for that firmness has to do with the damage earthquakes are inflicting on the buildings located above and around the field, earthquakes related directly to withdrawal of Groningen’s gas. In the northeastern part of the country, some 1200 earthquakes have severely damaged 27,000 buildings to the point that they are uninhabitable. About 3,300 structures have been demolished. A 2015 study reported that 152,000 homes need to be reinforced. As a result the government has been reducing gas withdrawals to mitigate the problem with an eye toward closing the field. Closing the field also comports with the government’s greenhouse gas reduction goals.

But, will the Dutch be able to withstand calls for increasing production from Groningen as the European winter arrives?

…click on the above link to read the rest of the article…

Escobar: Nord Stream 2 Offers Germany A Date With Destiny

October 9, 2022

Escobar: Nord Stream 2 Offers Germany A Date With Destiny

The twists and turns of the Nord Stream 2 (NS2) saga have yielded yet another stunning game-changer…

It started with Gazprom revealing that the Line B string of NS2 is intact; not only it escaped Pipeline Terror but may “potentially” be used to pump gas to Germany.

That confirms once again that NS2 is an engineering marvel. In fact the whole system: the pipes are so strong they were not broken, but merely punctured.

Russian Deputy Prime Minister Aleksandr Novak followed up, with a caveat: restoration of the whole system, including NS, is possible, and “requires time and appropriate funds”. But first, in Russia’s order of priorities, the perpetrators must be conclusively identified.

Sources in Moscow confirmed Gazprom’s assessment of NS2. Even Bloomberg had to report it.

Subsequently in Vienna, attending the Opec+ meeting, Novak remarked the Russian Federation is “ready to supply gas through the second line of Nord Stream 2. This is possible if necessary”.

So we know it’s possible. “Necessary” will depend on a political decision by Germany.

Novak also sharply noted that neither Russia nor the Nord Stream operators are allowed to investigate Pipeline Terror. Russia insists that without its participation the investigation is flawed.

Whatever the modus operandi of Pipeline Terror, incompetence was part of the package. No explosive charges were placed or detonated on Line B of NS2.

That means, as Novak said, it’s virtually ready for business. Line B is capable of pumping 27.5 billion cubic meters of gas a year, which happens to be half of the total capacity of NS.

…click on the above link to read the rest of the article…

Russian Gas Stops Flowing To Italy After ‘Problem’ In Austria

October 1, 2022

Russian Gas Stops Flowing To Italy After ‘Problem’ In Austria

Russian energy giant Gazprom PJSC suspended natural gas deliveries to Eni SpA, Italy’s largest oil company, on Saturday, reported Bloomberg.

“Gazprom informed that it is not able to confirm the gas volumes requested for today, stating that it’s not possible to supply gas through Austria. Therefore, today’s Russian gas supplies to Eni through the Tarvisio entry point will be at zero. Eni will provide updates in case supplies will be restored,” Eni wrote in a statement on its website.

An Eni spokesperson told Bloomberg that Austria is still receiving NatGas from Gazprom:

“We are working to check with Gazprom whether it is possible to reactivate the flows to Italy.”

Gazprom said NatGas flows from Austria to Italy were suspended because the Austrian operator refused to confirm “transport nominations” after recent regulatory changes in the landlocked country in the southern part of Central Europe.

It’s important to note most of the Russian NatGas delivered to Italy flows through Ukraine via the Trans Austria Gas Pipeline to Tarvisio in northern Italy on the border with Austria. Before Russia invaded Ukraine, Italy imported 95% of its NatGas, of which 45% came from Russia.

Those figures are drastically different today as Italy rejiggers its energy supply chain away from Russia and finds alternative supplies of NatGas from North Africa. Before this weekend, Russian NatGas accounted for only 10% of Italy’s imports. The new suppliers will help Italy boost storage levels ahead of winter.

“Outgoing Prime Minister Mario Draghi has been scouring the globe to secure gas supplies to protect Italy from potential supply interruptions from Russia, which has been putting pressure on the European Union over several rounds of sanctions in response to the invasion. Italy has been one of the most successful countries to source alternative supplies,” Bloomberg noted.

…click on the above link to read the rest of the article…

Apparent Sabotage Disables Nord Stream 1 and 2, Cutting Off All Direct Gas Supply to Germany from Russia

September 28, 2022

Apparent Sabotage Disables Nord Stream 1 and 2, Cutting Off All Direct Gas Supply to Germany from Russia

Anonymous German officials appear to acknowledge the strong possibility of American or NATO involvement

Yesterday evening, pressure in the undersea Nord Stream 2 pipeline suddenly collapsed, and gas could be seen bubbling to the surface of the Baltic Sea near the Danish island of Bornholm. Shortly afterwards, reports came of a total collapse in the pressure of our other major undersea pipeline connection to Russia, Nord Stream 1, indicating a further rupture.

Government officials assume that the damage is intentional, and the result of an attack by foreign forces:

Due to the timing, the fact that three separate pipelines were affected1, and the severe pressure losses in Nord Stream 1, officials expect the worst. “We can no longer imagine any scenario other than a targeted attack,” said a person privy to the assessment by the federal government and federal authorities. They added: “Everything speaks against a coincidence.”

Such an attack on the seabed would be anything but trivial; it would have to be carried out with special forces – for example, by navy divers or a submarine, people informed of initial assessments said.

With regard to responsibility for the alleged attacks, two possibilities are being discussed. First, according to initial speculation, Ukrainian or Ukrainian-affiliated forces could be responsible. With the temporary shutdown of the Nord Stream pipelines, gas deliveries from Russia to Germany and Central Europe would only be possible via the Yamal pipelinje running through Poland or the Ukrainian pipeline network.

…click on the above link to read the rest of the article…

In Dramatic Escalation, European Nat Gas Prices Soar After Gazprom Warns Ukraine Flows At Risk

September 27, 2022

In Dramatic Escalation, European Nat Gas Prices Soar After Gazprom Warns Ukraine Flows At Risk

In a day of constant news surrounding European gas flows, including the potential sabotage of the Nord Stream pipeline, moments ago, Russia state-owned gas giant Gazprom PJSC warned that another major source of gas flows to Europe was at risk, just hours after three massive gas pipelines were hit by suspected sabotage.

As Bloomberg reports, in a dramatic escalation of the energy standoff between Russia and Europe in little over 24 hours, the Nord Stream pipeline was knocked out by what German officials said looked like sabotage. Gazprom then said that one of two remaining routes bringing gas to Europe – via Ukraine – was at risk because of a legal spat.

Specifically, as Reuters notes, Gazprom rejected all claims from Ukraine’s energy firm Naftogaz in arbitration proceedings over Russian gas transit, and had notified the arbitration court. It also said that Russia may introduce sanctions against Naftogaz in case it further pursues the arbitration case, meaning Gazprom would be prohibited by the sanctions from paying Ukraine the transit fees.

Naftogaz had initiated a new arbitration proceeding against Gazprom earlier this month, saying the Russian company did not pay for the rendered service of gas transportation through Ukraine. The company had said “funds were not paid by Gazprom, neither on time nor in full” for the gas transit.

Gazprom said on Tuesday that Naftogaz had no “appropriate reasons” to reject its obligations on transit via the Sokhranovka point, a key route for Russian gas exports to Europe.

In May, Ukraine suspended the flow of gas through Sokhranovka, which it said delivers almost a third of the fuel piped from Russia to Europe through Ukraine, blaming Moscow for the move and saying it would move the flows elsewhere.

…click on the above link to read the rest of the article…

Germany nationalizes its biggest natural gas importer

September 23, 2022

Germany nationalizes its biggest natural gas importer

Germany is nationalizing Uniper, its biggest importer of natural gas, as part of an €8 billion ($7.9 billion) plan to prevent an energy shortage this winter.

Europe has been hit by soaring natural gas and electricity prices as a result of Russia’s invasion of Ukraine and its throttling of gas supplies.

The German government will hold around 99% of Uniper after injecting new capital and buying out its Finnish parent company Fortum (FOJCF), German Economy Minister Robert Habeck told journalists in Berlin on Wednesday.

Uniper provides 40% of the country’s gas supply and is crucial for large companies and private consumers in Europe’s biggest economy.

In July, Chancellor Olaf Scholz announced the government would step in to bail out Uniper with a package worth up to €15 billion ($15.3 billion), after it was brought to its knees by months of Russian supply cuts and soaring spot market prices.

Under the rescue deal, the government committed to provide €7.7 billion ($7.8 billion) to cover potential future losses, while state-run bank KfW agreed to increase its credit facility by €7 billion ($7.1 billion).

But Habeck said the situation had “worsened dramatically” since Russia cut off gas supplies to Europe through the Nord Stream 1 pipeline indefinitely on September 1, citing an oil leak.

Russian gas has had to be substituted with costly alternatives, leading to soaring bills for consumers.

Although gas supplies through Nord Stream 1 are suspended, Germany’s gas reserves are filled at more than 90% capacity, European Storage provider GIE AGSI+ said on its website.

Still, the European energy crisis isn’t going away.

Habeck said that the country could “get through winter well” without Russian gas, but warned of “really empty” supply levels in the period thereafter.

…click on the above link to read the rest of the article…

Germany To Nationalize Struggling Uniper In Deepening Energy Crisis

September 21, 2022

Germany To Nationalize Struggling Uniper In Deepening Energy Crisis

Germany on Wednesday announced a move to nationalize struggling natural gas supplier Uniper SE as it strives to keep the industry functioning in the wake of a global energy crisis, according to Reuters.

Uniper is Germany’s largest importer of Russian NatGas and has suffered tremendous losses after Russian energy giant Gazprom slashed Nord Stream 1’s pipeline capacity to zero, forcing the utility to purchase natgas outside contracts on the open market at record high prices.

Berlin agreed to purchase the remaining stake owned by Uniper’s parent company, Finnish utility Fortum Oyj for $1.69 (1.70 euro) per share. Buying Fortum’s stake means Germany will own 99% of Uniper. The cost of nationalization comes as Berlin is set to inject 8 billion euros, equivalent to around $8 billion, into the utility.

The move is to keep the lights on across German homes and businesses as the risk of power rationings increases.

“This step has become necessary because the situation has worsened significantly.

“The state will do everything necessary to keep systemically important companies in Germany stable at all times,” Robert Habeck, Germany’s economy minister, said Wednesday.

Uniper shares crashed by as much as 39% to 2.55 euros. Shares are down 93% on the year…

In July, Berlin injected a whooping 15 billion euros ($14.95 billion) to save the utility though the move to nationalize ahead of winter shows further deterioration in energy security for Europe’s largest economy.

Here’s what Markus Rauramo, CEO and President of Fortum, said about the deal:

“Under the current circumstances in the European energy markets and recognising the severity of Uniper’s situation, the divestment of Uniper is the right step to take, not only for Uniper but also for Fortum.

…click on the above link to read the rest of the article…

A Natural Gas Shortage Is Looming For The U.S.

September 21, 2022

A Natural Gas Shortage Is Looming For The U.S.

As natural gas demand around the world breaks new records, U.S. shale producers are struggling to keep up with demand.
While natural gas prices in the United States fell after a railway strike was averted last week, it looks likely that prices both at home and abroad will spike this winter.
A hotter-than-expected summer and a lack of alternative energy sources have left U.S. inventories below the seasonal average.

Last week, the media rushed to report that natural gas prices in the United States had fallen sharply after trade unions and railway companies reached a tentative deal that averted a potentially devastating strike.

Indeed, natural gas prices fell by nearly a dollar per million British thermal units, helped by a respectable build in inventories. And yet, inventories remain below the seasonal average, exports are running at record rates, and producers are beginning to struggle to meet demand, both at home and abroad.

Reuters’ John Kemp wrote in a recent column that domestic and international gas consumption had risen to record highs, and shale producers—the ones that account for the bulk of U.S. natural gas output—were having a hard time catching up with this demand.

Meanwhile, although higher on a weekly basis, inventories remained at the second-lowest for this time of the year for the last 12 years, Reuters’ market analyst noted. He also added there were no signs of any improvement in the level of inventories despite the rise in prices.

None of this suggests lower prices for natural gas are coming to either the United States or international markets as the northern hemisphere heads into winter. On the contrary, the latest figures suggest more financial pain for gas consumers. And they confirm, to an extent, forecasts made earlier this year.

…click on the above link to read the rest of the article…

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