# Natural Gas **Natural Gas Weekly Update** for week ending June 12, 2013 | Release Date: June 13, 2013 | Next Release: June 20, 2013


## In the News:

**Southern California Post-SONGS Relies Even More on Natural Gas** No energy planners counted on 2,150 megawatts (MW) of power this summer from the shuttered San Onofre Nucle ar Generating Station (SONGS), but with the June 7 anno uncement by owner Southern California Edison that it i s permanently retiring the troubled SONGS, planners and electricity co nsumers will rely even more on natural gas for power ge neration.
Since June 2012, 2,214 MW of new power generating capa city has come on line in Southern California, representi ng more than 9% of expected available generation this summer. Ab out three-fourths of this capacity is fueled by natural ga s. For the state as a whole, natural gas accounts for most of the e xpected available generation this summer. In its Summer Loads and Resources Assessmentpublished in May, California's grid operator reported that natural gas accounts for 71.5% of the 51,068 MW of expected available generation this summer , followed by 15.3% hydro, and 7.7% nonhydro renewable s. Nuclear (excluding SONGS) accounts for 4.3% and coal and oil together make up a combined 1.2%.
The two SONGS units were taken out of service in January 2 012 because of operations problems, which Edison now fee ls cannot be resolved. Between 2002 and 2011, generation from SONGS made up about 18% of total generation i n the SoCal Edison and San Diego Gas and Electric California service territories, and the absence of the units created major challenges for the Southern California electric grid. According to Bentek Energy Services estimates, replacement natural g as-fired generation consumed on average 400 million cubic feet pe r day (MMcf/d) to 500 MMcf/d of gas since SONGS shut dow n 18 months ago.

The combination of recent capacity additions and electric system upgrades since June 2012 will help meet peak electricity demand this summer.
In addition to generation needs, the current transmissio n system limits the amount of electricity that can flow int o the service territory formerly served by SONGS. Thus, new transmission infrastructure is needed to address reliability problem s. SoCal Edison plans to bolster the local grid at strategic points in the Los Angeles and San Diego areas to allow the system to handle more power being brought into the system, as we ll as to implement other system upgrades to bring in more power from outside the area.


## Overview:

**(**For the Week Ending Wednesday, June 12, 2013 **)** • Natural gas hub prices declined in most regions this week (Wednesday to Wednesday). The Henry Hub closed at $3.74 per million British thermal units (MMBtu) yesterd ay, down 25 cents, or 6.3%, for the week. • At the Nymex, the near-month (July) Nymex contract finishe d trading yesterday at $3.777 per MMBtu, 22.4 cents, or 5.6%, below its previous Wednesday close. 

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**8/ 1/** **2015 http://www.eia.gov/naturalgas/weekly/archive/2013/06_13/index.cfm** • Working natural gas in storage increased to 2,347 billi on cubic feet (Bcf) as of Friday, June 7, according to the U.S.

Energy Information Administration's (EIA) Weekly Natura l Gas Storage Report (WNGSR). A net storage injection of 95 Bcf for the week resulted in storage levels of 587 Bcf below year-ago levels, and 58 Bcf below the 5-year averag e. • The Baker Hughes natural gas rotary rig count totaled 354 units as of Friday, June 7, the same total as the preceding three weeks. The average oil rig count declined by 4 unit s to 1,406. • The weekly average natural gas plant liquid composite pr ice for last week (Monday, June 3 – Friday, June 7) fell o nly $0.03 per MMBtu over the previous week to $9.08 per MMB tu. The natural gasoline spot price increased by 2% and the ethane spot price fell by 4%. The ethane price has been declining consistently each week since the week of Apr il 29 when it averaged $4.02 per MMBtu. Last week the eth ane spot price averaged $3.59 per MMBtu. 

## Prices/Demand/Supply: Natural gas spot prices declined this week. The Henry Hub spot price began the report week on We dnesday, June 5, at $3.99 per MMBtu, and declined to $3.74 per MMBtu on Wednesday, June 12, amid moderate temperatures for most of the country. Most other major trading hubs also saw prices dec line by $0.15-$0.25 per MMBtu for the report week.
Planned maintenance work by Millennium Pipeline on a co mpressor station resulted in no nonfirm capacity available at one delivery point and several receipt points for June 11 thro ugh June 14, according to a company notice. Millennium, w hich runs west to east in southern New York state, is supplied by loca l production, including Marcellus Shale gas, storage fiel ds, and interconnecting upstream pipelines, and serves customers alon g its route, terminating at Rockland County, New York. P rices at the Millennium East Pool in New York for Tuesday del ivery declined $1.81 versus prices for Monday delivery, but recovered somewhat later in the week to end the reportweek down $1.21 versus the previous Wednesday.
The Nymex futures price decreased week-on-week. The near-month Nymex price declined by $0.224 per MMBt u over the report period, from $4.001 per MMBtu last Wednesday t o $3.777 per MMBtu yesterday. More than $0.17 per MMBt u of that drop occurred in trading on last Thursday, spurred on by a report of a larger natural gas storage injection th an market expectation. The 12-month strip (the average of July 2013 to June 2014 contracts) closed the report week at $3.949 per MMBtu, down 18.6 cents, or 4.5%, from its closing price on Wednesday, June 5.
Total demand decreased week-on-week, as power deman d declined. According to Bentek estimates, overall natural gas consumption in the United States decreased by 3.3%, drive n by a 4.5% decline in the power sector. Although powe r sector natural gas consumption increased across most of the country, this was offset by small declines in the Southeast and Midwest, and by a large decline in the Northeast. Natu ral gas consumed for electric generation in the Northe ast decreased by 24.5% week-over-week because of cooler, more seasonal cur rent week temperatures than the previous week.
Total supply for the report week was down slightly. Bentek estimated that supply was down slightly for the re port period. U.S. gross and dry natural gas production both declined by 0.7% week-on-week. Net pipeline imports from Canada were down 6.8%. Net imports in the West and Midwest increased slightly, but were offset by declines in the Northeast. T he Northeast was a net exporter of natural gas to Canada o ver the current report week, while it had been a net i mporter the period before. LNG imports continued to account for less than 1% of total U.S. supply. 

## Storage Working natural gas in storage increased to 2,347 B cf as of Friday, June 7, according to EIA's WNGSR. The 95 Bcf gain in storage levels was higher than both the 5-year average and year-ago stock changes for the week, which had net injections of 84 Bcf and 66 Bcf, respectively. Despite thelarge build, current inventories remain 587 Bcf (20.0% ) less than last year at this time and 58 Bcf (2.4%) below the 5-ye ar average of 2,405 Bcf.
The net injection was in line with the market expectati ons, which, on average, were reported to be 94 Bcf. Pri or to the report's release, at the start of the trading day, the near-mon th Nymex contract price dropped from yesterday's close of $3. 777 to 

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8/ 1/2015 http://www.eia.gov/naturalgas/weekly/archive/2013/06_13/index.cfm$3.715 per MMBtu. After increasing throughout the mor ning, by the time of the report's release at 10:30 a.m ., prices were

trading higher, at similar levels as the prior day's close. The report's release had minimal effect on the prices.
All three storage regions posted increases this wee k. Inventories in the East, West, and Producing regions increased by 57 Bcf (the 5-year average net injection is 53 Bcf), 13 B cf (the 5-year average net injection is 14 Bcf), and 25 Bcf (the 5-year average net injection is 17 Bcf), respectively. In the Prod ucing region, working natural gas inventories increased 5 Bcf (2.0%) in salt cavern facilities and increased 20 Bcf (3.2%) in nonsalt cavern facilities.
Seasonal spring temperatures during the storage rep ort week supported this week's net injection. Temperatures in the Lower 48 states were 1.7 degrees warmer than the 3 0-year normal temperature and 2.0 degrees warmer than the same period last year, and averaged 69.3 degrees for the wee k, compared to 67.3 degrees last year and the 30-year nor mal of 67.6 degrees. 

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8/ 1/2015 http://www.eia.gov/naturalgas/weekly/archive/2013/06_13/index.cfmSpot Prices ($/MMBtu) Thu, 06-Jun Fri, 07-Jun Mon,

10-Jun Tue, 11-Jun Wed,

12-Jun Henry Hub 3.93 3.79 3.85 3.77 3.74 New York 3.82 3.68 3.94 3.94 3.86 Chicago 3.94 3.75 3.87 3.81 3.81 Cal. Comp. Avg,* 3.90 3.76 3.81 3.74 3.73 Futures ($/MMBtu) July Contract 3.827 3.828 3.800 3.724 3.777 August Contract 3.843 3.848 3.821 3.743 3.797 *Avg. of NGI's reported prices for: Malin, PG&E citygate, and Southern California Border Avg. Source: NGI's Daily Gas Price Index 

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8/ 1/2015 http://www.eia.gov/naturalgas/weekly/archive/2013/06_13/index.cfmU.S. Natural Gas Supply - Gas Week: (6/5/13 - 6/12/ 13) Percent change for week compared with: last year last week Gross Production 2.98% -0.67% Dry Production 2.95% -0.66% Canadian Imports -18.13% -6.77% West (Net) -10.88% 0.74% MidWest (Net) 0.15% 3.85% Northeast (Net) -119.98% -138.75% LNG Imports -45.26% -32.82% Total Supply 0.87% -1.26% Source: BENTEK Energy LLC

U.S. Consumption - Gas Week: (6/5/13 - 6/12/13) Percent change for week compared with: last year last week U.S. Consumption -7.24% -3.28% Power -16.42% -4.49% Industrial -0.18% -1.12% Residential/Commercial 3.38% -4.20% Total Demand -7.17% -3.48% Source: BENTEK Energy LLC 

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8/ 1/2015 http://www.eia.gov/naturalgas/weekly/archive/2013/06_13/index.cfmRigs

Fri, June 07, 2013 Change from last week last year Oil Rigs 1,406 -0.28% -0.57% Natural Gas Rigs 354 0.00% -37.35% 

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8/ 1/2015 http://www.eia.gov/naturalgas/weekly/archive/2013/06_13/index.cfmMiscellaneous 5 -28.57% 0.00%

Rig Numbers by Type

Fri, June 07, 2013 Change from last week last year Vertical 439 -2.44% -23.25% Horizontal 1,088 -0.09% -7.56% Directional 238 2.59% 1.28% Source: Baker Hughes Inc.

billion cubic feet 

### Working natural gas in underground storage

5-year (2008-2012) maximum Working Gas in Storage 5-year (2008-2012) minimum Jul '11 Jan '12 Jul '12 Jan '13 Jul '13 1,000 2,000 3,000 4,000

Source: Form EIA-912, "Weekly Underground Natural G as Storage Report"

Working Gas in Underground Storage Stocks billion cubic feet (bcf) Region 6/7/13 5/31/13 change East 1,025 968 57 West 409 396 13 Producing 913 888 25 Total 2,347 2,252 95 Source: U.S. Energy Information Administration 

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8/ 1/2015 http://www.eia.gov/naturalgas/weekly/archive/2013/06_13/index.cfmWorking Gas in Underground Storage Historical Comparisons Year ago (6/7/12) 5-year average (2008-2012) Region Stocks (Bcf) % change Stocks (Bcf) % change East 1,400 -26.8 1,127 -9.1 West 434 -5.8 363 12.7 Producing 1,100 -17.0 915 -0.2 Total 2,934 -20.0 2,405 -2.4 Source: U.S. Energy Information Administration

Temperature -- Heating & Cooling Degree Days (week ending Jun 06) HDD deviation from: CDD deviation from:
Region HDD

Current normal last

year CDD Current normal last

year New England 15 -13 -23 35 30 27 Middle Atlantic 11 -9 -12 37 22 29 E N Central 30 5 -9 15 -9 12 W N Central 38 17 7 8 -22 -12 South Atlantic 0 -6 -5 72 12 10 E S Central 1 -5 -6 64 11 14 W S Central 1 1 0 94 10 -6 Mountain 27 -7 15 52 14 -3 Pacific 4 -19 -9 26 10 7 United States 15 -4 -5 45 8 9 Note: HDD = heating degree-day; CDD = cooling degre e-day
Source: National Oceanic and Atmospheric Administra tion



### Average temperature (°F) 7-Day Mean ending Jun 06, 2013 

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8/ 1/2015 http://www.eia.gov/naturalgas/weekly/archive/2013/06_13/index.cfmSource: NOAA/National Weather Service



### Deviation between average and normal (°F) 7-Day Mean ending Jun 06, 2013

Source: NOAA/National Weather Service 

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8/ 1/2015 http://www.eia.gov/naturalgas/weekly/archive/2013/06_13/index.cfmDownload figure data 

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