February 8, 2017 | Denver, CO
February 8, 2017 | Denver, CO
The following post was co-authored by Russo on Energy Partner, Tom Russo.
LNG Peak Shaving Plants costing between $12 million and $200 million are a proven alternative to gas pipelines and large underground storage facilities. They can also ensure deliverability to gas-fired power plants for short periods during extreme weather conditions when natural gas prices peak or where pipeline capacity is constrained. Read more about Is It Time to Rethink Gas Storage and Pipelines?
The National Capital Area Chapter of the U.S. Association for Energy Economics (NCAC-USAEE) featured Tom Russo, Founding Partner of Russo on Energy LLC in its July 2016 newsletter. Tom spoke about key economic/policy issues facing the energy industry and why the NCAC-USAEE is a great place to network in Washington DC.
Several friends and colleagues recently asked me for suggestions on what energy books to read this summer. They were planning vacations at the beach, the mountains and a few were venturing overseas. Two books came to mind that I thought would fascinate them and at the same time give them an edge in engaging new friends who always seem to want to discuss U.S. energy policy and environmental matters. Should you read both books? Given that the power sector is becoming a large consumer of gas it would be wise to read The Green and the Black first and then follow it with The Domino Effect. Reading both books is like eating "Mac and Cheeze." They are an unbeatable combination. Read more about 2 Energy Books to Read This Summer
Recently, a colleague doing work for the United Nations Development Programme in Russia requested me to send her the best guidance available on planning international hydropower projects. She was attempting to minimize impacts on biodiversity and ecosystem services. While I have been away from Hydropower for a while, I was really hard pressed to find current documents that would help her. Most reports were too general and few, if any, talked about planning and regulating hydropower projects, which can last 50 years or longer. I found this difficult to understand despite the wealth of experience in the U.S. and Canada in siting and regulating hydropower.
I quickly realized that in the hydro arena, we were still grappling with environmental, regulatory and social issues. The same is true for siting natural gas and renewable energy. However, the stakes are higher today since the World Bank Group and the Asian Infrastructure Bank are investing in hydropower in to spur economic development, address Climate Change and move countries away from fossil fuels. So I dusted off three publications below that should help both developing and developed countries to better plan and manage their hydropower and other energy projects. Here's a short explanation of each:
Tom Russo, who founded energy consultancy Russo on Energy after spending 30 years at FERC, spoke to Bloomberg's Christopher Long about the state of pipeline build-out in the U.S, and the future of the U.S. natural gas market. The interview also appears in Bloomberg Brief- Power & Gas. Read more about 'People Think if They Can Stop Pipelines They Can Stop Fracking,' says Tom Russo
Excuse my use of the term “stress test”, but that’s exactly how I view the challenges that the California grid operator, State officials and energy companies will confront this summer when they have to operate their electric system without the natural gas from the Aliso Canyon Gas Storage facility. As most of you know, the State of California has banned use of the facility for safety reasons.
It’s definitely not “business as usual” with Aliso Canyon out of the picture. California takes pride in its renewable energy portfolio, but relies on 17 gas-fired power plants in the Los Angeles Basin and San Diego to meet peak demand and changes in supply due to the variable nature of solar and wind power generation. These 17 power plants are normally supplied by the Aliso Canyon Gas Storage Facility. Other electricity regions also rely on gas-fired generation and available pumped storage hydro projects to manage changes in wind and solar power. If they lost significant natural gas infrastructure, they would be in the same position as California.
The opportunities to learn this summer from California’s experience are great. The electric power industry relies heavily on modeling to forecast likely events and necessary investments in electric infrastructure and the fuels to operate power-generating facilities. Hopefully we can argue less about banning fracking and natural gas facilities and learn more about how to operate an increasingly “gassy” and renewable energy portfolio in California under less than ideal conditions. Of course, the weather will dictate the electricity demand and what resources California will use to maintain adequate service, and maintain electric reliability and air quality. Read more about Southern California’s Summer Electric-Gas Reliability Stress Test
Many people fail to see or are willing to admit the positive role that the shale gas revolution will play in easing the pain of implementing EPA's Clean Power Plan (CPP). In my opinion, abundant and cheap natural gas really takes the wind out of the sails of those who argue against the CPP. Lets also remember that affordable and efficient gas-fired combustion turbines will be ramped up and down in many regions to integrate all the wind and solar into the electric grid for the near future. Current natural gas prices at $2.07/MMBtu make that relatively easy and very affordable. As a result, the U.S. power sector is becoming more "gassy" and more dependent on a reliable delivery of gas. At this time, 3,000 MW of new, natural gas-fired generating capacity is either under construction in New England or will be soon. New York and PJM are also seeing increases in natural gas fired power plants.
But what would happen if there wasn't enough pipeline capacity to transport gas to markets to meet heating and electricity needs during winter? We already have the answers- very high natural gas prices that were up to 50x the average price. Read more about Pipeline Constraints Could Stifle Clean Power Plan, Increase Gas Prices
I recently commented on an article in Energy Risk Magazine entitled "Citadel builds physical gas trading business." However, I realized that I had missed the mark and that Citadel's move could possible inject some creativity into natural gas marketing. Read more about Will Citadel be a better natural gas marketer?
I know that declining oil prices are in the news. However, the one bright spot is oil's role in electricity markets, especially during winter. Here’s a short summary of work that Devin Hartman [now the Electricity Policy Manager at the R Street Institute] and I did previously when we were trying to determine dual-fuel oil fired power generation’s role in ensuring the electric reliability in organized electricity markets. Read more about Oil's Critical Role in Electricity Markets During Cold Winters