Energy Posts

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:

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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

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

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

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

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

As an energy expert, it’s difficult to escape news and commentary about EPA’s Final Clean Power Plan. However, I’m not a lawyer, but someone interested in how to make sense of the plan when it comes to cybersecurity and energy markets. More important, I’ve asked myself if the Clean Power Plan is just a speed bump or really a rule that is masking a megatrend. I’m leaning toward the latter when it comes to the energy sector, but have specific ideas when it comes to cybersecurity and ensuring reliable secure supplies and reasonable prices of electricity, natural gas, crude oil and refined petroleum products.  Read more

It’s no secret that Cheniere Energy’s chief executive Charif Souki would like to link LNG to global natural gas prices and unlink it to the value of oil. This is a great idea whose time has come. North America’s plentiful shale gas and future LNG Export facilities like Cheniere’s Sabine Pass terminal,  Dominion’s Cove Point terminal,  Freeport LNG's Freeport terminal plus cross border pipeline facilities to Mexico and Canada will make this a reality. Read more

Two articles in the September issue of Energy Risk Magazine raised troubling issues about the growing popularity of physical natural gas prices indices, declining number of transactions used to calculate them and growing regulatory risks that energy companies face from the FERC’s enforcement staff. Also falling liquidity at physical natural gas hubs could affect natural gas futures and swaps. Read more

Federal regulators at the Federal Energy Regulatory Commisson issued proposed regulations that would help to modernize the interstate natural gas pipelines in the U.S. Rumor has it that the Department of Energy pressured FERC to do so in an effort to reduce natural gas (methane) leaks from aging pipelines. Methane is a green house gas that makes significant contributions to global warming. Read more