In the regional natural gas markets in the United States this winter, experts predict a rise in prices, reports Reuters. World prices have been hitting records for several weeks.
If at the beginning of the year gas futures on the TTF hub in the Netherlands cost $ 256 per 1,000 cubic meters, then on October 6, their value exceeded $ 1,900, once again renewing the historical maximum. Thus, in just over nine months, gas rose in price by almost 650%.
Rising gas prices in Europe and Asia have reduced the activity of producers from Spain to the UK, triggering an energy crisis in China. In the United States, however, the situation is reversed. As Reuters reports, America is protected from the global crisis as most gas remains in the country.
For example, in New England and California, gas prices will be well above the national benchmark this winter. “High winter prices are nothing new in New England and California, where there are few pipelines. In both regions, the coldest days regularly become a problem.
But it could be worse this winter,” the study says. Buyers of the New England states of Maine, Vermont, New Hampshire, Massachusetts, Connecticut, Rhode Island expect an almost fourfold rise in gas prices. Kepler’s leading oil expert for the Americas, Matt Smith, pointed out that prices for the Henry Hub, a Louisiana-based gas hub, continue to rise but should skyrocket with the coming of winter. In addition, gas-fired power plants generate about 49% of New England’s electricity.
is in line with the last five years, but overall demand is growing as the economy recovers. “What drives gas prices is the increased demand for pipeline gas as the economy recovers, and supply is catching up during the pandemic,” said Caroline Pretyman, spokesman for New England’s largest energy provider Eversource Energy. New England imports approximately 16 billion cubic feet of LNG in winter, equivalent to 5% of winter gas consumption. However, competition from Europe and Asia means that these supplies will be expensive.
Some power generators have another option – switching to fuel oil combustion. Now fuel oil costs about three times more expensive than natural gas, so if such a replacement occurs, it will also increase the cost of natural gas. Analysts expect New England to start burning oil earlier than usual this year. But it also emits about 30% more carbon dioxide and other pollutants.
According to grid operator ISO New England, during the extreme cold at the end of December 2017, oil jumped 27% of total electricity generation, up from less than 1% at the beginning of this month. The situation in California The price of gas at the Southern California border this week was more than $ 13. This figure may be the highest since February 2021, when prices reached record levels due to cold weather in Texas.
In California itself, gas prices have also risen as the state suffered from a prolonged drought that limited the ability to generate electricity from hydropower. Solar energy was also scarce due to the smokescreen from forest fires, analysts said. As a result, the state relied more on gas-fired power plants.
They account for about 45% of electricity generated this winter. This figure is 41% higher than the average over the past five years. According to federal forecasts, in 2021, only 4% of California’s electricity production will come from hydroelectric power plants, compared with a five-year average of 14%.