EIA: US natural gas capacity hit bottom! Inventory test in winter

With the rotation of the earth, today is the second day and night average day of the year - the autumnal equinox. After this day, night and cold will increase day by day.?

In terms of climate, winter is only a month away. The heating problem in Europe has also been paid more and more attention, and even news like "stealing firewood" can be seen from time to time.

To some extent, it can also reflect the impact of the current energy crisis.

As a few moneymakers in this energy crisis, the United States has become the world's largest exporter of natural gas, and the share prices of related energy enterprises have risen. But behind the optimistic market, there are “mines” to be detonated.

With the continuous increase of export orders, the natural gas production capacity of the United States has reached the bottom. The production capacity cannot be increased rapidly. In case of extreme weather, the United States will fall into the “winter heat preservation war” like Europe!

All this depends on the temperature in winter.

EIA shows the production of natural gas in September

Judging from the current natural gas inventory in the United States, if the United States encounters the cold winter of last year again this year, the soaring domestic and foreign demand may greatly boost the natural gas consumption in the United States. US natural gas inventory will face great pressure.

According to the US Energy Information Administration (EIA), as of September 9, the US natural gas inventory was 2771 billion cubic feet, the second lowest level since 2010. Since late January, the natural gas inventory has remained below the five-year average level before the pandemic.

Although prices have risen, there is no sign of imbalance between supply and demand.

The EIA's weekly natural gas storage report released on September 15 shows that the current average inventory level has dropped by 398 billion cubic feet compared with that before the pandemic. This figure was 316 billion cubic feet on April 1 this year, while the current total inventory is only 2771 billion cubic feet, leaving only about two months to replenish the natural gas inventory.

The inventory is at such a low level. Once there is a hurricane at the end of the season in the Gulf of Mexico, or there is a cold winter or even an ice storm in Texas, the main production area, the inventory will be unable to buffer the price rise and the domestic supply and demand gap, which will seriously affect people's livelihood.

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However, at present, the United States itself does not have enough reserve capacity to quickly fill the gap caused by a large number of recent exports.

Enterprise executives issue capacity warnings

In response to this phenomenon, American shale oil and gas enterprises warned early this month that they could not rapidly increase oil and gas supply to alleviate the energy shortage in Europe in winter.

The senior executives of the enterprise said: Due to the rising energy prices in Europe, the export volume of oil and liquefied gas in the United States has increased, but it is close to the maximum limit. The growth of crude oil production this year may be lower than the previous government forecast of 1 million barrels/day.

EIA's expectation of WTI's crude oil, natural gas, electricity and other related prices

Similarly, crude oil enterprises as raw materials have also reported similar situations. In an interview with the media, the CEO of PXD.US, an American crude oil giant, revealed that the number of drilling platforms has not increased at present. With the supply tightening, the crude oil price may rise by more than 120 dollars per barrel this year.

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The reason for the shortage of supply is that in addition to the time required for new drilling platforms, the tendency of the capital market does not want to increase crude oil production. Investors in the capital market prefer the low output high profit model.

Therefore, it seems that in the short term, the gas supply tension in the United States may change little in the future. Once the winter heating inventory is out of balance, other energy sources may be needed as an alternative.

The largest climate bill in California history

As it happens, California has actually begun to implement preventive measures against climate impacts. The governor of California signed the largest climate bill in California's history on September 16.

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The new laws include those aimed at reducing the exposure of colored communities to natural gas and oil pollution, expanding clean energy employment opportunities, and speeding up the timetable for most of California's electricity to come from renewable energy to reach carbon neutrality by 2045.

The specific policies include "54 billion US dollars are planned to be put into use within five years, of which about 6 billion US dollars will be used for electric vehicles, and more than 8 billion US dollars will be used for decarbonization of California's power grid, which still relies heavily on natural gas." (CNN's summary)

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It also includes nearly $15 billion for improving public transport and more than $5 billion for climate and drought relief programs. The decommissioning date of nuclear power plants that provide 15-20% of the state's electricity was postponed from 2025 to 2030. The bill prohibits the drilling of any new oil and gas wells, and focuses on limiting the drilling and exploitation in the oil-rich Central Valley area and around Los Angeles.

Obviously, it can be seen from the content of the bill. California has started to break away from natural gas, and will implement major adjustments to the power grid in the future. In the construction of renewable green power, the future will be an outbreak period.

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According to the data of operators, the renewable energy power generation in California exceeded the power demand for the first time in May this year. The green energy power generation was 17636 trillion watts, and the power demand was 17548 trillion watts, which lasted for about an hour.

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This proves that traditional electricity can be completely replaced, but sufficient facilities are needed to fill the power gap.

Acceleration of energy storage demand

Although some policies have started to fill the gap of natural gas capacity, it still takes some time to implement them. The cold winter is coming, and it is only one month away. The policy has relatively little impact in the short term, so it is crucial to grasp the existing resources.

Especially for California, a region with clean energy as its main power structure. Power needs to be stored for use in winter, which will be a period of high demand for energy storage equipment. High quality energy storage equipment will play a role in the critical period.

Good energy storage equipment will reduce maintenance costs and increase power storage.

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The two-way impact of the current energy crisis is threatening people's daily life. Winter is approaching. It's time to play the role of equipment.

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