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The December wholesale natural gas contract was slightly lower settling at $3.649 on the day after another record storage injection for the first week of November and a lack of significant heating demand into the second half of this month. The weekly change on our table bellows shows us down 5.5% on the week which equates to the DJIA being down almost 605 points on the week. It’s the same theme we have been discussing all week which is the winter is having a hard time getting started and drillers continuing drilling into the shale plays since the natural gas and liquids that are coming out of the ground are very profitable for them ranging paybacks on their investments from 15% to over 100% return on some shale locations such as the granite wash which is located in Northeast Texas according to Bentek’s calculations.
In the lone star state, the U.S. Environmental Protection Agency has awarded a greenhouse gas permit for a natural gas-fired plant in Texas, the first the federal agency has issued since taking over the Lone Star State's permitting program in January. The EPA announced on Thursday it had awarded the permit to the Lower Colorado River Authority, which plans to modernize and expand a 37-year-old unit. The EPA took over the Texas greenhouse gas permitting program after the state refused to comply with new regulations designed to lower pollution. All states agreed to abide by the rules except Texas. Gov. Rick Perry, who's a GOP presidential candidate, has long battled against EPA regulations, accusing the agency of meddling in state affairs. Texas leads the nation in greenhouse gas emissions and industrial pollution.
This past year in Ercot, electricity prices in May and June were moderated by the amount of wind that turns turbines and thus creating electricity and then in July and August the wind stopped blowing, extreme temperatures took over and that’s when many power suppliers lost boatloads of money. NRG reported a quarter billion dollar loss while other small players had losses but not as large. This has led some people who know about renewable energy to look upon the mechanics of wind forecasting, during which workers set up meteorological equipment to measure when, where and how strongly the wind will blow at the site of a proposed wind farm. This information can make wind turbines and the power they produce more economical and reliable. The same can be said of knowing when and where the sun will shine if you are the developer of a solar energy facility. The people to whom you sell your energy must know they can rely on the resource, something you might not be certain of if you don't have the kind of information that solar forecasting can put at your fingertips. Solar forecasting is still in its infancy. One place it is being developed is the University of California's San Diego campus, where the Department of Energy is taking an interest, to the tune of a $1.93 million grant in 2010 with $500,000 cost share from the California Energy Commission in developing ways to make solar energy more reliable through forecasting. Since I grew up in New Mexico, I could provide these folks a lot of input since the sun shines there 333 days out of the year whether you like it or not. However, this is free advice.
In the state of California, Arnold Schwarzenegger, said during a 2007 state address that, "I believe that together not only can we lead California into the future, we can show the nation and the world how to get there”. California-based companies led the country in 2010 by accounting for more than 60 percent of all U.S. venture capital investments in clean energy, and in recent decades, the state purports to have used aggressive demand-side management and efficiency programs to flatten its per capita electricity demand rate 40 percent below the national average. For the rest of the United States, the necessity to pursue the California model is becoming clearer for some folks and not so clear for its detractor’s. California detractors are not so sure of the success of the state's electricity policies. The criticism centers on higher costs, changes in job structure and increases in imports. Overall, the state's electricity rates are about 45 percent higher than the national average, and California's strategy appears to be more demand destruction through even higher prices. California's newly implemented 33 percent renewable portfolio standard (RPS) by 2020 could increase electricity costs by nearly 30 percent, according to The Brattle Group's Jurgen Weiss and Mark Sarro in the 2009 report "The Economic Impact of AB 32 on Small Business." That's 65 percent higher than information put forth by the California Public Utilities Commission (CPUC) in its report "33% Renewables Portfolio Standard Implementation Analysis Preliminary Results." The present analysis seeks to augment the growing body of literature declaring that California's position as the leader in sustainable electricity policy is more illusory than real.
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