Inventories of natural gas in operation in the US Pacific region rose to 73 billion cubic feet (Bcf) on March 31, the Energy Information Administration (EIA) reported on Thursday, which it said is the lowest recorded as unusually cold temperatures boosted consumption.
But as the country’s heating season that began in November 2022 ended last month, Pacific natural gas stocks rose to 90 Bcf late last week, according to a separate report from EIA also published on Thursday.
“Dwindling natural gas inventories contributed to higher wholesale prices for natural gas and electricity on the West Coast,” he said in his analysis for the Pacific.
“Working gas stocks stood at 250 Bcf at the start of the 2022-23 heating season in the Pacific region, down 10% from the five-year average and below the 300 Bcf threshold common before the heating season 2017-18,” the EIA said. .
“A below-average 2022 recharge season pushed the shortfall to the region’s five-year average. Net injections in the region last summer were just 85 Bcf, 21% below average of five years”.
It also cited operational changes due to lower inventories, particularly Pacific Gas & Electric Co’s reclassification of 51 Bcf of natural gas in operation to base gas, noting that the company is the largest natural gas retailer in Northern California . That was a permanent reduction of 51 Bcf, the agency said.
He added: “The region’s largest storage field, Southern California Gas Company’s (SoCalGas) Aliso Canyon also had its effective working gas capacity reduced after a leak at the facility on 2015. Prior to the accident, SoCalGas’ maximum working gas capacity was 136 Bcf.”
In addition to lower storage rates, the withdrawals helped reduce natural gas stocks in the Pacific to the lowest level since the EIA began tracking in 2010.
It noted “an increase in natural gas consumption in the residential and commercial sectors due to colder-than-normal temperatures in the Pacific region.”
“Considerably colder than normal temperatures prevailed for most of the 2022-23 heating season in the Pacific region. Cumulative heating degree days during the heating season were the highest since the heating season 1984-85,” the EIA said, analyzing data from the National Oceanic and Atmospheric Administration. “These colder-than-normal temperatures increased demand for natural gas heating and resulted in greater withdrawals from natural gas storage.”
Cold temperatures increased residential and commercial intake in the region by 15.2 percent or four billion cubic feet per day compared to the five-year average, while that of the electric power sector increased by 25.2 percent compared to the five-year average, the EIA was quoted as saying. Specific data
Electric generators also turned to natural gas to offset weaker hydroelectric generation, which fell 16 percent last winter from the previous winter, the EIA said.
Withdrawals in the region during the heating season were the highest since the 2013-14 season.
“These increases in natural gas consumption were partially offset by net inflows in the Canada region and the Mountain region, and withdrawals from natural gas storage offset the remainder of this increase in demand for natural gas,” the EIA said.
While the EIA did not consider the record cold Pacific to have led to historically high withdrawals, it cautioned that “the opening of operating natural gas levels at the start of the heating season often has a significant impact on the magnitude of gas withdrawals in operation during the following season because larger available inventories may mean larger withdrawals”.
In-process natural gas inventories in the continental United States, excluding Alaska, totaled 2.009 trillion cubic feet as of April 21, up 35.4 percent from the same period last year, according to the EIA’s latest “Weekly Natural Gas Storage Report.” The Pacific was the only region to record a year-on-year decline of 47.4 percent.
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