Natural gas consumption in the eastern half of the United States has been much higher than the western half, thanks in large part to the retirement of coal-fired and nuclear power plants but also due to weather-related impacts, the Energy Information Administration (EIA) said.
In its latest Natural Gas Weekly Update released Thursday, the EIA cited data from Bentek Energy showing 12.1 GW of coal-fired power generation capacity is expected to be retired in 2015, because of the Environmental Protection Agency's mercury and air toxics standards (see Daily GPI, March 18, 2014). About 4 GW of coal-fired capacity was retired in April, and an additional 32 coal plants -- collectively accounting for about 6 GW of capacity -- are scheduled to be retired in June.
The EIA also cited data from the National Oceanic and Atmospheric Administration (NOAA) that shows temperatures in the eastern United States have been above average for the past few months, especially in the Northeast, which had its warmest May on record.
Since May, temperatures in the Northeast have averaged 68.4 degrees F, 1.8 degrees warmer than the 2010-2014 average. NOAA also reported that the Northeast had periods of much warmer-than-normal temperatures in May and this past week.
"The warmer weather and large increases in gas-fired generation this year may be contributing to increases in Northeast prices in particular," the EIA said. "Although prices at Transcontinental Pipeline's [Transco] Zone 6 trading point for delivery to New York City have been lower this year than a year ago, they are closer to the Henry Hub national benchmark price.
"Between April 1 and June 16 last year, the Transco Zone 6 price averaged 82 cents below the Henry Hub spot price. For the same period this year, however, Transco Zone 6 prices have averaged only 23 cents less than the Henry Hub."