• 4 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 6 minutes UAE says four vessels subjected to 'sabotage' near Fujairah port
  • 9 minutes Why is Strait of Hormuz the World's Most Important Oil Artery
  • 13 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 19 mins California's Oil Industry Collapses Despite Shale Boom
  • 4 hours Knock-Knock: Aircraft Carrier Seen As Barometer Of Tensions With Iran
  • 4 hours The Consequences: Full-Blown Trade War Will Push World Towards Recession
  • 7 hours Greenpeace Blocks BP HQ
  • 1 hour Australian Voters Reject 'Climate Change' Politicians
  • 8 hours Global Warming Making The Rich Richer
  • 4 hours IMO2020 To scrub or not to scrub
  • 2 hours Shale to be profitable in 2019!!!
  • 5 hours Did Saudi Arabia pull a "Jussie Smollett" and fake an attack on themselves to justify indiscriminate bombing on Yemen city population ?
  • 10 hours Shell ‘to have commercial wind farms’ by early 2020s
  • 8 hours California Threatens Ban on ICE Cars
  • 1 hour Wonders of Shale- Gas,bringing investments and jobs to the US
  • 2 hours UK Needs New Wind Turbines
  • 5 hours 6 Ways to Fight Climate Change
  • 54 mins Apartheid Is Still There: Post-apartheid South Africa Is World’s Most Unequal Country
Alt Text

Why Can’t Japan Kick Coal And Nuclear?

A new report shows that…

Alt Text

Thermal Coal Prices Are Soaring

With tight supply in key…

Alt Text

Trump’s Bizarre Bid To Bailout Coal And Nuclear

The Trump administration is doing…

Nick Cunningham

Nick Cunningham

Nick Cunningham is a freelance writer on oil and gas, renewable energy, climate change, energy policy and geopolitics. He is based in Pittsburgh, PA.

More Info

Trending Discussions

U.S. Utilities Facing Fuel Shortage Problems As Winter Approaches

American utility companies are facing lower-than-average fuel supplies as they begin to stockpile for the winter.

Part of the reason is the country’s oil boom. Moving oil by rail has become so widespread that train backups are making it hard for utilities to receive shipments of coal, which in some cases is leaving power plants critically low on fuel supplies.  

Coal stocks were inordinately depleted during the unusually long, cold snowy winter in the U.S., which saw an elevated level of electricity demand. Months later, coal-fired power plants are still struggling to replace their coal supplies.

“Coal piles around the country have gotten to levels that don’t make us 100 percent comfortable,” David Crane, CEO of NRG Energy, told Bloomberg in an interview. The amount of coal on hand hit just 39 days’ worth of supply in July 2014, the month for which the latest data is available. That is down from a 57-day supply at the same time in 2013.

Non-ignite days of burn

That is largely due to clogged rail lines. A record grain harvest is coinciding with a historic oil boom. All these commodities are competing for limited rail capacity, making it difficult for coal to get through to their final destinations. Some utilities have even had to resort to using trucks to deliver coal. Several power plants have partially or completely shut down operations due to a lack of fuel supply.

Related: West Virginia Unprepared For Future Without Coal

NRG Energy is stockpiling alternatives at many of its power plants, and may burn oil if coal shortages become acute.

The main alternative to coal for electricity is natural gas. But natural gas inventories are also significantly lower compared to one year ago. That, too, is because of record-breaking consumption during the winter of 2014, which caused prices to briefly spike over $6 per million Btu (MMBtu).

On the other hand, just as supplies were burned through so quickly during the cold months, the U.S. has seen inventories replenished at a record pace. That has helped bring natural gas prices down from their highs in January and February (see chart).

But, heading into winter, America’s natural gas stocks are at their lowest levels in six years.  Total natural gas supplies reached 3.1 trillion cubic feet (tcf) at the end of September, which is 11 percent lower than last year at this time.

Natural gas futures month ahead

Complicating matters further is the retirement of some nuclear and coal-fired power plants since last year, which could put extra strain on natural gas supplies. An additional 1 billion cubic feet of natural gas demand is likely as a result.

Related: Coal Exports from West Coast Running Out of Time

And the biggest problem for the northeast may not be fuel supplies, but infrastructure. A lack of pipeline capacity was one of the main culprits for last winter’s price increases, a problem that has not been addressed in the meantime.

Still, as of mid-October, futures prices are not much higher than they were at the same time last year, despite the recent anxieties voiced by utility executives about having enough fuel for winter. What’s going on?

It is likely that the latest winter weather forecasts eased market fears a bit. The National Oceanic and Atmospheric Administration predicts that the winter of 2015 will see higher than average temperatures for Alaska, Hawaii, the western U.S., and crucially, the New England area. “Last year’s winter was exceptionally cold and snowy across most of the United States, east of the Rockies. A repeat of this extreme pattern is unlikely this year,” NOAA said in its report.

If that is the case, utilities could have no problems meeting winter demand and price spikes would be averted. Here’s hoping for a warmer winter.

By Nick Cunningham of Oil price.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment
  • Mac McDermott on October 20 2014 said:
    An additional 1 billion cubic feet of natural gas? Did you mean that or a larger number? A billion is not much. Thanks

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News