Regional power markets in United States

There are three major integrated power grids in the United States: Eastern Interconnect --- east of the Rocky Mountains Western Interconnect --- west of the Rocky Mountains Texas Interconnect --- Texas Inside each interconnection, all of the transmission lines are synchronized ==> allows power to be transported across long distances...

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Heat rate and spark spreads

Heat rates Heat rate represent the efficiency of a power plant to convert fuel into electricity ==> Lower heat rate implies a more efficient power plant. $$\text{Heat Rate}=\frac{\text{Quantity of fuel used}}{\text{Quantity of power produced}}$$ The unit of heat rate is Btu/KWh or MMBtu/MWh, with 1 MMBtu/MWh = 1000 Btu/KWh For...

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Design of electrical trading markets

Spot vs forward power markets The forward power market is where the bulk of speculative tradings occur, while the spot power market is where daily auctions occur. The forward market is open to anyone with sufficient money to meet trading requirements, while the spot market is open only to power providers with the ability to generate power...

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Overview of electricity markets

It is hard to store electricity and expensive to transmit electricity over long distance ==> No unified national electricity market, instead just a collection of small regional markets with their own unique characteristics and regulations.In each market, supply and demand must constantly be matched, resulting in highly volatile prices. Regulations...

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Factors affecting natural gas prices

Natural gas prices are a function of market supply and demand. Because of limited alternatives for natural gas consumption or production in the short run, even small changes in supply or demand over a short period can result in large price movements to bring supply and demand back into balance. See Today in Energy, June 11, 2012 for recent...

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The price of natural gas

The price that residential consumers pay for natural gas has two main parts (all cost components include a number of taxes): Commodity costs — the cost of the natural gas itself, known as the wellhead cost. Transmission and distribution costs — the cost to move the natural gas by pipeline from where it is produced to the customer's local...

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Natural gas consumption in United States

Natural Gas Is a Major Energy Source for the United States About 25% of energy used in the United States came from natural gas in 2011. The United States used 24.37 trillion cubic feet (Tcf) of natural gas in 2011. How Natural Gas Is Used Natural gas is used to produce steel, glass, paper, clothing, brick, electricity, and as an essential...

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Natural gas reserves in United States

Underground Reservoirs Hold Oil and Gas A "reservoir" is a place where large volumes of methane, the major component of natural gas, can be trapped in the subsurface of the Earth at places where the right geological conditions occurred at the right times. Reservoirs are made up of porous and permeable rocks that can hold significant amounts...

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Natural gas imports and exports

The United States consumes more natural gas than it produces. While most of the natural gas consumed in the United States is produced domestically, imports from other countries are also an important source of supply. The United States is a "net importer" of natural gas, meaning that it imports more natural gas than it exports. Reliance...

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Where our natural gas comes from

Most of the Natural Gas Consumed in the United States Comes from Domestic Production U.S. natural gas production and consumption were nearly in balance through 1986. After that, consumption began to outpace production, and imports of natural gas rose to meet U.S. demand for the fuel. Production increased from 2006 through 2011, when it...

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Liquefied natural gas (LNG)

Liquefied natural gas (LNG) is natural gas that has been cooled to about -260°F for shipment and/or storage as a liquid. The volume of the liquid is about 600 times smaller than in its gaseous form. In this compact form, natural gas can be shipped in special tankers to receiving terminals in the United States and other importing countries....

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Natural gas pipelines

An intricate transportation system, made up of about 1.5 million miles of mainline and other pipelines, links production areas and natural gas markets. The U.S. natural gas transportation network delivered more than 24 trillion cubic feet of natural gas during 2010 to about 71 million customers. What Makes Up This Transportation Network? Transporting...

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Delivery and storage of natural gas

Natural Gas Is Often Stored Before It Is Delivered Natural gas is moved by pipelines from the producing fields to consumers. Because natural gas demand is greater in the winter, it is stored along the way in large underground storage systems, such as old oil and gas wells or caverns formed in old salt beds. The gas remains there until it...

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Formation and extrapolation of natural gas

How Was Natural Gas Formed? The main ingredient in natural gas is methane, a gas (or compound) composed of one carbon atom and four hydrogen atoms. Millions of years ago, the remains of plants and animals (diatoms) decayed and built up in thick layers. This decayed matter from plants and animals is called organic material — it was once...

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Anatomy of natural gas market in United States

Note: This article is extracted from the book: Book name, Author, Publisher, Year. The United States natural gas market can be divided into following sub-regions: Western Gas Region Electrical generators through out this entire region depend on natural gas as a primary fuel. In summers it is very hot, and natural gas is especially...

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Overview of natural gas market

The natural gas market is one of the largest, most established energy markets. Natural gas plays a central role in the energy industry Cleaner burning than coal, less expensive than petroleum, limited carbon emissions, operational flexibility and efficiency. Almost all of fossil-fuel-based power plants built in USA since 1990 can burn natural gas ==> strong link between power and natural gas prices. It is prohibitively...

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