NYSE: WMB Archive
Are U.S. Nuclear Power Plants Going the Way of Coal Plants?
by David Fessler, Investment U Senior Analyst
Tuesday, January 29, 2013: Issue #1958
Last October, Dominion Resources, Inc. (NYSE: D) announced it would be closing its Kewaunee nuclear power plant. Located in Wisconsin, this small, 566-megawatt (MW) unit is the first nuclear plant to succumb to cheap natural gas.
The boom in U.S. shale gas production has natural gas prices at 10-year lows. It’s thrown an interesting curve at the domestic power market. Many utilities are retiring old coal plants in favor of natural gas. Are nuclear plants right behind?
We’ll analyze where the industry is today and where it’s going. First, let’s take a look at coal plants versus natural gas-fired ones.
Many coal-fired power plants in the United States are being retired, in some cases long before the end of their useful lives. How many of the 1,169 currently operating in the United States are on the hit list?
A report from the Union of Concerned Scientists entitled “Ripe for Retirement” identifies 353 of them. Check out the map below.
These plants total 59 gigawatts (GW) of generating capacity. That’s about 18% of the total coal-fired plants in the United States, and 6% of the nation’s total power generation capacity. Most of the plants on the list are older, less efficient and no longer economically viable.
The real problem is that these plants are big polluters. They’d be too expensive to upgrade to meet the latest Environmental Protection Agency’s (EPA) emissions guidelines.
To continue reading, please click here...How to Profit from LNG No Matter What the U.S. Does
by Matthew Carr, Investment U Research
Friday, April 6, 2012: Issue #1746
There’s a great, strange story by F. Scott Fitzgerald called, The Diamond as Big as the Ritz. In it, the Washington family has discovered a mountain that’s made entirely of diamond in an uncharted part of Montana. It’s just one giant, mountain-sized chunk.
The tale deals with greed and the basics of the law of supply.
But the Washingtons can’t let anyone know their diamond mountain exists… If people found out, it’d collapse the diamond market, making the precious stone worthless. And the Washingtons themselves would be cast into poverty.
So, it’s this strange dual existence for the Washingtons. They’re the wealthiest family in the world, but only because they vigilantly and brutally control the diamonds that flow from their mountain. They never let on there’s an oversupply.
Since 2007, the United States has undergone a series of dramatic changes. We fell into the dark days of a recession. These shadows still linger. Banks collapsed. The housing market collapsed. Jobs were lost in the millions.
We’ve scratched and clawed our way back. Though we’re not fully recovered yet.
But in those years, we also discovered that we had something we didn’t know was there. Old drilling techniques applied to new areas resulted in a staggering increase of precious resources – natural gas and oil. We found our own diamond mountain.
All of a sudden, it was a new day. We no longer needed to rely as heavily on foreign sources for oil and we had more natural gas then we knew what to do with. The billions spent on terminals to import liquefied natural gas (LNG) from overseas – once again – were obsolete overnight.
To continue reading, please click here...Little-Known Phenomenon Could Send Natural Gas Prices Skyrocketing
by David Fessler, Investment U Senior Analyst
Friday, October 21, 2011
Every summer and fall, oil and gas drillers, producers and traders have one eye on what they’re doing and the other one on something even more important: the weather.
They all know a major hurricane that tracks up through the Gulf of Mexico could have devastating effects on their operations.
And they have have plenty of reason to worry. Take a look at the graph below produced from data from the National Hurricane Center. It shows the tracks of all the hurricanes that formed between 1851 and 2005.
Plenty of them traversed the Gulf of Mexico, now a major offshore production region for oil and natural gas.
The most devastating of those were Hurricane Andrew in 1992, Katrina in 2005 and Ike in 2008. Together, they caused an estimated $137.1 billion in damages. A lot of that damage was to oil and natural gas infrastructure.
Hurricanes normally cause oil and natural gas production to be suspended until the weather system blows through. As a result, they all had an effect on the price of natural gas and oil, regardless of the amount actual damage
Higher Natural Gas Prices Coming? Depends on the Weather This Winter…
With the advent of more and more natural gas coming from onshore wells, the risks have shifted from summer hurricanes to winter chill. Let me explain.
To continue reading, please click here...The Best Way to Play the Spike in Home Heating Costs…
by David Fessler, Investment U Senior Analyst
Tuesday, October 18, 2011
I was up at my hunting and fishing club this weekend enjoying the fall colors. They were at their peak in the Pocono Mountains here in Northeast Pennsylvania.
It was cold enough that the furnace kicked on at night. All three of our buildings are heated with oil. We just topped off our tanks. If you live in the Northeast, you might want to do the same. I’ll get to that in a moment.
Regular readers know I write a lot about factors that will continue to keep an upward bias on the demand for natural gas. Utilities switching old power plants over and building new ones to run on it are a big factor. The increasing use of natural gas as a source of transportation fuel will be, too.
But home heating isn’t something I’ve addressed thus far. However, recent statistics published by the Energy Information Administration point to a big swing away from heating oil towards natural gas.
About 5.7 million households in the Northeast United States use heating oil to keep warm in the winter. Seven years ago, that number was 6.9 million. That’s a decrease of 21 percent.
About half of those 1.2 million people switched to natural gas. Check out the graph below.
The peak of the oil-to-gas switch occurred three years ago, but the EIA is forecasting the changeover to begin rising again this coming winter as oil prices increase.
Why? Because heating oil prices are largely reflective of those for crude.
To continue reading, please click here...Residential Energy Consumption: Uncovering the Home Power Puzzle
by David Fessler, Investment U Senior Analyst
Friday, May 20, 2011
Like many investors, you’re probably amazed every quarter when Apple, Inc. (Nasdaq: AAPL) announces that it once again has severely trounced analyst expectations.
Its groundbreaking (and addictive) products get most of the credit. Every month it seems like it’s putting out a new product that revolutionizes the way we communicate and organize our daily lives. And as prices for Apple and other consumer electronics have plummeted, the use of these products has risen dramatically. The average U.S. household continues to use more and more consumer electronics every year. Sure… This is not exactly front-page news.
But buried on the back page, there’s a different story about our love for these little gizmos. It’s a story about the amount of power it takes to charge the gadgets plugged into our electric sockets… and how our total household consumption has changed and will change over time.
You’ll find a strange disconnect between the two… It’s quite puzzling at first…
Consumer Electronic Use is Booming
First, let’s take a look at home use of the traditional electronics from decades past. The chart below is from the Energy Information Administration’s 2009 Residential Energy Consumption Survey (RECS). You can clearly see households are continuing to increase purchases and use of televisions and computers.
In 2009, more than 50 million households (nearly 45 percent) in America had three or more televisions. That’s more than a 50 percent increase from 1997.
To continue reading, please click here...
