New England Burns Jet Fuel To Keep Lights On 230
First time accepted submitter inqrorken writes "During the recent cold snap, New England utilities turned to an unconventional fuel: jet fuel. Due to high demand for heating, natural gas supplies dropped and prices skyrocketed to $140/mmBtu and prompting the Mid-Atlantic RTO to call on demand response in the region. With 50% of installed generation capacity natural-gas fired, one utility took the step of running its jet fuel-based turbines for a record 15 hours."
Jet Fuel? (Score:5, Insightful)
You mean, Kerosene? I guess Jet Fuel sounds cooler though.
Re:Invisible Hand (Score:5, Insightful)
Why didn't the generators use the derivatives market to hedge against spikes in gas prices so they'd be able to keep buying as demand/price rose?
Well, they might very well have had hedges to allow them to buy at normal prices, but then they're left with a choice - take that super-expensive gas that they can buy and burn it, or turn around and sell it to somebody else at market price and burn something else. If they can get more selling the gas than it would take to fuel their generators with jet fuel, then they're going to sell the gas and buy jet fuel.
Just because they have the option to burn gas doesn't necessarily compel them to do so...
Re:Invisible Hand (Score:5, Insightful)
Surely, speculators didn't drive up the price of a commodity right before the storm hit?
Yes, it would have been much better for DEMAND to drive up prices right after the storm hit so that consumers would be unable to see the price rise coming and reduce their reliance on natural gas and suppliers would be unable to increase production to meet (and profit from) the increased demand (perhaps by rerouting from other areas which would not need the natural gas as desperately). Yes, that would be much better. ?s
Re:Importance in diversity of energy sources (Score:4, Insightful)
Re:Invisible Hand (Score:5, Insightful)
Not to mention that storing enough gas on site to run a generation facility is pretty much impossible and dangerous.
Even spec prices don't do you any good unless you have a direct pipeline to the source. Most places are on the large pipe network, and there is no way you can blindly pump gas in form your spec source and expect it to arrive ONLY at the those sites with spec contracts.
Its easier to just add a fuel surcharge to the end user's electric bill. Which is exactly what happens in most places.
New England you say? Well let me chime in! (Score:2, Insightful)
I live in Maine. Originally for the south midwest. VERY south midwest. That said, from what I've seen up here, in Maine, New Hampshire, Mass. there's so much waste in heating going on that with proper backing of several billion and a 10 year plan, I could double that money redoing select pre-40's buildings into modern energy efficient levels.
Where I live, its costing $400-500 a month right now in heating oil. That will likely go through March, somewhat into April. Getting on a yearly contract for heating oil, is the preferred method, since you're locked into a per gallon price. I won't be hear that long, so not happening. Not complaining, just my situation.... So, it's month to month on oil, or whever we need it. There is natural gas here, which the stove runs off of. That's it though. That's the ONLY use for natural gas where I live. In the south, nat. gas is used for stove, and water. Yes! My hot water runs off fuel oil! Absolutely absurd! Looking around, it would be VERY trivial to throw in a nat. gas water heater and integrate the piping for hot water if you wanted to switch between the two.
Let's forgoe that idea for a moment though. Let's look at inline electric water heaters. Energy efficient, on demand. VERY good idea, IMO. This building is from the 20s or 30s. Updated to modern standards? Yea right. The wiring looks to date back to some time between the 40s to 50's. Possibly earlier. There are 5 circuits for the 3 bedroom 1200ft apartment where I live. Only 1 outlet is grounded in the entire apartment, and that's for the regrigerator. So, can we put an inline water heater in? NOPE! No GFCI plugs anywhere. Fixing the hot water, requires fixing the electric.
It isn't even about keeping the lights on where I am though. It's ALL about heating. In my apartment, there's MAYBE 1 or 2 lights on at any given time. Seldom more than that ever. The main power draw is 3-4 computers, and a refrigerator. That's it.
Heating is all non-electric here. And that's the problem! They gone from heating using, or not using in my case, electric from fuel oil. Did they bother to redo any insulation? HIGHLY doubtful. Where I live, the majority of people rent. The property owners? Some blue collar worker looking to make a few dollars on a 2nd building. Upgrades? This apartment was lucky enough to get double paned windows this past winter. Wow. That must have been a hellacious oil bill before they got put in.
The real problem here, is you have all these old buildings from that early 20th, that haven't been looked at from an energy footprint standpoint. Millions of buildings! Here's the kicker. They'll likely be used for at least another 30 years. Probably longer. What are the odds that someones going to do a cost benefit in modernizing their 2nd house, when it would put them further in debt for the remainder of their lives. They won't. What does it say about the US in general, when you have millions of very energy efficient homes, and no one doing cost benefit and offering up incentives? Well, if they are offering up incentives, I sure haven't seen or heard anything about it.
Here's the choice as I see it: Either you improve a whole bunch of homes that are sorely out of date from a modern energy efficiency position, and evaluate fuel oil vs. electrical for heating and hot water needs in New England, or you do nothing. In the event you do nothing, more and more of your money overall, goes to oil and the coal plants, that could have gone to updating infrastructure that would otherwise continue to be stagnant. My bet? No change. People apparently don't like change and improving things in this country. I do, and I tell as many people about it as possible. Why? Cause why not? No one else seems to want to discuss it.
[OT] mmBtu? (Score:5, Insightful)
Due to high demand for heating, natural gas supplies dropped and prices skyrocketed to $140/mmBtu
Off-topic question: Do these people actually invent new units of energy for each application?
Wikipedia [wikipedia.org]
A BTU is the amount of heat required to raise the temperature of 1 pound (0.454 kg) of liquid water by 1 F (0.56 C) at a constant pressure of one atmosphere.[1] As with calorie, several BTU definitions exist, which are based on different water temperatures and therefore vary by up to 0.5%.
The unit MBtu or mBtu was defined as one thousand BTU, presumably from the Roman numeral system where "M" or "m" stands for one thousand (1,000). This is easily confused with the SI mega (M) prefix, which multiplies by a factor of one million (1,000,000). To avoid confusion many companies and engineers use MMBtu or mmBtu to represent one million BTU.
Somebody must have thought really long and hard to come up with that stuff.
Re:Invisible Hand (Score:5, Insightful)
This ain't any "Econ 101" "supply & demand" thing. There's plenty of natural gas around to the extent that it just get wasted:
http://www.theglobeandmail.com... [theglobeandmail.com]
Natural gas? Cheap and abundant.
Natural gas in pipelines flowing to New England power plants? Not so much.
If you don't understand how that would make a difference, it's likely you never took this Econ 101 you speak of. (That, or perhaps you think pipelines work by magic, and any mass flow rate through any size pipe is feasible from both engineering and economic perspectives? To put it in Ted Stevens-like terms, pipelines are like the internet, not like a truck.)
Not to say the natural gas market in New England is, or bears particularly close resemblance to, the elegant, efficient resource-allocation method modeled and taught in Econ 101, but your attempt to use the practice of gas flaring as evidence that there wasn't a genuine scarcity of usable natural gas in a certain place and time discredits you by revealing a serious failure in competence and/or honesty. (I wouldn't claim to know which.)