Marcellus/Utica natural gas production volumes this past Saturday (November 4) set a record high of more than 23 Bcf/d, according to pipeline flow data. As a result, overall Northeast production flows on the same day also posted a milestone, with volumes approaching a record 25.3 Bcf/d. This is up ~2.7 Bcf/d from where they started the year. These gains have been made possible because of the numerous pipeline projects that have added takeaway capacity from the region, about 2.4 Bcf/d since last winter alone. Moreover, another ~4.3 Bcf/d in new takeaway capacity either was approved for in-service last week or is expected online before March 2018. Even at partial utilization through the winter, that’s a lot of capacity that could flood the market with new supply. Where is all that capacity headed? In today’s blog, we look at recent and upcoming capacity additions that will affect the gas market this winter season.
At this time last winter, Northeast gas production had just recovered from its seasonal dip that happens in the fall “shoulder season” — the time of the year when summer cooling demand is waning and winter heating demand has yet to show up. After an initial bump in January and February 2016 to more than 20 Bcf/d, gas production flows from the region, based on pipeline flow data from our friends at Genscape, pulled back to around 19.7 Bcf/d and hung right around there for much of the year. Then, storage constraints and mild demand, along with maintenance-related pipeline outages, pushed volumes down to 19 Bcf/d in October 2016. By November, however, they had recovered to that February 2016 level just above 20 Bcf/d, and over the winter months, through March 2017, regional production grew by a little more than 500 MMcf/d to about 20.8 Bcf/d. That compares to a 2.0-Bcf/d uptick in production during the winter of 2015-16 and more than 1.0 Bcf/d the year before that in the winter of 2014-15.
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That’s because, as we’ve detailed in previous blogs on the topic, Northeast producers have been constrained by a lack of sufficient takeaway capacity. Thus, production growth has been paced by the addition of new capacity. Besides the mild weather, another reason for the tepid growth rate last winter was that not much takeaway capacity was added to enable more production, especially compared to prior years. The primary capacity that was added was the final 800-MMcf/d of Tallgrass Energy’s project to enable westbound flows from Ohio on its Rockies Express Pipeline (REX — see It’s Been a Long Time Comin’), with 450 MMcf/d of that coming online in early December 2016 and the remaining 350 MMcf/d in early January 2017. And while that new capacity filled up in good time, some of that initially was supply that was rerouted from other takeaway pipelines to REX, meaning while REX flows increased, overall Northeast production volumes didn’t increase one-to-one with those flows.
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About the song
“Build Me Up Buttercup” was written by Mike d’Abo and Tony Macaulay and appears as the first song on side two of The Foundations’ studio album of the same name. Songwriter d’Abo was the lead singer for Manfred Mann when they had a hit record with Bob Dylan’s song, “The Mighty Quinn.” Songwriter Tony Macaulay was the record producer for The Foundations. Released as a single in December 1968, the song went to #3 on the Billboard Hot 100 Singles chart and has been certified Gold by the Recording Industry Association of America. In 1969 the song was covered by an Australian pop group called The Valentines, which featured two lead singers. One of those singers, Bon Scott, would later become the lead singer for another band from down under named AC/DC. It was also covered by David Johansen on his 1982 album, Live It Up, and appeared in ads for the 1995 film Mallrats, featuring Jay and Silent Bob. Personnel on The Foundations record were: Colin Young (vocals), Alan Warner (lead guitar), Peter Macbeth (bass), Tony Gomez (keyboards), Tim Harris (drums, percussion), Mike Elliot (tenor saxophone), Eric Allendale (trombone), and Mike d'Abo (piano).
The album, Build Me Up Buttercup, was released in the U.S. on Uni Records in March 1968. Produced by Tony Macaulay, it went to #92 on the Billboard 200 Albums chart. The album contained the title song and two of the group’s earlier hit singles, “Back On My Feet Again” and “Any Old Time (You’re Lonely and Sad).” Three singles were released from the LP.
The Foundations were a British soul band formed in London in 1966. They were the first British multi-racial band to have a #1 record in the UK in the 1960s. Fifteen members passed through the group until its breakup in 1970. They released four studio albums in the U.S. and 14 singles.
