Natural gas demand in California is unchanged this week as lower temperatures boost space heating needs, according to an Argus analysis, offsetting the economic effects of the coronavirus.
Gas use exceeded the burn of the state's two large distribution systems for the same period last year by 10pc to 34pc per day.
The state was the first to respond quickly to Covid-19 by issuing a stay at home order on 19 March, and higher burns on Pacific Gas & Electric and SoCal Gas are most likely due to lower-than-average temperatures since late March.
A cold wave expected to start today in the eastern two-thirds of the country could indicate how the pandemic cuts gas demand even when heating load kicks in one more time for the season.
The reduction in US natural gas demand because of Covid-19 has been masked by warm weather, high storage and low prices. Gas demand is more inelastic than US electricity demand.
California demand for the last two weeks was around 4.5 Bcf/d (127mn m³/d). The state is a summer peaking market, where usage can exceed 6 Bcf/d in the middle of the third quarter.
Bay area governments were more aggressive than southern California in getting citizens to comply with social distancing. That might be a minor factor in demand on PG&E rising 7pc this week, as overnight demand for heating compared to a low baseline will change weekly comparisons. SoCal Gas demand is off 5pc this week, with wide swings in daily usage.
New York City demand is down today, with scheduled flows at key distribution points off from last year by 12pc from Texas Eastern Transmission and 28pc from Transco.
Scheduled flows on Trunkline Gas in northern Indiana today are down 19pc from last year, even though temperatures are lower and both calendar dates correspond to working weekdays. But flows on Trunkline delivered to Ameren in Illinois are up by half.
Pipeline flows and spot prices can tell only part of the story, because buyers do not need more supply following a warm winter.
At the Transco Zone 4 hub in Mississippi, daily gas prices are down by a third and bid week indexes are off by 40pc compared to 2019. The widely traded hub is a good price indicator for gas flowing north and south.
While deliveries to some major distributors are down due to recent stay at home orders, temperatures were rising, negating gas use.
February gas consumption estimates by the US Energy Information Administration will not be available until the end of the month. The agency predicts consumption will fall through 2021.
Space heating load directs the gas market but power generation with gas has become increasingly important.
The power industry's swing to gas is fairly consistent in recent years, said Aubrey Hilliard, president of marketer Texican Natural Gas, and cooling degree days have begun in the southern US. A cooling degree day is when the average temperature for a measurement station is above 65°F (18.3°C) for the 24 hours.
Power generation gains because of low gas prices also offset some industrial gas load loss.
"There is not one auto assembly plant operating now, and the ancillary plants are shut down also," Hilliard said. "End-users do not know from week to week when they will shut down."
US factory activity fell in March.
