Today’s energy news covers 3 major areas of interest: first, an update on the Hess Energy Marketing sale; second, a quick update on the near-term natural gas outlook as reported by Bloomberg; and, finally, Peter Kelly-Detwiler‘s article this week in Forbes titled “Machine To Machine Connections – The Internet Of Things – And Energy“.
Hess Energy Marketing sold to Direct Energy
Hess announced recently that they had entered into an agreement with Direct Energy to sell their Energy Marketing business to Direct. The companies still have to overcome some basic regulatory hurdles prior to effectuating the transaction. The deal is expected to close in the fourth quarter of 2013.
Both businesses are retail veterans and have been involved in the retail business for years.
Bottomline for businesses: Our customers and subscribers have asked us about the implications of this sale. Hess operational personnel are emphatic that nothing will change. This is rarely ever the case in an acquisition. The best thing you can do, as a Hess customer, is make sure that you know your relationship manager and understand how relationships may change or evolve through the transition. Also, make sure you get a good range of vetted suppliers for your next round of bids so that you can understand all your options post-acquisition.
Natural Gas- Near-Term Outlook
Bloomberg has just reported that natural gas prices have dropped to a 5-month low. In an article titled “Natural Gas Drops to Five-Month Low on U.S. Inventory Outlook” the news service reports that a recent weather forecast that predicts cooler than normal temperatures through the 23rd of August has helped to send natural gas prices tumbling. Cool weather in addition to high inventories has contributed to the drop in prices.
According to the article:
Lower-48 state natural gas output was little changed in May as new wells began operating in the Northeast’s Marcellus shale formation while Wyoming production declined during scheduled maintenance, government data showed.
Gross gas production in the contiguous states totaled 73.37 billion cubic feet a day, compared with a revised 73.38 billion in April, the EIA’s monthly EIA-914 report showed July 31.
The U.S. met 87 percent of its own energy needs in the first four months of 2013, on pace to be the highest annual rate since 1985, according to EIA data.
Bottomline for businesses: Forward markets favor customers– keep an eye on natural gas and electricity prices. Be active. Look at forwards and don’t be afraid to act. Contact us if you want to know what these prices mean to you in dollars and cents.
Machine-to-Machine Connections- the Internet of Things and Energy
Take a look at Peter Kelly-Detwiler’s recent piece in Forbes (see title, above) about the progress and development of Machine-to-Machine connections, also known as “The Internet of Things”.
The article is a helpful primer on how Machine-to-Machine connections may impact both power generation and consumption, and uses an example from 3 companies that are currently working together in this area. Kelly-Detwiler explains where we are in the development of the technology and delivery of a so-called “smart grid”. To simplify– the article helps to explain recent developments in the pursuit of a truly “smart” and price responsive grid– in which machines are connected and, in turn, respond to current or near-real time market signals.
Bottomline for businesses: There are interesting developments in Machine-to-Machine-to-Market technologies and “The Internet of Things”, but there is still a long way to go. It is worth keeping an eye on developments, but don’t alter your business practices to accommodate them yet.