Last year served as something of a bellwether for what’s to come for the Northeast gas market in the long term: increasing takeaway pipeline constraints and weakening gas price differentials by mid-decade. The region’s outflows surged to record highs in the fall of 2020 as production also reached fresh highs. Just a couple weeks ago, the region notched another milestone on the pipeline constraint yardstick: record outflows on some pipes and near-full utilization of southbound routes on the coldest days of winter — something we don’t normally see, as gas supply requirements in the Northeast peak with heating demand and less gas is available to flow out of the region. This time, the surge in outflows and the resulting constraints were driven more by spiking demand and gas prices downstream than by oversupply conditions at home, but the result was the same: the Northeast had by far the lowest prices in the country. This happened even as other regions recorded triple-digit, all-time high prices. Today, we examine how Appalachia outflows and takeaway capacity utilization shaped up during Winter Storm Uri.
Headed for Heartbreak, Part 3 – Ample Supply, Outflow Constraint Kept Lid on Northeast Gas Prices in February
