Re: Ontario StorageRe: Ontario storage During the last few years storage in Ontario was not fully topped up. There were several reasons for this: an abundance of nat-gas, low prices, high shipping costs and perhaps most importantly, a lethargy to refill due to the uncertainty of favorable price spreads that removed the incentive. It costs money to store and if the profit motive is not there they won’t do it. Don’t think this industry wasn’t turned on its head with the advent of shale gas. It’s changed everything including the way they look at storage. Winter 2013-14 changed all that. This year TransCanada wants to allocate a portion of its pipeline to oil. Their argument is that nat-gas shipping volumes have dwindled over the years and a portion of those pipes can be used for shipping crude east. They face opposition from end users who fear it may create nat-gas shortages in Eastern Canada. I think TransCanada made a special point to top up Dawn et al. this year to neutralize the opposition to its planned changes just as the high shipping charges in the previous years played into their hands in the lead up to these negotiations. (chronic underfill) This may explain why storage is 100% filled in Ontario even though Alberta storage is roughly 100Bcf behind last year. I don’t know how much Cdn gas went through Emerson en route to Dawn to support my argument or just how much came from the Marcellus. It probably was a bit of both. I’m not unaware that production is surging in the lower 48 but I think it is better managed now than it was in 2011-2012. Take a look at the rig count. The glut is mostly from “associated gas” coming from oil and NGL’s drilling. In a way, it seems like a waste of precious energy, (ethane selling at a discount to methane) but just maybe it has to be viewed in the context of a process and simply getting to the next step. But in the meantime the combined cycle gas plants will suck up any possible over production if it occurs this winter just as they did in 2011-2012. The nat-gas price is more than just competitive with coal. As far as the price of crude goes, I didn’t need Goldman to tell me that the Saudis will not cut production to stabilize the price as in other years. Why should they take the fall for the rest of the global oil producers? But don’t you think the deliberate heavy shipment of Saudi crude into world markets and against falling prices isn’t a nice preamble to the upcoming OPEC summit in November? Would one not think that the intended result would be to force some restraint on members and non-members alike? Let’s reserve judgement on $70.00 crude until after that meeting.