California sending more gas to Mexico as it warns of shortages

Bloomberg

California is warning of natural gas shortages and potential blackouts this summer after a historic leak near Los Angeles. Meanwhile, it’s sending increasing volumes of the power-plant fuel to Mexico.
Deliveries to the North Baja pipeline system in Mexico from California jumped 45 percent to 441 million cubic feet compared with two weeks ago, according to data compiled by Bloomberg New Energy Finance. They’re 6 percent higher than year-earlier levels, the data show.
The gas flowing through California and into Mexico underscores how an unprecedented leak at a gas storage complex near Los Angeles is limiting the state’s ability to build up the supplies it’ll need when this summer’s heat has air conditioners blasting and power demand surging. The region’s electricity grid manager plead with consumers just last week to conserve power as a heat wave swept across Southern California. The high temperatures caused wholesale power and gas prices to surge.
“Gas doesn’t necessarily flow where the better price is,” said Jacob Fericy, a Bloomberg New Energy Finance analyst. “Storage is pretty full, so in terms of the California system, they may only be able to take what they need on a daily basis, so there is no guarantee that gas will even be able to flow to California.”

Storage Constraint
The ability to store excess gas in Southern California is constrained after a nearly four-month natural gas leak at Sempra Energy’s Aliso Canyon facility took the field offline. It was the biggest such leak in U.S. history, according to the National Oceanic and Atmospheric Administration and the University of California at Davis.
With Aliso Canyon crippled, California officials have said the state could face short-term blackouts on as many as 14 days this summer as power plants could run out of the fuel during high demand periods. The California Public Utilities Commission said that it had ordered Sempra’s Southern California Gas utility to find a way to increase the withdrawal capacity at Aliso Canyon in order to avoid the risk of curtailments to power generators.
As for Mexico, the country is seeing higher demand for gas as power plants burn more of the fuel instead of oil, said Fericy. “There is more power generation demand than there was last year,” he said.