By: Daniel Moore, Pittsburgh Post-Gazette
When it comes to guessing the weather, energy companies are throwing less caution to the wind.
Analysts and experts say energy companies are increasingly seeking out private firms to provide weather prediction models to inform their decision-making. The nation’s energy companies are among the major companies for the private sector meteorology industry, which could grow to $1.8 billion by 2020, according to a recent report from Dallas market research firm Markets and Markets.
“Weather has become now the primary driver for commodity prices in energy,” said Paul Corby, senior vice president of energy for Planalytics, a Berwyn, Pa.-based firm in its third decade of providing “business weather intelligence” tailored to clients’ market needs and the commodities they sell.
“It has an impact on storage, injection, withdrawals — weather’s the number one driver,” he said referring to the cycles of filling and removing natural gas from storage inventories and delivering it to homes and businesses.
Energy companies are the bulk of the companies seeking consultation. A survey published by American Meteorological Society in 2007 estimated about three-fourths of weather companies work with energy companies — the most-served industry out of 20 weather-driven sectors identified including the transportation, agriculture and insurance sectors.