The price of natural gas is not uniform across the United States. Instead, the price is determined by supply, demand, proximity to production, regulatory environments and the cost of natural gas that is flowing in the local distribution system. More at Geology.com.
Good news for consumers but not so good for natural gas companies and lease owners – natural gas prices are dropping steadily in response to aggressive production and a slow economy. More at BusinessWeek.com.
During 2009, the economic downturn cut the use of natural gas by commercial and industry customers while the amount of gas used for electricity generation increased. Production levels continued to increase even though prices remained weak. See the review at the Energy Information Administration website.
“Natural gas will play a leading role in reducing greenhouse-gas emissions over the next several decades, largely by replacing older, inefficient coal plants with highly efficient combined-cycle gas generation. That’s the conclusion reached by a comprehensive study of the future of natural gas conducted by an MIT study group comprised of 30 MIT faculty members, researchers, and graduate students.” Quoted from the MIT press release.
An article on the Reuters website explains why many experts believe that there will be a natural gas glut for the next several years which could hold the energy-equivalent price of natural gas at a small fraction of the price of oil.
The Oil and Gas Journal reports on a 140-mile oil pipeline that originates in Karnes County, Texas and connects to the main system in Austin County.
Haliburton CEO, Dave Lesar, says that activity in the oil and gas shale plays is allowing his company to increase prices. However, he sees uncertainty in natural gas prices that could reduce the current increase in activity. More at NASDAQ.
Stevan Chu, U.S. Energy Secretary, says that new drilling methods may have doubled the natural gas reserves of the United States. More at Rigzone.
In the past natural gas has been viewed by some in the electric power industry as a fuel with an especially volatile price. A article on NASDAQ.com titled: US Power Companies May Be Forced to Embrace Shale-Gas Boom considers past and potential future use of natural gas in electricity generation.
Natural gas is used as both a fuel and a feedstock in the chemical industry. An article on BusinessInsider.com explores what a new abundance of gas might mean for the chemical industry.
Daniel Fisher, a senior editor at Forbes has a blog post titled: “A New World of Cheap Gas“. In the post he explores the impact of new gas production on contract rates, natural gas uses, the impact on renewable energy technology, government policy and more.
EIA Sees Higher Gas Prices in 2010
“EIA expects this year’s annual average natural gas Henry Hub spot price to be $5.17 per million Btu (MMBtu), a $1.22-per-MMBtu increase over the 2009 average. EIA projects price increases to continue in 2011, averaging $5.65 per MMBtu for the year. Projected working gas inventories end the first quarter of 2010 at about 1,550 billion cubic feet (Bcf) compared with 1,644 Bcf in the previous Outlook because of colder-than-normal weather in February. Natural-gas-weighted heating degree-days were nearly 11 percent above the 30-year norm last month.” Quoted from EIA Short-Term Energy Outlook EIA.
How Much Shale Gas at What Price?
Does the US have an unlimited supply of inexpensive natural gas from shale that will be quickly produced or will the resource be produced more slowly and sold for higher prices? An essay in the Financial Times explores this question.
Natural gas prices can vary significantly from one state to another. Supply, demand, delivery costs and regulatory environments can all have an impact on the price of natural gas. The prices shown below are residential rates from 2009 but you can download a diversity of current and historical prices at the Energy Information Administration website.
Industry experts believe that the amount of natural gas produced from shale will rise steadily in the United States. That increase will keep prices low and attract new customers to natural gas. More in an article on the Houston Chronicle website.
