Saturday, January 21, 2012

Nat Gas: A Foundational Fuel for the Economy With A Surplus That Will Keep Prices Low for Years

Charlotte Observer -- "Craig Schwartz's heating bill tells the story of a natural gas industry upheaval that's rippling through North Carolina.  First, take a look at Schwartz's natural gas bill for December: $73.69. Then look at December 2010, just a year before. The Raleigh computer scientist paid nearly twice as much: $134.14. Now spread those numbers out over several months, and quite likely years. 

"That's huge," Schwartz said. "I'll take $200 to $300 bucks a year in natural gas savings, no problem."

It's a familiar scenario for the 35 percent of state households that heat and cook with natural gas. Natural gas prices have been in a freefall as electricity prices are pushing upward, prompting some residents to make retrofits so they can switch to natural gas to heat their homes this winter. The state's two biggest natural gas utilities - Piedmont Natural Gas and PSNC Energy - are both planning rate cuts next month in response to the falling global price of natural gas.

Historically low natural gas prices, resulting from a glut in global reserves, have caused home heating bills to plummet to levels not seen in a decade. Experts anticipate the prices dropping further before they self-correct, with expectations that a long-term surplus could keep prices cheap for years.

"Natural gas is a foundational fuel for the economy. It's plentiful. It's here. And it's cheap," said Thomas Skains, CEO of Charlotte-based Piedmont Natural Gas."

Read more here: http://www.charlotteobserver.com/2012/01/21/2944639/falling-prices-fuel-natural-gas.html#storylink=cpy

Read more here: http://www.charlotteobserver.com/2012/01/21/2944639/falling-prices-fuel-natural-gas.html#storylink=cpy

8 Comments:

At 1/21/2012 9:38 AM, Blogger Rufus II said...

40% of the nat gas produced in Tx, and La is from wells less than One yr. old.

This is going to be a Monster "boom/Bust" Cycle.

They don't call Nat Gas the "Widowmaker" for nuthin.

 
At 1/21/2012 9:42 AM, Blogger Larry G said...

so... at least one group of folks is saying that the gas now being exploited by fracking is not deep reservoirs but instead ... the bottom of the barrel ... and we have a lot of barrels to "frack" but most are near empty and we're sucking up the last little bit (but just from a lot of different places)?

I tend to think the green weenies are all wet on this.

You'd think that if drilling in general contaminated ground water that oil drilling would do the same and as far as I know..it has not.

thoughts?

 
At 1/21/2012 10:32 AM, Blogger Hydra said...

This comment has been removed by the author.

 
At 1/21/2012 10:39 AM, Blogger Hydra said...

Oil drilling generally does not depend on pumping thousands of gallons of fracking fluid into the ground at high pressure.

Gas needs only a tiny fracture to flow through, compared to heavy gunky oil.

The tracking controversy is probably way overblown. There will be some issues that will be exploited by the freebies, all out of proportion.

 
At 1/21/2012 11:30 AM, Blogger Rufus II said...

Fracking is safe. It's just that it is a last-ditch effort to wring the last few drops out of very hard rock via very expensive wells.

It's going to break a lot of naive, little hearts before it's through.

 
At 1/21/2012 1:03 PM, Blogger Benjamin said...

Rufus--

People are getting better at fracking all the time, and "super-fracking" is on the way, and labor costs in other countries are less than ours.

My guess is we have natural gas up our global rear ends to the moon for generations.

Natural gas can be converted to CNG or methanol, or LPG, and works fine.

The Peak Oil Doomsters just do not understand the price signal and man's innovative nature.

 
At 1/22/2012 12:09 AM, Blogger OBloodyHell said...

>>> It's going to break a lot of naive, little hearts before it's through.

Yeah, Rufus. Yours will be the first.


"Peak Oil" my ass. No, that's not a suggestion.

:-D

 
At 1/22/2012 12:08 PM, Blogger VangelV said...

People are getting better at fracking all the time, and "super-fracking" is on the way, and labor costs in other countries are less than ours.

One the way? The shale producers need $7.50 to break even. They can't wait another five years for the promise of cheaper fracking. And you and others are missing the point. All 'super-fracking' is likely to do is get the limited amount of shale gas out of the ground faster. It will not create any more gas and can do nothing about the fact that shale formations have very low energy densities.

What matters are the cash flows and actual profits not stories about how things will improve some time in the future.

 

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