Natural Gas Economy Is Losing Steam

[peejay 327]

Since there are several energy related posts today...here is another. In the early to mid 1990's there was a huge glut of natural gas and it was going for 90 cents per Mcf at the well head. It is recently going for $7+ per Mcf and in the cold of winter was at $10+.

Natural Gas Economy Is Losing Steam

By JEFF DONN, Associated Press Writer

BOSTON - On the brink of the 21st century, a group of energy experts peered into the future of natural gas, and what they saw was quite rosy — and quite wrong.

To satisfy growing demand, producers could crank out a third more natural gas over the next decade at "competitive prices." It could "power our economy" for decades beyond. Or so said the National Petroleum Council in its 1999 report.

But natural gas prices soon headed skyward, with prices charged by producers spiking late last year at nearly five times 1999 levels. This past winter, though starting off warm, saw the average gas-heating household spend a record $867, a 17 percent increase, according to federal data. As for that predicted robust supply, the country's annual gas output has strangely slipped by 3 percent over the past six years.

Something is broken in the economics of natural gas, say people inside and outside the industry. The bright dream of an economy built squarely on clean-burning natural gas is slowly deflating. Although we still derive almost a quarter of the country's energy from natural gas, its share will slip in coming decades, federal forecasters now say.

"What's going on now is so dysfunctional, it is really remarkable," says industry consultant Jim Choukas-Bradley.

http://news.yahoo.com/s/ap/20060429/ap_on_...ing_natural_gas

I find this stuff interesting because I work in the energy industry...and have witnessed dead wrong predictions put forth by highly educated energy analyst experts so many times it is laughable. If they don't know what is going on...who the hell does? And if they don't know what is going on...how can they find a solution? We're screwed.

My house with natural gas furnace, water heater, stove, oven, and clothes dryer isn't so cheap anymore. I used to laugh at my friends with all electric houses. I still think gas is more efficient and cost effective, but I haven't put it to paper to prove it.

Maybe someone on VJ has the answer. Natural gas vs. all electric.

[Ban Hammer 13,475]

dunno. i'm on propane, which is not a bad deal as long as i do the prepay during the summer. but i suppose with all the speculation in oil, natural gas will just follow naturally (pardon the pun).

[w¡n9Nµ7 §£@¥€r 123]

That's a great article, peejay. The interesting stuff is in the middle so I suggest everyone click on the link and read it at the source.

[Ban Hammer 13,475]

another case of the rich get richer, the poor get poorer

[#@!!* 0]

I have to be honest. When I first saw the subject line, my first thought was "They must not have experienced the fiance after eating broccali."

[Hilarious Clinton 452]

Nuclear all the way.

[iceyspots 0]

dunno. i'm on propane, which is not a bad deal as long as i do the prepay during the summer. but i suppose with all the speculation in oil, natural gas will just follow naturally (pardon the pun).

Mah name is Hank Hill and I sell Propane and Propane Access'ries

[Ban Hammer 13,475]

dunno. i'm on propane, which is not a bad deal as long as i do the prepay during the summer. but i suppose with all the speculation in oil, natural gas will just follow naturally (pardon the pun).

Mah name is Hank Hill and I sell Propane and Propane Access'ries

i'm from texas and i won't even watch that

[peejay 327]

That's a great article, peejay. The interesting stuff is in the middle so I suggest everyone click on the link and read it at the source.

From what I got out of the article...since natural gas supply is mostly dependent on domestic production, the gas suppliers are manipulating the market by artificially creating a shortage? It could be plausible. Sounds like maybe our government should be looking at such shenanigans. Price fixing? Many, many companies would have to be involved and all on the same page. Conspiracy theories? Who knows?

I can well remember in the 1990's companies shutting in production rather than selling natural gas at cost or at a loss. There was a glut, but some companies were so strapped for cash that they sold at any price just to maintain any revenue stream (even if they took losses). That is the flip side of the coin.

I started working in a natural gas field offshore of Corpus Christi, TX in 1983. In those days it was a regulated market. There was old gas, new gas, take or pay, allocated production, etc. All that is gone in the deregulated, free market world we live in now. Is it better? It doesn't appear to be.

Who knows? I'm just a grunt that does the dirty work on these production facilities and don't know the big picture. I work in the industry and pay the same prices as everyone else.

Where is that 65 year supply of natural gas mentioned in the article? Somebody is holding out on us!

[Fuzzness 2]

seems like they are learning from their cousins the oil companies

[w¡n9Nµ7 §£@¥€r 123]

Where is that 65 year supply of natural gas mentioned in the article? Somebody is holding out on us!

I heard Chris Matthews on MSNBC (no expert on anything) wonder out loud if gas companies are hoarding gas supplies in the hopes that they will be able to charge even higher prices in the future once the Indian and Chinese economies are substantially bigger than they are now....

[Ban Hammer 13,475]

Where is that 65 year supply of natural gas mentioned in the article? Somebody is holding out on us!

I heard Chris Matthews on MSNBC (no expert on anything) wonder out loud if gas companies are hoarding gas supplies in the hopes that they will be able to charge even higher prices in the future once the Indian and Chinese economies are substantially bigger than they are now....

such would not surprise me one bit