Monday, October 14, 2013

Natural gas may cost you 10% more this year

Our gas utility said today gas prices will be higher for us this year, 10%, maybe 12.  After the last 5 years of drilling at the highest pace since rig counting begun, drilling is falling off, some of the fracking drillers have cash flow problems.  Turns out maybe their costs are higher and their retrievable reserve lower than these Texans and Okies said.  Market experts say a good number of wells drilled will poop out in 1 to 5 years, not 20 as first claimed.  Some are already tapering off.  So, after years of this drilling madness, we currently have less gas in underground storage than last year, production is down, demand is up as winter nears. 

Higher prices will hurt some consumers but should stimulate conservation, innovation, and make solar and wind more attractive, truck and bus conversion somewhat less attractive.  Liquified Natural Gas exports may slow (this and increase in use at power plants is driving up demand more than 3%).  With LNG exports expanding natural gas prices will soon be like oil and gold, set on world markets, all the local drilling we can do will have little impact when each of us compete with other nations for our share.  

1 comment:

  1. I read an article last week claiming that the US was poised to become the leading producer of natural gas in 2014. But that won't benefit US consumers when producers can sell at greater profit off shore. All they get is the resultant messes to clean up which will fall to the government at which point those same folks getting screwed will bitch about their tax bills, unless of course they live in affected areas. Then the government can be blamed for not doing enough.


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