Posted on 01/11/2012 5:23:25 AM PST by thackney
Increased production of natural gas has driven prices to their lowest in the last decade, with the average annual price dropping about 9 percent from 2010 to 20 11, according to the U.S. Energy Information Administration.
The average annual price of natural gas fell from $4.37 per million British thermal units in 2010 to $3.98 in 2011 — the lowest annual average since 2002 – a result of a mild winter and ramped up shale gas production in the Eagle Ford and Marcellus Shales, the EIA said.
Gas futures contracts fell from $4.65 at the beginning of the year to $2.99 on Dec. 30.
“All the weakness we have seen in price over the last four years is very clearly related to the increase in volumes of domestic gas,” said Bob Gillon, director of energy company research for IHS. Gillon noted that production has increased steadily since 2005,with nearly 8 percent growth in 2011.
Export demand for petroleum products helped keep an upward pressure on crude oil and petroleum products, both of which produced double-digit price growth in 2011. Crude oil rose about 15 percent and petroleum product prices rose about 10 percent, with crude oil prices at more than $100 per barrel by the end of the year.
Gillon believes it will be years before increases in natural gas production affect the price of oil in the United States.
“There just aren’t all that many easy substitutions you can make for refined oil products,” Gillon said. “There is not a big market and there won’t be for natural gas as a transportation tool.”
The EIA also reported a decline in electricity prices of more than 20 percent across the United States, with on-peak, day-ahead prices following the decline in the price of natural gas, a major generation fuel.
Funny how that works...
YAY! The HUGE increase in natural gas prices a few years ago killed my winter heating bill! Finally, more supply is available.
It’s too tough for Obama to figure out. He still has faith in Solyndra solar panels.
Not to worry; the EnviroNazi’s and the EPA will soon take care of this trend!
He knows it.
He's ignoring it.
All the new production is great. However, are there any new pipelines being built to bring gas to customers that are stuck paying for other fuels such as propane or heating oil ?
I’m kind of “betting the farm” on cheap NG.
All my new appliances/hvac are going to be gas,
and I’m installing a NG backup generator.
The natural gas grid is far more reliable and stable than the electric grid. Experts I have listened to have said that the system could easily go for over a year without any human intervention.
People like 0bama and his handlers aren’t stupid, they have an agenda wherein the “masses” will not have access to energy and the “elite” will use all they want to.
People are much easier to control under this system.
New Pipelines are being built, but it is difficult to justify the cost to build residential delivery pipelines through existing neighborhoods.
When a company spends the same money to build the same amount of pipe through an area being built for the first time, the will get nearly every, if not all, homes in that area.
When they build through an area where everybody already has an existing furnace on a different fuel, the conversion rate is rather slow.
It may be better for areas on propane service, it may be a rather minor conversion rather than a replacement like a fuel oil would be.
It happens, but it happens slowly.
Can you explain what you meant by that? I don't think I'm understanding you correctly.
“Without maintenance” might be a better way to put it.
The NG delivery grid is rock solid and doesn’t require constant tweaking to keep it supplying product to customers.
I rcently bought a grill, with the intent to convert it from propane to NG. So I paid $70 for a conversion kit at the same time.
The converion kit consisted of a wrench, and a set of instructions.
The instructions said “USE THE WRENCH TO REMOVE THE PROPANE INJECTOR NOZZLES - THE NG NOZZLES ARE PREINSTALLED UNDER THEM.”
It was the biggest ripoff I ever saw - but I LMAO.
Buy the way, the stupid plastic wrnech was worthless. I used a socket.
The compressor stations I’ve helped design, construct and commission that pressurize those systems are not likely going to be running if they go a year without maintenance. Many other components in the well to customer are going to be the same.
While I agree there is far less work in the NG delivery system, a year isn’t anywhere reasonable to expect. They have less exposure than an above ground electric distribution system, but you may not be aware of all the parts and pieces required for the complete system.
If you only compare the local distribution and not the total system needed to bring gas to your home, then you may be right.
Say, here’s another bit that I heard somewhere, perhaps you can verify or deny -
parts of the system are still running on WOODEN pipes.
Interesting. I knew burner nozzles were an issue in the change out, but I wouldn’t have expected them to be pre-installed underneath.
Natural gas tips will burn out using propane, if I remember correctly.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.