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September 27th, 2012:

Are We Headed To $8 Natural Gas?

American Energy Coalition - September 27th, 2012 contributor Richard Finger is looking through the current hype about low natural gas prices and is seeing something alarming: a likelihood that prices will more than double in the near future. 

In his recent article, Finger sifts through the public data kept by the U.S. Energy Information Administration and detects a confluence of events that he believes will trigger a massive price increase. 

Fingers cites declining rates of natural gas going into storage as an indication that supply may not be keeping up with demand. He notes concerns that natural gas wells may be less productive long term than first believed, along with the decline in the natural gas rigs count driven down by the low market price for gas. On the demand side, electric power generation and transportation are consuming more natural gas, a trend that is likely to continue as fortune 500 companies like Fed Ex and UPS begin transitioning to natural gas to power their trucks. 

Price increases caused by supply shortages will become even more likely as electric power producers become more dependent on natural gas, which is now the fuel of choice for 32 percent of the power generated in the U.S. Most new power plants coming online in the U.S. are fired by natural gas.

To read more about this story and a link to the original Forbes article, visit the AEC website; and while there, please consider becoming an AEC Member Contributor by clicking on the "Make A Donation" button to make a secure online contribution to help support AEC and our important work in support of the Oilheat Industry.

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