The cost of natural gas reached another record high Thursday, rising 9.6 cents or 0.7 percent to close at $14.196 per million Btu.Posted on 09/29/2005 2:21:42 PM PDT by M. Espinola
The cost of natural gas reached another record high Thursday, rising 9.6 cents or 0.7 percent to close at $14.196 per million Btu.
Traders bid up the commodity on the New York Mercantile Exchange after the U.S. Energy Department reported natural gas inventories had grown less than expected and the pace of production recovery in the Gulf of Mexico slowed.
Crude oil rose 44 cents to settle at $66.79 per barrel.
Gasoline for October delivery dropped 3.4 percent to close at $2.2516 a gallon, and October heating oil fell 0.8 percent to close at $2.1247 a gallon.
The Energy Department said the nation's store of natural gas was up last week by 53 billion cubic feet over the previous week despite production closures caused by Hurricane Rita.
Some economists had expected as much, but a number of commodity traders saw the increase as inadequate and, thus, a reason to bid up the price.
Total U.S. supply of natural gas was reported to be within its recent historical range for this time of year, the Energy Department said.
graphics added
Oil pipelines need to be heated to keep the oil flowing (which wildlife like in winter). Natural gas does not need to be heated.
I am old enough to remember that natural gas was 10 cents a threm. That drove just about everyone within distance of a NG pipeline away from oil and coal. Guess what, I am swicthing to coal just as you predict.
Thank you for your input from the inside of the industry. Very valid points. In terms of people residing in in large high rises we are stuck unlike people in suburbia which could switch to maybe a wood burning system, coal or propane.
Do you feel coal, propane and even wood prices will elevate in price similar to when so many homeowners made the switch in the Northeast from home heating oil to natural gas and eventually the prices more or less evened out.
Another question. How soon after natural gas prices take a major upswing, do you guys raise your prices since your paying more at the wholesale level?
Do you know if there are any new models of natural burners which would heat as well, but consume less?
Maybe, just maybe this upcoming winter will not be a rough one.
Natural Gas Prices Set Record, Pointing to Costly Winter
Just what we need to hear ..............
"Long-range Weather Forecast Atlantic Corridor Annual Weather Summary November 2005 to October 2006 from the the Old Farmer's Almanac
"Winter-season temperatures will be one degree below normal, on average, with above-normal precipitation in most of the region."
"Snowfall will be much greater than normal just about everywhere. The biggest snowfalls will be in early December and the second half of January, with other snowy periods in late December and early February. Temperatures will be relatively mild in November, the first half of January, and February, but colder than normal in December and exceptionally cold in the second half of January."
"April and May will be cooler than normal, on average, although there will be warm temperatures in mid-April and early and late May. Rainfall will be above normal."
Just ducky! $20.000 Btu NG prices by February?
"Once everyone is getting heating bills for $300 or more a month, people might finally get angry. The natural gas issue is serious. I mean, even the middle class will have a tough time floating the kind of bills we are about ready to get." Exactly and if people get angry it will lead to changes that bring on more supply. Environmental regulations and other such gov restrictions kill both innovation and efficiency. I'm not saying that the system is all bad, but there is a lot of ridiculous shit that can be done away with.
Yup. I'll leave my gas heat set at around 65 and use space heaters to take up the slack. Our electric utility just cut a deal with the state to freeze rates for two years.
My gas company adjusts the prices to market prices at the close of the current contract. Ie, 1.50 close in October is reflected in the November billing. A 40% increase on top of that is their operating margin, regardless.
To the chagrin of many, my self included (hey, I use this stuff, too), higher prices will be needed to make that development attractive. We deplete proven reserves of Natural Gas at about 7% per year, and if enough drilling is not done to replace that, our supplies will be inadequate--it is just a matter of time.
Natural gas suffered the triple whammy of Enron, environmental action against Coalbed Methane projects, and the price collapse of the late '90s, where new drilling fell behind the consumption curve.
A lot of gas is found with (dissolved in) oil, and that simply did not get found when drilling either slowed to a crawl, or stopped completely.
Converting all those power plants to burtn Natural Gas instead of coal or oil has also put the pinch on supplies, so, once again the enviroweenies get credit.
Coal, is the way to go..
Natural gas is used to fuel an awful lot of power plants, I would expect electricity rates to go up, too.
If things get bad enough they will be repealed. Just a few weeks ago Bush temporarily lifted restrictions on refining standards. Also Bush waived laws blocking foreign vessels to run inner state routes in order to transport fuel. While I hate it, hardship can sometimes be a blessing in the long run.
I'm shopping for a few cords of wood as we speak. I got a couple of word burning fireplaces that can put out some serious heat when you get a good bed of coals going.
The art of fire building is lost on the instant on, gas fireplace set.
I will say though; when the power goes out; my gas water heater still allows me to take a HOT shower.
Ahhhh.....
As far as the North Slope natural gas is concerned, there is enough, proven, to fill their 52-54" pipeline for fifty years. They have something like 25 trillion cubic feet, but claim to need 50 trillion to make the pipeline worthwhile. I think that estimate was made when natural gas was below $10, probably $5-6. Most of the gas would head toward Chicago in the most likely plans. Some would be used locally, Fairbanks and villages along the route.
If some industry is built in Fairbanks, though, copper smelting for example, more of the gas could be used here.
I expect the cost of heat to exceed my mortgage payments this year, about 2 1/2 times what it cost last year. If it only doubles, I'll be able to relax.
(Yes, we are finding any weak spots in the insulation and remediating them--older home). Otherwise, my day rate is going up.
I wonder if those rented storage facilities would mind if a ton of coal was stored for a month or so? The next problem for me would be burning it too. lol
We'll just put it in one end of the pipeline and the other end is in the general direction of the midwest. I suppose it will connect to other pipelines rather than emerge into the open air. 1-3 billion cu ft a day if my numbers are anywhere near right. I have no idea if that is a lot of gas.
Excellent and concise summary of the problem.
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.