Bad News for the Natural Gas Suppliers, but Good News for Natural Gas Consumers

Michael Giberson

I’ve been meaning to remark on natural gas prices for several days, especially since a regular reader pointed out that natural gas prices have reached their lowest levels in a decade. But now, in what may be a first, I’ll just outsource the discussion by favorably linking to a post on the Climate Progress blog.

By the way, note that the prices shown in the post’s graphic (from EIA) are average prices over 2011. Current prices for natural gas are about $1 below what is shown there. (In January, typically peak demand time for natural gas!)

In the post Stephen Lacey worries about the effects of low natural gas prices on renewable power, and it is a problem if you want to roll out more renewable power capacity anytime soon, but for consumers it is a win-win. Low gas prices push down now on (non-transportation) energy prices, particularly power prices. The delay in new installations of renewable power means that, when natural gas prices recover in a few years, the power plants built will have better technology than exists today. Meanwhile, the subsidies avoided will have a very small but beneficial effect on the federal government budget.

And if your primary concern is greenhouse gas emissions, note that natural gas-fuels power plants will continue to displace coal-fired power even as the additions of renewable power plants are slowed.

5 thoughts on “Bad News for the Natural Gas Suppliers, but Good News for Natural Gas Consumers

  1. Partial repost of comment originally posted in response to: Giberson calls for one-year moratorium on hospital admissions pending analysis of risks associated with nosocomial infection
    January 11, 2012

    I would argue that the current concerns regarding hydraulic fracturing are more the result of concerns about the implications of the availability of large quantities of inexpensive natural gas for the future or renewable energy penetration in the US market than the result of the concerns currently being vocalized. (I freely acknowledge that this is a cynical position.)
    byEd Reid January 12, 2012 at 9:22 am

  2. Ed Reid wrote: “I freely acknowledge that this is a cynical position.”

    Ed: You cannot be too thin, too rich, or too cynical.

    My best guess is that there is an Arab with a bag full of money back there pulling the strings.

  3. @ Fat Man, rather than “an Arab with a bag full of money”, I expect the strings are being pulled by indivduals with a belief system that includes the beliefs that elected and appointed officials are more capable of making decisions for individuals than the indivduals are for themselves, and that the market cannot provide for the necessities of life without the guiding hand of these same elected and appointed officials.

    Is that cynical enough for you?

Comments are closed.