Oh Gee, an overabundance of fuel... what will we do with it all?

[Frank Lee]

This is about the 50th headline and story I've seen about plummeting natural gas prices benefiting consumers. So I look at my gas bill and not only has it not gone down in $/unit, they have been assessing an interim increase for the last year!

US natural gas boom brings decade-low price - Yahoo! News

By JONATHAN FAHEY | Associated Press

NEW YORK (AP) — The price of natural gas has fallen to its lowest level in more than a decade, a remarkable decline for a commodity that not long ago was believed to be in short supply.

The country's supply of natural gas is growing so fast that analysts worry the country's underground storage facilities could be fullby fall.

On Wednesday, the futures price of natural gas declined to $1.984 per 1,000 cubic feet, its lowest level since January 28, 2002, when the price hit $1.91. If the price falls to $1.75, it would be the lowest since March 23, 1999.

Natural gas production has boomed across the country as energy companies employ a new drilling technique to tap previously untouched reserves. The process has raised concerns about water safety, and has been temporarily banned in New York and New Jersey. But where it has been allowed, it has led to increases in drilling, job growth and production.

The falling price of natural gas has been a boon to homes and businesses that use the fuel for heat and appliances, and for manufacturers that use it to power their factories and make chemicals, plastics and other materials.

From October to March, households spent $868 on average on natural gas, a decline of 17 percent from last winter. Those savings have helped to relieve the burden of rising gasoline prices. Households spent $1,940 on gasoline from October to March, a 7 percent increase from the same period a year ago.

There is so much natural gas being produced — and still in the ground — that drillers, policymakers, economists and natural gas customers are trying to figure out what to do with it.

Here's more about what natural gas is, what it is used for, who makes it, and where it comes from:

HISTORY

Natural gas seeps baffled early civilizations, and likely inspired the Ancient Greeks to build the shrine known as the Oracle of Delphi. In the U.S., the natural gas industry was launched in 1859 when Edwin Drake struck oil and gas in Titusville, Pa. Natural gas prices were regulated for most of the last century. It wasn't until 1993 that the last of the federal price controls were lifted.

WHAT IS IT?

When natural gas is pulled from the ground, it is 70 percent to 90 percent methane, a simple molecule of carbon and hydrogen that is the most abundant organic molecule on earth. Methane is what gets delivered to homeowners. But the natural gas that comes out of the earth also contains some ethane, propane, butane and other hydrocarbons. These other hydrocarbons are separated from the methane and sold to chemical companies and other industrial users.

ORIGINS OF A GLUT

As recently as five years ago, natural gas was thought to be in short supply in the U.S. Then engineers learned to drill horizontally into shale formations and inject millions of gallons of water, sand and chemicals to break open rock and free the natural gas trapped inside. Enormous reserves of gas that were suddenly economical to produce were found in the East, Southeast, Midwest and West.

PRICES AND COSTS

— Current U.S. futures price: $1.984 per 1,000 cubic feet

— All-time low: $1.32 (Jan. 13, 1995)

— All-time high: $15.38 (Dec. 13, 2005)

— 10-year average: $5.96

— Current price in Asia: $15.90

— Current price in Europe: $9.37

PRODUCERS

— Top 5 producers of natural gas in the U.S.: ExxonMobil, Chesapeake Energy, Anadarko Petroleum, Devon Energy, Encana.

— Top 5 producing states in the U.S.: Texas, Alaska, Louisiana, Wyoming, Oklahoma.

— Top 5 producing countries: U.S., Russia, Iran, Algeria, Canada.

HOW NATURAL GAS IS USED IN THE U.S.

— 34 percent is used to generate electric power. (It accounts for a quarter of the nation's electricity.)

— 30 percent is used by industry to heat boilers or make chemicals, fertilizer and plastics.

— 21 percent is used to heat homes, cook, dry clothes and heat water.

— 14 percent is used by office buildings, restaurants and shops.

— 0.1 percent is used to power trucks, buses and other vehicles.

POSSIBLE USES FOR AMERICA'S GROWING SUPPLY

— Expand the production of plastics, fertilizers and other products that use natural gas as a feedstock.

— Liquefy it and export it to Asia and Europe, where it fetches far higher prices.

— Build natural gas fueling stations to encourage trucking and other commercial fleets to use compressed natural gas or liquefied natural gas as fuel.

— Turn it into diesel or ethanol.

SOURCES: Oil Price Information Service, Platts, Energy Information Administration, Natural Gas Supply Association.

[kingsway]

Sounds like you should all be running your cars on LPG?

[Frank Lee]

I should be running this freaking computer on natural gas!

[cleanspeed1]

There are stations close to me that sell natural gas for $1.50 per gge. And Technocarb has CNG/LPG injection kits on sale right now for quite a bit under retail.

Funny that the oil companies didn't see this coming ( seems like that's the blanket excuse for corporate malfeasance ).

[Frank Lee]

I think I need a CNG kit or 10.

[jtbo]

Originally Posted by Frank Lee

I should be running this freaking computer on natural gas!

You could:
Tropical Introduces 5kW Natural Gas Fuel Cell Power System -- ATHENS, Greece, April 10, 2012 /PRNewswire/ --

But I guess price of such system, might be bit more than what one could save over electricity bought from power company, but at least no longer black outs, unless gas is out, that is.

[Frank Lee]

Guess I need to wait to see if my utility EVER catches up with what the charts say has been happening for four years. Until then, not the greatest deal on earth.

[mechman600]

The truck dealership that I am employed by recently sold 50 LNG powered trucks to a customer for this very reason. They actually run on 95% LNG and 5% diesel (using diesel as the spark plug). The $80K premium on EACH truck is apparently work the offset in natural gas prices, apparently half of diesel fuel.
Westport HD :: Natural Gas Engines for Heavy-Duty Trucks

[cleanspeed1]

$80k?

What is it made out of, a pure gold/platinum/diamond matrix?

Good Grief.

[Stubone]

the prices will stay down until a lot of people have converted their vehicles and then it will go up a lot.