Northeast U.S. Natural Gas at Decade-High for Winter on Supply

[Purveyor]

Source: Bloomberg

By Naureen S. Malik Oct 6, 2014 10:05 AM ET

Natural gas for January in the U.S. Northeast is the most expensive in more than a decade on concern that pipelines may not be able to ship enough fuel, risking a repeat of last winter’s record prices.

Supplies in the so-called consuming east region, which covers the Northeast to the Midwest, are at the lowest seasonal level since 2000, government data show. Additional pipelines into New England from the Marcellus shale fields in Pennsylvania won’t begin service until at least late 2016.

Buying gas at current levels now may turn out to be a bargain. While the fuel in New York for January is selling at $13.60 per million British thermal units, more than nine times current prices, gas surged to a record $135 last January as frigid weather boosted demand beyond what pipelines could deliver.

“People are scared,” Kyle Cooper, director of research with IAF Advisors and Cypress Energy Capital Management in Houston, said Oct. 2 by phone. “The market is reflecting that despite prolific production growth in certain areas, the infrastructure has not been expanded to distribute that gas all the way across the country. There’s still a very real and very significant constraint.”

Read more: http://www.bloomberg.com/news/2014-10-06/northeast-u-s-gas-at-decade-high-for-winter-on-supply.html

[HereSince1628]

1. We're fracking like mad and have the worst shortage in decades.

Well, that's just disappointing considering the environmental damage we are tolerating.

[NickB79]

2. What has changed in the past few years?

Just 2 years ago, natural gas was very cheap, and it was credited to the boom in domestic production from fracking. This is from 2012:

http://www.marketplace.org/topics/sustainability/natural-gas-prices-drop-lowest-level-decade

it's tough to complain about the price of natural gas these days, which has now dropped below $2 per thousand cubic feet, the lowest in a decade.

Now, it's at the highest in a decade and limited pipeline volume is blamed.

This is only possible if a: there has been a massive increase in the number of natural gas customers in only 2 years, b: they've actually shut down pipelines, or c: gas production from the frack wells is falling faster than they can drill new wells. AFAIK, no significant gas exports have begun, so what exactly has happened to all that cheap gas without major changes in infrastructure?

[Sopkoviak]

3. Maybe it has something to do with shutting down or converting to gas

Older dirty power plants across the country.

[happyslug]

7. Investors are salivating at shipping US Natural Gas to Asia and Europe

In both places, Natural Gas Prices are much higher then they are in the US. No one has started to export Natural Gas, but many expect it to be the next big thing.

The bad news, is by 2017 US Natural Gas production is expected to start a rapid decline and return to 2002 levels by 2020. This is the result of how fast these fracked wells are and how little are in each hole (Average life five years, with most wells peaking production within 18 months and then entering a sharp decline).

http://blogs.reuters.com/great-debate/2014/09/24/why-the-99-percent-is-getting-the-short-end-of-the-stick-from-the-dept-of-energy/

Such exports are expected to start in 2015:

http://online.wsj.com/news/articles/SB10001424127887324767004578489130300876450

http://www.usatoday.com/story/news/nation/2014/04/07/us-natural-gas-exports-to-begin/7204925/

Massive number of additional export facilities have been made for no one is willing to accept that US natural gas production will start to fall. Yes other have called this a Bubble, but no one is even trying the pop that bubble, which is what should be done in the case of ALL bubbles:

http://www.forbes.com/sites/billpowers/2014/09/03/the-popping-of-the-shale-gas-bubble/

http://davidstockmanscontracorner.com/well-i-did-tell-you-so-the-texas-gas-bubble-massacre-txu-was-bankrupt-from-day-one/

People have been calling Shale Oil a bubble for at least two years, but no one has made a move to pop it. The sooner a bubble is popped the less damage it will do but right now Wall Street wants a bubble for without one economic growth in the USA is non-existent. Thus no one wants to pop this bubble, so it will continue to inflate till it pops when people are unable to pay their gas bills and gas companies start turning off gas service next spring (It may pop earlier if the Gas Providers acknowledge they will NOT get paid for the Natural Gas they are providing so it may be earlier then next spring).

[NutmegYankee]

9. Conversion of power plants to NG and switching customers from oil.

Oil is still the king of New England, but gas is making inroads. Even at record prices last winter, it remained half the cost of oil.

[meegbear]

4. Great!

My heat is going up and my electric company announced they'll be increasing their rates by 37%.

Winter ain't gonna be pretty.

[OnlinePoker]

5. Last year was an extremely cold winter and the east went through a ton of gas.

Another year like that and the gas prices are going to explode. The eastern storage is 9.1% less than the 5 year average.

http://ir.eia.gov/ngs/ngs.html

[marble falls]

6. I thought we could just frack our way to cheapest natural gas ever!!!

[Dopers_Greed]

8. Silly people who bought the energy industry's talking points on fracking...

You didn't think that the tracking boom would actually benefit consumers, did you?

[quadrature]

10. this story is just made up

go here to get the real numbers
http://www.bloomberg.com/markets/commodities/futures/

futures price for NG for 1 million BTU
for delivery in Henry Louisiana
is $3.91, which is very reasonable

[Throckmorton]

12. and that gas gets to New England how?

Via pipelines that are very close to maximum capacity.

[kentauros]

11. Rocket Stove Mass Heater

I know this isn't an idea that would likely work in apartments or high rises, but maybe for those of you in your own individual homes it might be something worth trying

[font size="4"]Rocket Stove Mass Heater[/font]

rocket mass heaters in a nutshell:
heat your home with 80% to 90% less wood
exhaust is nearly pure steam and CO2 (a little smoke at the beginning)
the heat from one fire can last for days
you can build one in a day and half
folks have built them spending less than $20


the verbose details on rocket mass heaters:

This could be the cleanest and most sustainable way to heat a conventional home. Some people have reported that they heat their home with nothing more than the dead branches that fall off the trees in their yard. And they burn so clean, that a lot of sneaky people are using them illegally, in cities, without detection.

When somebody first told me about rocket mass heaters, none of it made sense. The fire burns sideways? No smoke? If a conventional wood stove is 75% efficient, doesn't that mean the most wood you could possibly save is something like 25%? How do you have a big hole right over the fire and not have the house fill with smoke? I was skeptical.

And then I saw one in action. The fire really does burn sideways. The exhaust is near room temperature - and very clean. The smoke doesn't come back up because a huge amount of air is getting sucked into the wood hole. Neat! I sat on one that had not had a fire in it for 24 hours - it was still hot!

how it works:


(much, much, much, much more at link!)