The Positive Natural Gas Supply Situation Benefits Consumers - A Look at January 2011 (Energy Analysis 03/08/2011)
AGA analysis of January 2011 bills of northern residential natural gas consumers reflected a cost savings of $100 on average relative to similar bills from the supply-constrained January of 2006.
Just five years ago domestic natural gas supplies were temporarily, but severely, constrained by natural events. Today the natural gas supply situation has fundamentally changed. Not only has the natural gas industry recovered from the impact of the devastating hurricanes, but improvements in extraction techniques for gas from shale formations are providing an optimistic view for long-term supply potential. This much stronger supply position is the primary reason January 2011 wellhead prices have fallen more than 50 percent relative to their levels just five years ago, despite the coldest January in over 15 years. Importantly, all natural gas consumers have benefited from these lower prices. To illustrate, had the January 2011 bills of northern residential natural gas consumers reflected the higher prices from the supply-constrained January of 2006, their bills would have been some 40 to 70 percent higher roughly $97 to $125 more for the month.
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Bruce McDowell, Director Policy Analysis, (202) 824-7131