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Bringing the Heat
Cheap Shale Gas Keeping Americans Warm

Between polar vortices and surprise snow showers in the South, it’s been a cold winter. As temperatures have plunged, demand for natural gas has soared, sending the Henry Hub spot price up past $5 per million BTU for the first time in more than three years. That’s still a much cheaper price than most people in the world pay for natural gas. And here’s something else to ponder: If it weren’t for the shale boom, that price would likely be much higher.

Consider the following graph, which compares the rise in natural gas prices from this winter with the rise in the similarly cold winter of 2000–01.

Graph by Lindsey Burrows

Notice how close the price of natural gas was for both years in November, and how quickly those two lines diverge? This is fracking’s handiwork. Thanks to a larger supply, America’s gas market is less vulnerable to price spikes brought on by events like the recent prolonged cold snap.

This is especially good news for America’s poor. An unexpectedly doubled gas bill can wreak havoc on tight budgets. This winter may have us busting out our down coats, but thanks to shale, it isn’t fleecing us.

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  • Douglas Schmitt

    Yes, the long term price remains low, but unfortunately during the recent cold spells, the daily spot price for NatGas has jumped from $5.00, to as much $120, more often $8, $10, $20, or $40. But there were large purchases at $120.
    Thus, our utility bills, which have a fuel cost recovery clause in them, are going to be rising in the near/mid term to account for these short term spikes.

    This is unrelated to the long term supply/demand equation. But it is directly related to daily pipeline capacity, and firm and non firm delivery contracts for natgas on those pipelines .

  • Fat_Man

    States like NY and CA that do not allow for fracking to recover NG, should be forced to pay world market prices for their gas imports.

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