The price of natural gas just dipped to its lowest level since September 2012, just in time for the coldest months of the year. As the EIA reports, surging production has helped depress prices even as demand spikes during these cold winter months:
In recent weeks, prices have dropped to the lowest levels in more than two years; on December 23, 2014, day-ahead Henry Hub spot prices fell to $2.97/MMBtu, the first time they were below $3/MMBtu in more than two years. Since the end of December, both spot and futures prices have hovered around the $3 mark, and closed at $2.92 and $2.88, respectively, on January 26. Preliminary data sources show increased natural gas production through early winter, with production rebounding quickly from freeze-offs in November and early January.
That’s a boon for Americans looking to heat and power their houses with natural gas, especially for lower-income households for whom those bills constitute a larger relative portion of monthly budgets. That’s certainly welcome news, and even hard-to-please environmentalists will find reason to cheer as cheap natural gas squeezes out much-dirtier coal. Reuters reports:
Coal miner Peabody Energy Corp slashed its quarterly dividend as it strives to rein in costs amid tepid demand, due to expectations that prices of natural gas, a cheaper alternative to steam coal, would remain weak in 2015…Natural gas prices fell by nearly a quarter to $3.36 per million British thermal units (MMBtu) in 2014, while coal futures have fallen to their lowest since 2009.
We’ve said it before and we’ll say it again: to the extent that it displaces much heavier-polluting coal, shale gas is fracking green. When Americans adjust their thermostats to stay warm and toasty this winter, they’ll be paying and polluting less, all thanks to fracking. Hail shale!