It’s been a hot summer, but that hasn’t stopped the U.S. from stockpiling near-record amounts of natural gas in preparation for its use in heating this winter. The FT reports:
By the onset of winter, gas banked for the heating season is likely to approach or exceed 4tn cubic feet, surpassing a previous high set in 2012, analysts believe.
The forecasts are surprising, because this summer has been warmer than the last two and the 10-year norm, according to Commodity Weather Group. Power plants have consumed 4bn cu ft per day more gas than in 2014 as they meet air conditioning needs and turn away from coal as an energy source, according to Bentek Energy.
A strong supply of natural gas means cheaper prices, and for thousands of Americans that heat their homes with the energy source that’s going to mean lower heating bills this winter. (Similarly, the current glut of crude is forecast to put around $90 per month in the pocket of every American household.) That’s good news all around, but especially so for America’s poorest who will now see more money freed up in their budget in the coming months.
And of course, this all comes to us courtesy of shale. The EIA just revised its natural gas output expectations downward slightly through the rest of the year, explaining that “production from new wells is not large enough to offset production declines from existing, legacy wells.” But the short-term impact of that slight decline will be offset by the fact that our winter stores are well on their way to being full. Bring on the cheap heat.