Scanning headlines, you may notice natural gas prices are getting increased attention. Natural gas prices are at historical 9-year lows. Can your business benefit?
Your business can greatly benefit
If your business is located in a state with a deregulated natural gas market, now is the best buying opportunity in many years for natural gas supply. You can lock in a fixed-price supply contract today that takes advantage of historical low prices for years to come.
Causes of low prices
Impacting natural gas prices are mild winter weather, a decrease in demand for electricity, and an abundance of supply. Also significantly contributing to historical low prices is how and where natural gas is extracted. Horizontal drilling and hydraulic fracturing are innovative techniques for capturing natural gas in shale formations, including the Barnett Shale inTexas, the Marcellus Shale inPennsylvania, and the Haynesville Shale inLouisiana. The techniques, enhanced from the engineering perspective and fostered by regulatory changes during the last 5 years, give theUnited Statesaccess to an estimated 100-years worth of shale gas that was previously unreachable.
An increasing number of coal-burning power plants are switching to natural gas for generating electricity. Natural gas burns cleaner than coal, and gas-burning power plants are cheaper than coal-burning plants to build and to operate. Recent state and federal legislation forces coal-fired power plants to decrease carbon dioxide emissions. Meanwhile, the Environmental Protection Agency recently cited coal-burning power plants as the single largest source of greenhouse gas emissions in theUnited States.
In the last decade, use of natural gas to generate electricity increased 50 percent. The U.S. Energy Information Agency reports that between 2009 and 2010 natural gas use for power generation increased by 24% inNorth Carolina, 18% inVirginia, and 15% inSouth Carolina. The bottom line is cleaner skies and more gas being used to generate electrons.
During the last decade, natural gas price swings were dramatic, particularly when hurricanes affected natural gas production in theGulf of Mexico. Who could forget the late summer of 2005 when hurricanes Rita and Katrina hit the Gulf, driving gas prices up to an all time high? Today, demand for natural gas is increasing worldwide, not just in theUnited States. Federal permits are in place to provide for the extraction and delivery of 3 trillion cubic feet per year of natural gas exports. AsU.S.and worldwide demand increases, so could prices. Most industry experts forecast continued fluctuations in natural gas prices with a slow steady upward trend. Wind, solar, and other “green” resources are increasingly being used to create electricity but they are not able to generate enough power to keep up with the growth in demand. And, those resources are less attractive on a relative cost basis when natural gas prices are low. The fewer available alternatives, the higher natural gas prices could climb.
What does it mean for you?
In states with deregulated natural gas markets, now is an ideal time to consider pricing provided by many competitive suppliers. If you’re currently in a supply contract that ends a year or more from now, you can still consider locking in today’s prices for future supply needs in a supply contract that begins when your current contract ends. A supply contract with terms and conditions that best take advantage of historical low natural gas prices can lock in a price for service as far out as 2016. States with deregulated natural gas markets are AR, DC, FL, GA, IN, KY, MA, MD, MI, NJ, NM, NY, NC, OH, OK, PA, SC, TX, VA, WV, and WI.
APPI Energy can help
Are you confident that you’re paying the lowest natural gas prices and have a supply contract that meets your needs? If your answer is, “I don’t know,” APPI Energy can help. Founded in 1996, APPI Energy is a completely independent team of energy experts that can help you take advantage of historical low energy prices. Endorsed by 140 affinity groups and serving 3,300 clients with locations across theUnited States, APPI Energy can review your current energy supply contract, at no risk or upfront cost to you. To learn more, contact 800-520-6685, firstname.lastname@example.org, or www.appienergy.com.