“Nothing lasts forever. By curbing output and tempting users, cheap gas will one day be its own undoing, especially if next winter is cold. Meanwhile, natural-gas markets may have to sit through a summer showing of ‘Less Than Zero.'”
The Wall Street Journal reports:
Traders like to exude an “I’ve-seen-this-movie-before” air of nonchalance. But the thriller unfolding in natural-gas markets—call it “Frackopalypse Now”—has even the most jaded of them on the edge of their seats.
U.S. natural-gas prices are at a decade low, at about $2.20 a million British thermal units. That marks an unprecedented discount to crude oil. And next week heralds the start of “injection season,” the time from April through October when warmer weather allows for rebuilding gas inventories.
This could make an already bad glut of gas far worse. The fear is that producers could be forced to actually give gas away…
What happens if the coal fired electrical plants switch to natural gas and new “fear tactic” regulations cause the cost to go sky high? We won’t be able to go back to coal. There will not be a cost effective energy to compete. It may not be perfect but it keeps the market competitive.
It would appear to be cautionary but perhaps not. Even if many of the new conventional plants come online with gas as the fuel, we keep discovering more and more deposits around the world. Things have a way of evening out over time, so I’m not really worried about my investments in producers. I have great faith that pols the world over will figure a way to bugger this up royally.
Well, folks. “unprecedented” is the right word. We are living through the greatest upheaval in the energy markets in my lifetime, an upheaval which is turning the energy industry upside down. And the Federal government seems not to have noticed it yet, much less the media.