Natural Gas Supply is High, but Demand is Low
As prices at the gas pump slowly creep up, the price of fuel to heat homes and power buildings remains low as the world faces an abundance of natural gas.
The U.S. Energy Administration reported for the week ending March 20 that the United States has 1.654 trillion cubic feet of natural gas in storage, 29 percent more than in the same period last year. After that report, the price of natural gas fell to less than $4 for 1 million British thermal units, or BTUs. That”s down about 70 percent from July”s prices.
Demand for natural gas also has fallen worldwide. Asian and European markets for the gas are slowing, and even though companies are slowing production – usually an act that drives prices up – the demand for natural gas is low enough to keep prices down for a while.
“There are fewer rigs out there,” said Tim Rundall, director of gas supply for South Jersey Gas. “But we haven”t seen much of an increase in price.”
Despite the overwhelming supply and lack of demand, companies in New Jersey are going forward with new projects using natural gas. Natural gas is considered a more environmentally sound form of energy because it produces less carbon dioxide than burning coal or oil.
South Jersey Gas said it plans to extend its gas line in Woodbine, from Route 610 down Route 550, beginning April 15. The line will hook up with the Woodbine Developmental Center, Cape May county”s largest employer.
The developmental center plans to replace its primary source of fuel, oil, with a combination of natural gas from the line and methane generated by the Cape May County landfill.
While the main component of natural gas is methane, the methane that is generated by the landfill has a lower BTU content than natural gas. By mixing the two together, the BTU number from the landfill gas is raised, generating more energy and improving efficiency, according to Todd Gordon, a spokesman for South Jersey Gas.
Natural gas also is being used at the Vineland Municipal Electric Utility to replace coal as a fuel source.
In addition to domestic projects, several offshore natural-gas projects are in progress. Liberty Natural Gas has proposed a project about 16.5 miles off the coast of New Jersey that would allow for the storage and delivery of liquefied natural gas. LNG said in August that it intended to be online by 2011.