What Happens When Natural Gas is No Longer Dirt Cheap?
From The Washington Post
By Brad Plumer
Eduardo Porter has a nice column today on the fact that U.S. carbon-dioxide emissions have dropped 13 percent since 2007. He mentions the usual factors: the recession, better fuel efficiency for cars and trucks, the switch from coal to natural gas.
But here’s the less-flip side to that story: The recent plunge in carbon emissions isn’t likely to last — at least not without further changes to energy policy. One reason? Natural gas prices are starting to creep back upward again.
By now, the story on shale gas is well-known. Four years ago, natural gas cost around $9 per million British thermal units — too costly to use for most electricity needs. Then, thanks to new advances in drilling, companies were able to extract gas from shale-rock formations in places like Texas and Pennsylvania. Natural gas prices hit a stunning low of $2 per million BTUs last year. As a result, natural gas was able to edge aside dirtier coal in the electricity system.
But that trend appears to be bottoming out. As Jerry Dicolo reports in the Wall Street Journal today, natural gas prices have crept back up to $4 per million BTUs. That’s thanks to a combination of a colder winter, higher demand for heating fuel, scaled-back drilling, and also new storage facilities that are preventing a glut of gas on the market.
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