--- In [EMAIL PROTECTED], Julia Thompson <[EMAIL PROTECTED]> wrote:
>
>
>On Thu, 18 Jan 2001, Doug Pensinger wrote:
>
> > I'm just wondering what everyone else out there pays for gas and
> > electric power. PG&E charges me 11.5 cents/Kwh baseline (345 Kwh) and
> > 13.3 cents for over baseline for power and $1.05/therm baseline (64
> > therms) $1.25 for over baseline for gas (the baseline price for gas is
> > up 64% from last January's bill).
>
>I'm not sure what our rates are, but our most recent electricity bill is
>up just a bit from the comparable bill a year ago. And we may have run
>the air conditioner a couple of days on the period from a year ago, and I
>*know* we didn't on the period covered by the most recent electricity
>bill. I can see if I have rate info filed away somewhere, and report on
>that. (Our electricity bill isn't so bad, in other words, but it's a
>little higher than I would have expected without the current energy
>crunch.)
>
>Our last gas bill is over double what the gas bill 12 months earlier was.
>I have never seen such a large check written for the gas bill -- almost
>$120. Since we bought the house in May 1994, there have been only 6 bills
>over $60 for the month -- and our last gas bill was for almost $120. I'm
>not sure what period that covers, but I'm hoping that the really nasty
>cold days in early-to-mid December were on that bill. I saw figures on
>what the wholesalers are charging the gas companies for natural gas in the
>newspaper earlier this week; I think it about quadrupled since 12 months
>ago. (I may be able to find that paper and give more precice numbers on
>the wholesale prices as given there.)
>
>I wish I had more definitive numbers handy.
>
For about 6 years, natural gas prices had been somewhere around
$2.00/thousand cubic feet. They rose to about $3.00/million BTU at the
beginning of 2000, and then soared to just over $10.00/million BTU at the
beginning of this year.
The reason for this upturn in prices is somewhat complicated. Old natural
gas wells are being played out. The $2.00 price was not enough to bring a
number of new natural gas wells on line. What is particularly striking
about this is that this is true even when natural gas is found in a well
drilled to produce oil. It�s often not worth doing the extra set of
perforations, well completion and pipeline needed to bring the gas on line.
So, on the production side we have a projected drop in production. This
did, indeed, raise the price of natural gas from about $2.30 to about $3.00
by the beginning of the year. We also had a slow rise over that span in the
industrial use of natural gas and the use of natural gas to produce
electricity. There are a number of reasons for this, including the cheap
price and the fact that natural gas produces the least pollution of all the
fossil fuels.
The question that should be apparent is with supplies flat and expected to
decrease and with demand increasing, why didn�t prices increase sooner? The
answer is that 3 very mild winters lowered the demand for natural gas as a
home heating fuel. So, gas in storage was still high, and since building
additional storage costs a significant amount of money, there was no push to
buy natural gas at the present price and then store it until prices rose.
But, with the long hot summer of 2000, natural gas inventories were down in
August. And then, there were long range forecasts of a normal winter. This
drove the price up. And then, the start of winter was a bit colder than
normal, and the stored supply of natural gas shrank to a lower level than it
has been at in years, and people became nervous and bit the price up to over
$10/million BTU.
I hope that gives a picture of what happened.
Dan'm Traeki Ring of Crystallized Knowledge.
Known for calculating, but not known for shutting up
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