Just think! Each of these plants would have used ~ 5% of the Province of Ontario's gas consumption.
----- Original Message -----
From: Gene Cramer
Sent: Thursday, March 06, 2003 6:25 PM
Subject: [MbrExchange] EnLG 2003mar10 Those Exploding Natural Gas Prices
Those Exploding Natural Gas Prices
Business Week 2003mar10 pages 36/37 (synopsized by ENC)
Natural gas hit $9.70/MBTU on Feb 25, doubling in 4 days. Four times what it cost last year. It was $6/MBTU earlier in Feb.
SPOT prices for natural-gas deliveries in Texas and New York hit $25/MBTU the same day.
While oil prices are an international phenomenon, natural-gas is almost entirely a North America homegrown problem. The industry just isn't producing enough gas.
The reason: after 2000/2001, energy companies forecast that the usage would drop; so cut back on drilling new wells. But demand stayed strong because of new electricity generating plants -- which now account for 1/4th of all usage, up from 1/8th a decade ago.
The number of rigs drilling is 767, 30% below the all time high of July 2001.
Industry consolidation (Chevron/Texaco and Conoco/Phillips have lower drilling budgets than pre-merger).
Large producers (ExxonMobil and BP PLC) are more inclined to merge and to cut costs than to bring new fields on line.
Collapse of energy trading companies and the entry of banks as traders (more cautions, drilling less).
Financial companies are telling energy companies to reduce debt and boost Return On Investment.
Caution isn't likely to be reduced soon >>>> prices staying up.