Gas pains and gains
Prices for natural gas futures have risen more than 17 percent the past three months, and they continued to gain last week, in part due to the ongoing heat wave blanketing much of the East Coast and Midwest. That’s because natural gas fuels a substantial amount of the electric generation that’s powering air-conditioning systems in the scorched regions.
But natural gas production in western Colorado hasn’t returned to its pre-2008 boom levels and isn’t expected to soon. Instead, gas-company executives expect slow, steady growth in gas development in the Piceance Basin, as The Daily Sentinel’s Gary Harmon reported last week. Competition from other large natural gas fields being developed around the United States are limiting interest in this region, while increased oil prices are driving some drilling firms to focus more on oil than natural gas.
Natural gas news of late has been a frustrating mix of good and bad, gain and pain.
For example, while many experts see natural gas taking on an increasing role in meeting this nation’s electric-generation needs, heavy spring runoff throughout the West has hydro-electric generation at near peak levels, diminishing the immediate demand for gas-fired electricity.
Still, the overall outlook for natural gas is bullish, even if it’s not booming.
Last week’s decision by the Department of Interior to allow drilling of up to 3,700 gas wells in the Greater Natural Buttes Field near Vernal, Utah, will mean more work for well-service companies located in western Colorado.
Meanwhile, in the aftermath of the tsunami and destruction of a nuclear reactor in Japan in March, nations across Europe that have relied heavily on nuclear power are turning to natural gas as the most cost-effective and politically palatable alternative, the International Business Times reported.
And General Electric Corp., the leader in the development of electric generation plants, last month announced that it will be producing a new, super-efficient, natural gas generating plant. The first one, a 510 megawatt plant, will be built in France, according to the company’s website. GE also hopes to link the plants with wind and solar power.
Additionally, compressed natural gas continues to gain more acceptance as a vehicle fuel. CNG fueling stations like that recently were installed by the city of Grand Junction for its fleet of trash-hauling trucks are cropping up in municipalities and private companies all around the country. And just last week, the company that operates a large car ferry on Lake Michigan announced it may switch fuel for the SS Badger from coal to compressed natural gas.
There is also a bill before Congress, supported by Texas billionaire T. Boone Pickens, to establish new tax credits for individuals and companies that switch to vehicles that run on compressed natural gas. However, because of the cost of the tax credits and the fight over the federal debt, even Republicans who once supported the bill have been backing away from it.
Even so, while the current news is a mixed bag for the natural gas industry, its future continues to burn brightly.