The Heritage Foundation Explains USA Natural Gas Price Drop
by Andreas Exarheas
click here to read this article at Rigzone
*this article was not written by Roseland Oil & Gas
The U.S. natural gas price is dropping because supply is way up and infrastructure to export excess natural gas is being slowed.
That’s what Diana Furchtgott-Roth – Director, Center for Energy, Climate, and Environment, and The Herbert and Joyce Morgan Fellow in Energy and Environmental Policy, at the Heritage Foundation – told Rigzone in an exclusive interview today, adding that “natural gas output was at records in December” and that “the market was still saturated in the spring”.
“On the domestic front, this summer storms knocked out power for some consumers, and the gas wasn’t used for normal air conditioning purposes,” Furchtgott-Roth told Rigzone.
“More long term, subsidies for wind farms and solar plants have distorted the energy market, and companies are not applying to build new large natural gas baseload power plants – even though this would be the least expensive form of energy for consumers, and America needs more baseload power,” the Heritage Foundation representative went on to state.
Furchtgott-Roth told Rigzone that “U.S. natural gas could … be exported” but noted that “approvals for pipelines and export terminals are purposely slowed by the Biden-Harris administration, so the natural gas cannot get exported to countries that would like to purchase it”.
“Over the past decade, through innovative technology, America has turned from a natural gas importer to a natural gas exporter,” Furchtgott-Roth added.
“Our pipeline infrastructure needs to catch up to this permanent new reality so that we can export some of our massive supplies of LNG and help our allies who face high prices,” the Heritage Foundation representative continued.
“We also need to be building more natural gas power plants for baseload power to ensure reliable, resilient, and affordable electricity for consumers and manufacturers,” Furchtgott-Roth went on to state.
Rigzone has asked the White House for comment on Furchtgott-Roth’s statement. At the time of writing, the White House has not yet responded to Rigzone’s request.
Frederick J. Lawrence, the ex-Independent Petroleum Association of America (IPAA) Chief Economist, told Rigzone in another exclusive interview today that the U.S. natural gas price drop is primarily due to the U.S. Energy Information Administration (EIA) release of natural gas storage data but added that “there are some international factors to note as well”.
“The U.S. EIA weekly report shows a build of 35 billion cubic feet (bcf) that exceeds estimates,” he stated.
“Natural gas stocks are 369 bcf which is greater than the five-year average. In addition, earlier in the week we saw some bearish indicators across the pond as EU inventories remain robust and supply fears have eased since the Ukraine incursion into Russia,” he added.
In another exclusive interview held today, Art Hogan, Chief Market Strategist at B. Riley Wealth, said the EIA weekly natural gas storage report “came in larger than estimates”.
“There have been some other macro pressures for the last two months as well, with natty gas down some 34 percent from its June 11 highs,” he added.
“The concern sits with a combination of the weaker U.S. dollar, and imbalance of supply and demand, and no extreme weather disruptions,” he continued.
Ellen R. Wald, the President of Transversal Consulting, told Rigzone in another exclusive interview that the pullback in natural gas futures today reflects seasonal shifts and the expectation of cooler fall weather in the future.
The Henry Hub natural gas price closed at $3.129 per million British thermal units (MMBtu) on June 11, $2.235 per MMBtu on August 19, $2.198 per MMBtu on August 20, and $2.177 per MMBtu on August 21. At the time of writing, it is trading at $2.04 per MMBtu.
by Andreas Exarheas
click here to read this article at Rigzone
*this article was not written by Roseland Oil & Gas