Natural Gas

Resource planners are faced with complex choices for developing cost-effective and robust energy supply portfolios. These choices are complicated by uncertainties inherent in future fuel and emissions costs. In the summer of 2008, retail energy providers with supply primarily from wind generation had a substantial cost advantage over gas-fired generation. In the summer of 2009, though, gas prices plummeted in the wake of the recession. Reversing the previous trend, this shift causes wind generation to appear more costly relative to gas-fired generation.

At the moment, the United States is experiencing a glut of natural gas with record underground gas storage inventories and prices around $4/MMBtu, which serves to underscore the new thinking about U.S. natural gas supply—i.e., future gas supplies might be less constrained than earlier studies suggested they would. Given the speed with which the expectations for U.S. natural gas have changed, it’s reasonable to ask how solid is this new thinking about U.S. natural gas supply and what should the role of natural gas be in meeting our long-term energy needs in a carbon-constrained economy?

At what daily temperature do customers turn on their furnaces? Or more realistically, given individual behavior, over what range of temperatures do they turn on their furnaces? To estimate the current base for its customers, Columbia Gas of Ohio used daily demand and temperature data for the three-year period from April 2005 through March 2008.

The future of natural gas supplies in the United States looks promising due to rising projections of recoverable resources, including unconventional production. A strong supply outlook bodes well for using natural gas as a low-emission transportation fuel.

Unconventional gas and LNG are changing the outlook for future gas prices.

Utilities are turning to natural gas as a bridge fuel, and to support non-dispatchable renewables.

Deposits of unconventional fuels—both crude oil and natural gas—occur in geological environments with very low energy. The exploitation of these low-energy deposits/reservoirs will require significant external energy to replace that lost or never provided by Mother Nature’s handiwork.

Is development of retail choice compatible with best-priced standard-offer service for smaller customers? Conflicting policy priorities threaten to distort Maryland’s retail energy markets.

Gas producers and utilities have all but abandoned R&D and marketing. Is it too late to reverse the death spiral, or can the industry learn from other check-off marketing successes?

As U.S. policymakers consider how to tackle the challenge of greenhouse-gas constraints, the U.K.’s approach to the problem offers instructive examples.