Who Pays When Natural Gas Prices Plummet?

Despite the bitterly cold and blistering winter the Eastern Seaboard has just fought through, the mild and almost non-existent winter of the West Coast has the US using 30 percent less natural gas than we did last year. And now according to The Fiscal Times, "there is over 1,470 billion cubic feet of natural gas in storage." With the peak season over, improved natural gas pipelines, and this increase in supply, the US is experiencing the lowest price for natural gas in three years.

The improved pipeline situation is a result of new pipelines, and older ones being re-purposed, making it easier to get the gas where it needs to go at a fraction of the cost, and ultimately driving down the end price as well.  The US Energy Information Administration claims, "The US natural gas pipeline network is a highly integrated transmission and distribution grid that transports natural gas to and from anywhere in the continental US. The grid is comprised of more than 210 natural gas pipeline systems, over 300 thousand miles of interstate and intrastate transmission pipelines, more than 11 thousand delivery points, 24 market centers or hubs, and 400 underground natural gas storage facilities."

It's likely that natural gas drillers, coal mining companies, and coal plant owners will be the hardest hit by the low prices, and will have to make strong and effective decisions to improve their operations in order to absorb some of the lost revenue. While consumers, and utilities that own their own power plants will come out ahead. It will be imperative for drilling companies to increase their productivity by deploying advanced technology, more efficient equipment, and smarter operating software systems. The natural gas industry certainly isn't going anywhere, and will come out of the price plummet situation more streamlined, effective, and prosperous. Please contact us today to increase your competitive edge with comprehensive quality management solutions that are designed to help companies optimize decision-making capabilities, and improve their bottom line while offering a flexible, cloud-based platform.