The Reason We Have Low Natural Gas Prices: Marcellus
Startling new statistic from Bloomberg: The United States was able to produce enough energy from homegrown sources to meet 81 percent of our energy demand in 2011. Why? The miracle of hydraulic fracturing of shale.
Second startling new statistic: The Marcellus Shale alone produced 6.3 billion cubic feet per day in March. That’s enough gas to meet 62% of natural gas demand in 11 eastern states from Maine to Maryland. Astonishing.
So much natural gas is coming from the Marcellus shale deposit that costs for utilities are at levels unseen in more than a decade.
The drop in prices underscores how the hydraulic fracturing, or fracking, boom that’s contributing to America’s drive toward energy independence is helping utilities at a time when the nation’s economy is struggling to gather momentum.
Output in the Marcellus shale doubled to a record 6.3 billion cubic feet a day in March, equal to about 62 percent of gas demand in the 11 eastern states that stretch from Maine to Maryland, according to Energy Department data.
“The Marcellus singlehandedly changed the gas balance in the U.S.,” said Fadel Gheit, a senior energy analyst for Oppenheimer & Co. in New York. “Marcellus shale production is the reason we have low gas prices.”
Prices have declined 14 percent this year on rising production and reduced demand during the mildest winter since 2000.*
*Fort Wayne (IN) The Journal Gazette/Bloomberg (Jun 24, 2012) – Natural gas supply unleashed; prices fall