One of the arguments in favor of shale gas drilling is that it will create more supply leading to lower prices for consumers (that’s Economics 101 for the Occupy economic illiterates). Those opposed to drilling scoff and say it won’t happen, that the big, bad energy companies will rig the system to keep prices, and profits, high. Here’s a dose of reality for those who scoff:
Natural-gas drilling in the Marcellus Shale might have stirred controversy, but National Fuel Gas Distribution Corp. said it’s also led to a larger supply and lower prices.
The utility, which serves 14 counties in northwestern Pennsylvania, announced Monday that it is passing along to customers an 8.2 percent decline in the price of natural gas.
An average customer on balanced billing — using 95,000 cubic feet of gas a year — would see his or her monthly bill fall from $92.51 to $84.92.
"This decrease is the direct result of a continuing decline in the market price of natural gas, largely due to the increased supply, particularly from the Marcellus Shale development," Nancy Taylor, a company spokeswoman, said in a statement.
The most striking evidence of the price decline can be found in comparing the current price of $9.56 per thousand cubic feet to the peak price of $19.71 that was announced Aug. 1, 2008.
The abundance of gas found in the Marcellus Shale, much of it in Pennsylvania, has been a big factor in that decline, Taylor said.*
*The Erie Times-News (Nov 1, 2011) – Natural-gas prices fall 8.2 percent in Erie region