Electric Power Plants to Drive U.S. NatGas Demand

EIAThe reason the price of natural gas is so low, as we’ve long pointed out, is simple economics. Supply and demand. We have a steady-to-slightly-increasing demand, but we have a whole boatload of new supply–thanks to the miracle of hydraulic fracturing. How does this supply/demand imbalance get corrected? You either need more demand, or less supply. We can assure you the less-supply thing ain’t happenin’. That leaves more demand. Yes, there is some interest from other countries who want our cheap natural gas. But let’s face it–we need to create more demand right here at home. Will that happen any time soon? Perhaps. We’d long hoped that natural gas vehicles would come along to dramatically increase demand of our domestic gas. So far, that hasn’t happened. NGVs haven’t taken off. But there is one source that can’t seem to get enough natgas: electric power generation. Coal plants are shutting down at an alarming rate, thanks to Obama’s war on coal. Nuclear plants are also shutting down because they can’t compete with cheap natgas. The fantastic trend recently has been the planning and building of new natgas-fired electric plants. Will demand for natgas-fired electricity continue to grow? For a partial answer to that, we turn to the number crunchers at our favorite government agency, the U.S Energy Information Administration…

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