Winter is just around the corner, whether it feels like it or not.
And while I was watching the nightly news on ABC, they were reporting that while gas is up a whopping 72% and natural gas up an even more whopping 143%(natural gas is up 9.9% today!!!!!).
So I thought it might be time to re-post a diary I did earlier this year, which is suddenly much more relevant than it was then:
With 92% of the new homes in the midwest, the areas with the coldest winters, being built with natural gas as their heating source (70% overall), including an increase of 1.1 million homes annually, it would seem that it would be in our best interests to make sure that the supply of NG will remain available and viable.
But according to Frank Clemente, the Senior Professor of Sociology and Energy Policy, Penn State University, the NG supply is on the verge of being tapped out. In an excellent article he outlines many of the arguments against the reliance of NG as a long-term solution for our energy needs.
Statistics like the following don't debate whether Bush's energy plan for liquefied natural gas are safe energy supply, but whether natural gas is a viable, long term fuel source at all.
(1) domestic NG production only reached 19.7 tcf in 2004 despite an additional 461 rigs in the field--an 82 % increase over 1997; (2) NG well head prices have steadily escalated from $2.10 mcf in 1998 to $ 6.31 mcf in the first four months of 2005 - an increase of $ 4.21 ( 200 %); and (3) chief U.S. policy makers (e.g., Alan Greenspan) now readily admit the nation cannot meet its NG supply needs and will be increasingly reliant on imports from politically unstable areas - darkly paralleling our current dependence on foreign areas and the entailing socioeconomic costs.
Also, since the repeal in 1987 of much of the Fuel Use Act of 1978, during the natural gas "crisis" virtually all new power plants have been NG units in an "historic departure from the traditional fuel diversification strategy of electric utilities".
Even the natural gas industry, in this interview with Bush, seems to sum up the current situation in much the same way:
Speaking of supply and demand, as we have seen recently, the growth in natural gas demand is not being matched by available supply, which has put upward pressure on natural gas prices. Any honest assessment of the chief cause of this supply-demand imbalance will show that, of those viable production areas our industry is currently allowed to explore, most are at or past their prime. This means new supply must be found elsewhere or the supply demand-imbalance--and energy prices--will only increase.
With so many American relying on NG to keep them warm in the winter scenarios such as this may be just on the horizon:
"In 2003, by early March there was just enough supply to keep sufficient pressure in the pipelines to deliver gas (NG) in the Northeast. We were less than 1 week of cold weather from being unable to maintain pressure. We started this season with a nice big holdover, that is shrinking rapidly, and may well start the 2005 withdrawal season 200 to 300 Bcf below last year. If so a cold winter will cause shut-downs regardless of price, and there will be severe price spikes."
And to add to the looming crisis - as of the end of last year, NG was already causing financial hardships for the people most vulnerable to the fluctuations of energy prices - the poor.
From the same interview in 'American Gas":
The Low-Income Home Energy Assistance Program (LIHEAP) provides heating and cooling bill payment assistance to low- and fixed-income energy consumers, most of whom have annual incomes of $10,000 or less. Every year, due to budget pressures, LIHEAP comes under heavy scrutiny, yet the recent colder-than-normal weather in much of the country, combined with higher natural gas prices, have significantly increased the number of Americans in need of help. In fact, only one in seven people who qualify for LIHEAP is receiving it, pointing to a clear need for more funding. What steps would you take to alleviate this disparity?
It's going to be a long, cold winter.