Near Future Looks Good for Natural Gas Prices

Article excerpt

IRVING, Texas -- A cold winter and low supply of stored natural gas may combine to heat up prices, possibly bringing good news to an industry hampered by lukewarm rates.

Storage levels of natural gas are at their lowest since the American Gas Association began tracking statistics three years ago, with 66 percent capacity at the beginning of the year, dropping to only 18 percent as of April 19.

That may be good news for the natural gas industry where pricing can be influenced by available supply. But it could mean higher prices for consumers.

"It helped a lot that the winter was so bad and storage was depleted," said Diane Kaufman with Dallas-based Enserch Corp., an integrated natural gas company.

This winter, the coldest in a decade, pushed natural gas prices to $2.10 per thousand cubic feet, up from $1.65 a year earlier.

Natural gas is used year round, but primarily in heating, so gas producers count on winter to generate their biggest sales. But to have an adequate supply during demand, natural gas is pumped year- round into storage facilities and held for the peak periods.

The gas is usually stored between April and November when traditionally prices dip because there is less need.

Since storage is so depleted this year, replenishing supplies is expected to keep prices up this summer.

"People who are heating with natural gas will have to pay more on their utility bills. That's always a problem," said Carol Biedrzycki, executive director of the Texas Ratepayers' Organization To Save Energy.

Also, consumers could see the price reflected in their electric bill.

"We're using natural gas more and more to generate electricity," Biedrzycki said. "An increase in natural gas prices is also going to cause an increase in electricity prices."

For many years, natural gas prices were set low by the federal government to encourage people to use it because it is kinder to the environment. …