Natural Gas: Peering into the future w/cracked crystal ball
Posted: Sun 30 Apr 2006, 10:58:23
Or maybe it's the supposed forecasters who are cracked. Natural gas economy is losing steam
They don't seem to get it. They know something is drastically wrong, but the only explanation they can imagine is some kind of conspiracy.
The idea that nature won't put more petroleum in the ground if you wave enough cash around seems to be completely beyond even the so-called experts.
The experts didn't have a clue. Worse, they're still clueless.On the brink of the 21st century, a group of energy experts peered into the future of natural gas, and what they saw was quite rosy -- and quite wrong. To satisfy growing demand, producers could crank out a third more natural gas over the next decade at "competitive prices." It could "power our economy" for decades beyond. Or so said the National Petroleum Council in its 1999 report.
But natural gas prices soon headed skyward, with prices charged by producers spiking late last year at nearly five times 1999 levels. This past winter, though starting off warm, saw the average gas-heating household spend a record $867, a 17 percent increase, according to federal data. As for that predicted robust supply, the country's annual gas output has strangely slipped by 3 percent over the past six years.
Something is broken in the economics of natural gas, say people inside and outside the industry. The bright dream of an economy built squarely on clean-burning natural gas is slowly deflating. Although we still derive almost a quarter of the country's energy from natural gas, its share will slip in coming decades, federal forecasters now say.
"What's going on now is so dysfunctional, it is really remarkable," says industry consultant Jim Choukas-Bradley.
They don't seem to get it. They know something is drastically wrong, but the only explanation they can imagine is some kind of conspiracy.
Despite their protests, maybe some producers aren't really trying, industry critics suspect. Maybe they're happy to take it easy and rake in record yearly profits. Many natural gas producers are the same companies benefiting from rocketing gasoline prices in recent years -- familiar petroleum names like Exxon Mobil, Chevron, Shell and BP.
...Some Midwestern cities are accusing producers of doing it by collusion. In an antitrust lawsuit, they suggest that producers have reached either a secret agreement or tacit understanding to bottle up production.
"I think the increase in prices is a designed thing," says Charles Wheatley, a lawyer for the 18 communities from Texas to Indiana suing five leading gas producers in federal court.
The idea that nature won't put more petroleum in the ground if you wave enough cash around seems to be completely beyond even the so-called experts.