In Maine, natural gas fuels something between 2/3 and 3/4 of our electricity. The biomass power, I understand, is being exported out of state - probably so people in CT can say they are buying "green", even though a chunk of that "green" power is burning trash in my backyard.

[How does that work? This KW is green, that one is coal?]

Any chance Jean, that you can clean up the labels on the axes? Esp on "weekly Nat Gas price Feb 09 contract" it's a little hard to parse.

I'm surprised, by looking at that chart, that electric rates in Maine have been going up so much of late while the fuel is more or less stable since the increase in 06. Then again, anyone that's looked at a power bill since deregulation and can figure it out might tell me otherwise. I've cut my KW use close to half and not reduced my charges much over that period.

cfm in Gray, ME

Does anyone have a quick high-level breakdown of nat gas usage by demand type over time? electricity, heating, manufacturing feedstock?

I suspect that if this country does enact meaningful greenhouse gas emission controls, Nat gas demand would definitely increase for electricity production, which could be easier to switch-over than heating systems.

I'm just shooting from the hip here, but i figure that nat gas prices will generally stay the same for 2008, and will probably hoover in the $5 to $8 range for the whole year, UNLESS a hurricane takes out some infrastructure this summer, or a another war.

My guess is:

4)Between $10 and $12 per mcf

Canada will be using more and exporting less. LNG will come online for power plants, but cost a lot. Exploration and development will lag, because the price is not as high as it was.

Amaranth Advisors lost some $6.5 billion on natural gas bets gone wrong, but that hasn't stopped hedge funds from wagering $3 billion on the volatile commodity over the last 10 months, Bloomberg News reports. Citadel Investment Group, T. Boone Pickens and the Merchant Commodity fund are just some of the energy investors to pour money into the sector, expecting a big rebound. In fact, Citadel picked up some of Amaranth?s bad trades, which ConocoPhillips analyst Jim Duncan estimates could be in the money already.

'If you told me I had to go long or short today, I would go long,' Pickens told Bloomberg, which reports his hedge fund is up 120% this year. Experts expect a favorable turn for natural gas, with demand expected to rise 3% in the U.S. next year, coupled with tightening supplies worldwide.

Cheers

Where is this huge natural gas crisis everyone was talking about just a few years ago? (on this site and others) Oh I know, it's NEXT winter, not this winter, but NEXT.

http://www.fromthewilderness.com/free/ww3/062303_nat_gas_crisis.html

http://www.energypulse.net/centers/article/article_display.cfm?a_id=324

$10 to $15 range: If Dec consumption continues though the winter we could be much lower on storage in the spring than last spring. I expect that a hot summer will reduce storage ability for next heating season. We could go in with much lower gas in storage and have a big rise in prices next Dec.

When I voted there were only 3 votes.

My view is that as the rest of the world prepares for Peak NG, what with those fancy LNG terminals and all, those of us here in the US will continue to benefit from producers blowing down the NG caps off of oil fields where they have provided a great service by holding down on the oil saturation of the formation. After this, the oil depletion rates will get worse and we will have lost another valuable resource. I expect to see this come to a head in 2009, however, and that is when TSHTF with respect to domestic production. This, incidentally, is what has increased the production of NGPL's as well.

With respect to the number of wells and the production decline, I would make a further comment. A lot of those wells were drilled to tap coal seam gas production, which is increasingly going to thin-bed coal seams, and the production does not give the big burst of gas up front with those, but increases as the coal seam is de-watered and then peaks somewhere one to three years out with a much slower subsequent decline rate. In general, the success rate is much, much higher for these wells, they are generally shallower and the main problem is the de-watering which does not occur in conventional gas production. Also, other shallower gas wells tapping low BTU gas zones and treating the gas as a business practice has the effect of putting wells online which deplete quicker, but are again, lower risk.

As soon as the Jack # 2 is online with a 125+/- mile gas line from deep in the Gulf, we will have a better idea of what the price will be - and my guess on that is somewhere around five to ten years out. Likewise for the deep offshore Brazilian wells, if they decide to develop that stuff at all.

if one takes the top chart at face value, you would propably conclude that the price is headed up. ("marketed" production down while the # wells is rising). the caption just says production.
many producers are swing producers whether they want to be or not,restricted by pipeline pressure.

here is a blog titled " canadian natural gas vs lng"
http://www.theglobeandmail.com/blogs/wenergyblog0613

you may have to scroll down. according to this editorial, lng has a tendency to stabilize gas price here on the na continent.

anyhow, my guess is $8-$10 for ye08

One view on this is that
a) increased production from the Barnett shale
b) LNG imports
c) a US economic slowdown

will more than offset factors like decreased imports from Canada and will keep prices in check.

My vote is or $6 to $8/mcf.

With an active hurricane season such as 2005-06, however, my prediction moves to $10 - $12.

Gas storage has been above the 5 year average for several months due to 'a' and 'b', I think, plus recovery in the GOM from hurricanes. It just dropped below the 5 year average probably due to the recent cold weather. This may be an indication, as mentioned in an earlier post, of the fine line between a surplus and a shortage.

I'll go with #4, between $10 and $12, as over the long term, we will have to deal with peak natural gas. However, the problem with this question is that it in the short term it depends almost entirely on the weather. Colder winter weather and summer hurricanes will drive the price up, and absence of the same will drive it down.

Hm... not really an investor's perspective, but it looks to me like NG prices to consumers here in central Canada will have to soar next year, as the reduction in wells drilled translates to reduced supply. This winter appears to be relatively normal in central Canada -- meaning cold -- as opposed to last year's global warming special, so I expect storage will draw down rapidly, and the new wells that could fill 'er up again for winter 2008/09 have simply not been drilled.

In my part of Ontario I'd estimate 80% of residential heat is NG (While only 7% of electricity generation is). Since we are competing with tar sands and NAFTA commitments for a reduced NG supply, it seems that there will have to be a domestic NG supply crunch by next winter.

The only media about this seems to be in the financial and industrial press, and it's all very abstract and technical, with a focus on rig allocation -- no mention at all that it might connect up with how to keep the heat on next winter!

Since there is so little media interest in this, I can only think that I'm missing something obvious... maybe we'll be saved by coalbed methane or LNG imports? Maybe new wells can be brought on real fast next year?

I can't really see where nick-of-time solution is going to come from, but we can't really be so clueless that we would not see a supply crisis coming in a relatively simple and linear system like Canadian domestic NG... right?

More on gas and the gas-tar sands linkage:
http://www.aspo-usa.com/index.php?option=com_content&task=view&id=291&It...