Price of natural gas rising steadily

While oil prices continue to fluctuate, the price of natural gas has risen at a relatively steady rate since the beginning of March. Nevertheless, natural gas is likely to maintain its current competitive advantage over coal when it comes to the production of electricity. Why? Gas emits about half the amount of carbon dioxide as coal. This fact has helped reduce U.S. carbon dioxide emissions to levels that are 21 percent below those produced in 2005.

Recognizing this fact, the EPA has promulgated new rules that have substantially added to the cost of burning coal to produce electricity. And as gas prices move higher, gas exploration and production companies in the Appalachian basin will put more rigs back to work, keeping the price of natural gas from moving too high, thus continuing the advantage of natural gas fired plants over coal plants.

In a recent article for the Pittsburgh Post-Gazette, Jonathan Crawford describes in detail how coal fired plants are being replaced by gas fired plants.

See the chart below for today’s energy commodity prices.

ENERGY COMMODITY PRICES
	As of 7/18/16*	52 week low	52 week high
Heating Oil $/gallon	1.38	0.85	1.70
Oil (Light Crude) $/barrel	45.37	26.05	51.67
Natural Gas $/million BTUs	2.76	1.61	3.00
Unleaded Gasoline $/gallon	1.40	0.90	1.94
PJM Electricity (Nymex)	43.41	–	–

 

 

 

 

 

 

 

* Last update 12:11 p.m. ET