GASSED: Natural Gas Prices May Remain High - Shortages Lingergreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Feb 14, 2001 GASSED: Natural Gas Prices May Remain High - Shortages Linger By D. FORREST CAMERON Editor and Publisher
Oklahoma is one of the leading natural gas producing states in the nation. Despite this fact, natural gas prices are rising here just as fast as elsewhere. Tulsa-based energy consultant Wayne E. Swearingen explains that Oklahoma currently has abundant sources of natural gas. "The problem is that we export about 70 to 75 percent of our supplies. We do not have the right to keep the supplies in Oklahoma when the gas is shipped through interstate pipelines. We have no control over interstate commerce." The overall demand nationally and worldwide is putting a strain on all natural gas production, and prices are rising worldwide. Roger Mitchell, Manager of Communications for Oklahoma Natural Gas Company, says that natural gas prices are set nationally at the New York Stock Exchange, as are other commodity prices. He says, "The prices are affected by supply and demand." In simple terms, costs are rising as demand increases and supplies hold steady and even decline. The cold winter has contributed to the increase in demand for the product. Swearingen adds that he has been predicting the higher prices for years. "We have finally reached a new paradigm," he says. "We have been running out of excessive producing capacity for years. Natural gas supplies are dangerously low in the United States." Both Swearingen and Mitchell lament the lack of supply. Mitchell comments, "There is not enough drilling activity in Oklahoma, Texas, and Kansas to add supply reserves. We have reached the point where the 'gas bubble' is now gone." The higher prices have taken many observers by surprise. Swearingen mentions the American Gas Association's long-running marketing program as giving Americans a false sense of security. "Their campaign has been saying for years that we have abundant reserves at reasonable prices.
-- Tess (firstname.lastname@example.org), February 14, 2001