By Vernon Trollinger

Natural Gas Powers Texas

According to the US Department of Energy, Texas produces and consumes more electricity than any other state. Over half of Texas’ energy comes from natural gas-powered generation plants. Texas produces 25% of the nation’s natural gas and is the largest producer; storing and supplying via pipeline for all regions of the country. Yet while Texas has large reserves of low grade coal, most of what is burned in its coal-fired plants is brought in via train from Wyoming and Montana.

So, it makes sense for Texas electric power generators to rely more on the supply of natural gas in our back yard rather than waiting for the next 10,000 tons of coal to roll in from Wyoming. It burns cleaner than coal and does not leave behind large amounts of cinder and ash that require proper disposal.

In the past, natural gas was usually uncovered when drilling for oil. Many middle eastern oil companies commonly used it to push oil out from deposits in the earth and then let the gas burn off (called “flaring”). This was because there was neither large local demand for natural gas, nor a way to safely transport it overseas to markets that wanted it.

In Texas, the practice was very different. Natural gas and oil have been twin commodities that helped build Texas. Natural gas pipelines stretch in all directions from Texas and it has long been used throughout the US for heat, light, and electrical generation. So, it’s little wonder that in this country its price has long been bound to oil, a commodity in a very volatile market where prices are often shaped by world events. For this reason, power generating companies have paid more for it than coal, nuclear, and wind. Because it is the most expensive and so heavily relied upon, the price of natural gas determines the price of electricity.

When the Wave Broke

Throughout 2007 and into 2008, petroleum and natural gas prices rose due to a popular tide of speculative investment. This drove resource development and innovation in natural gas technologies to bring gas reserves to market. Among these:

• The growing Liquified Natural Gas (LNG) trade is expected to increase at 6.7 percent per year until 2020. New fleets of inexpensively built ships and refineries expanded the industry worldwide. LNG now involves 15 exporting countries and 17 importing countries, including the US.

• Qatar announced its goal to develop both its Northfield natural gas reserve production (from roughly 54 billion cubic feet in 1995 to 2.7 trillion cubic feet in 2008) and its Gas-to-Liquids capacity. Qatar is now the world’s largest LNG exporter.

• Developments in horizontal drilling and rock fracturing techniques with high pressure water provide lower-cost access to several huge deposits of natural gas trapped in common shale. These include the Marcellus shale bed and the Barnett shale in Texas (much of it under Ft. Worth) – which has been estimated at holding 26 trillion cubic feet of natural gas and is producing 2 billion cubic feet per day.

In July, 2008, the petroleum/natural gas price wave peaked. Gasoline surged to over $4.00 per gallon and natural gas prices to $13.69 per billion BTU (mmBTU). The cost of Texas electricity exploded.

Inundated with high fuel prices, consumers all across America cut their travel and their energy use. In the fall of 2008, the economy contracted so severely that businesses laid off workers or closed. They stopped using natural gas to heat their buildings and stopped needing electricity to power their machinery. This helped drive down the price of oil, gasoline, and natural gas. But in the case of natural gas, the big developments in LNG supply and natural gas shale brought enormous amounts of natural gas out of the ground. Ready to use, it now lay idle in pipelines, tanks, and ships at sea. With plenty of supply but no demand, the price sank further.

One year after the price peak, the DOE’s EIA reported in its weekly natural gas storage report for August, 14, 2009:

“Working gas in storage was 3,204 Billion cubic feet (Bcf) as of Friday, August 14, 2009, according to EIA estimates… Stocks were 562 Bcf higher than last year at this time and 513 Bcf above the 5-year average of 2,691 Bcf.”

By September, 2009, natural gas lost over 80% of its July 2008 value and had plummeted to $2.409 per mmBTU. Texas electric rates fell as well.

Big Supply + Little Demand = Low Price

Because of booming US domestic supply, natural gas’ price tumble has decoupled it from oil’s price. As analyst Fadel Gheit put it, “[O]il is a global commodity; gas is a regional commodity. You can have a huge discrepancy in gas prices from country to country, from continent to continent, because of a lack of adequate transportation – the means of shipping to take gas from where it’s found in abundance to where it’s needed.”

As a regional commodity now, present US domestic natural gas prices are somewhat insulated versus shocks from international problems. New shale deposits being drilled throughout the lower 48 states provide a more stable supply and stable pricing. As a result, LNG imports to the US are dropping, prompting the United Nations International Energy Agency’s chief economist, Fatih Birol, to forecast a world-wide natural gas glut continuing through 2015.

In an interview with Bloomberg News, energy commodities analyst Stephen Schork painted this picture of the current supply: “We have more gas than we know what to do with in the U.S.; we have more waterborne gas floating around the world’s oceans that doesn’t have a home.”

When prices began their slide, many gas companies capped their wells and cut their production. The EIA recently reported in its Short Term Energy Outlook:

Total marketed production is estimated to have increased by 3.7 percent in 2009, despite a 59-percent decline in the working natural gas rig count from September 2008 to July 2009.

Even Qatar announced it will not pursue any new development in its North field reserve for another four years.

Right now, the two big drivers of US consumption are its winter and its economy. This winter, an early cold snap increased heating demands for much of the country and even caused a brief $1 price increase. Though faltering, the US economy has improved somewhat since September, 2008. Because of the slight contraction in productivity and the early cold weather, prices have risen from their September, 2009 low -but they are still 50% lower than their peak in 2008. The EIA statistic for the January 27, 2010 price at the Henry Hub in New York ($5.42 mmBTU) is 14% higher than the same date last year ($4.75).

The big new for 2010 is it’s still a buyer’s market. With storage levels still at 5 year highs, enhanced domestic production capabilities, and slow consumption growth, prices are not expected to rise dramatically through 2010. EIA projects that the price at the Henry Hub will increase to an average of $5.25 mmBTU in 2010, which is $1.27 more than the 2009 average of $3.98 mmBTU. Remember, this is an average price; seasonal increases will occur, especially during the summer cooling months in Texas when power demand is at its height.

For Texas electricity consumers, this means that energy prices will remain low through for the rest of the year, though there will be some fluctuation due to seasonal demand, as stated. However, one thing about the near future is certain: consumption of natural gas will increase as economic conditions improve. Businesses will need more people as they will get back to running equipment and machinery – and they will all use more energy. As consumption rises, more generators will burn natural gas to meet that need. Natural gas prices will rise. And so will the price of Texas electricity.

Long Term Solutions for the Texas Energy Consumer

The best thing an electricity consumer in Texas has right now is energy choice. If you sign on to a two year (24 month) plan now, you can lock in the current 2010 rate through 2012. Switching between now and spring when rates are low could save you hundreds of dollars over the next two years. Why? Because you can take advantage of a long term fixed energy plan that locks in the current low energy price. In the near future, the EIA projects that prices will increase in 2011, averaging $6.00 mmBTU as the existing surplus shrinks in the face of a rebounding economy. That’s a 13% increase in price. Right now, if your energy plan is locked in at.114 cent/kWh for 1500 kWh per month, you’re paying about $171/month. But in 2011 given a 13% average increase, your bill could jump to $193.23/month. That’s a difference of $22.23/month or $266.76 for the year.

To maximize your savings for these next two years, you need to act before mid-April because that’s when the price begins its annual increase for summer cooling costs. To find a long term plan that will help you save the most money, go to Bounce Energy and check out their Price Protector 24 plan. Qualified customers will receive movie tickets, bill credits, companion airline tickets, price reductions and more for paying their bill on-time!

Bounce Energy is a Texas Electric Company based in Houston. Bounce Energy’s goal is provide more than low Texas Electric Rates to our customers. With innovative and flexible plans, excellent customer service, and superior customer rewards, Bounce Energy offers a unique approach to Texas electricity.

Article Source: http://EzineArticles.com/?expert=Vernon_Trollinger
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By John Greyling

The reasons to choose a natural gas furnace vary from small and seemingly insignificant to obvious and undeniable. If you believe that this is the type of system that is right for you, now is the time to find out once and for all if it can really get the job done. To fully understand what one of these can do, you must first compare it to other options. This is the best way to decide if choosing a natural gas furnace is something that you will be happy with in the long run.

Options

When buying a natural gas furnace you have many options including a horizontal system, wall furnace to name a couple. Being spoiled for choice is a good thing; this gives you a chance to weigh up all the different options, leaving you with the best one suited to your needs.

Installation

Most homeowners find that installing a natural gas furnace system is not nearly as difficult as it sounds. And remember, if you are having a hard time figuring this out on your own you can always get a professional to finish off the job. There is nothing wrong with getting help from somebody who knows exactly what they are doing.

Price

When you compare the cost of a natural gas furnace to the competition you may begin to see that you can save a little bit of money. This is something that really perks up the ears of buyers. Saving money on the cost of a furnace is a very big deal. Remember to pay special attention to maintenance costs, as an initial cheap purchase could become very expensive in the long run.

Efficiency

With one of these systems you are going to get a furnace that is efficient. Again, this can help you save money as your monthly bill is going to be less when compared to other furnace options. It is important that you consider more than just the upfront cost. How much you will pay as the months go by is also very important, and high usage costs quickly add up over the months.

Natural Gas Works

Obviously, the main reason for buying any furnace is to heat your home. When you begin to rely on natural gas you will realize that this is not a problem in the slightest. In fact, most people find that one of these systems heats their home better than anything they have ever had in the past.

If you choose a natural gas furnace you are probably doing what is best for your home. As long as you compare this furnace option to others you can decide if what you are doing will benefit you in the long run.

John Greyling is a retired entrepreneur and businessman. During his career he acquired extensive experience in many business sectors. He now spends his time travelling the world with his family and writing. For more information on furnaces visit http://www.gas-furnace-reviews.net.

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Buying a new natural gas furnace is not simply a case of looking at natural gas furnace prices and choosing the cheapest model. there are many more factors that need to be taken into consideration as this short review article will point out.

1) How long will the new gas furnace need to last?

This may seem a strange first fact to consider but it does have a major impact on your choice of natural gas furnace. If you are planning to stay in your home for at least 10-15 years, then you need to buy a gas furnace heater that is of very good quality and reliability. This means that it will cost more than one of poorer quality – but it will be worth it in the long run.

If you only expect to stay in your home for a few years, then you may be better off choosing a lower quality natural gas furnace that will be adequate for the period until you sell your home. Spend too much and the new owner will reap the benefit of a higher quality gas furnace and you will not recoup the purchase price of the furnace in your selling price.

2) Get a gas furnace heater that is suitable for your home

Many people last winter discovered that their furnace was not up to the job of keeping their home adequately warm. To determine the size of gas furnace best suited to your family’s needs is not a simple calculation because it depends on several parameters – the size of property to be heated and the lowest temperatures that you expect the natural gas furnace to be able to cope with. You may want to consider getting a heating expert to advise you on the ideal size of gas furnace for your requirements.

3) Natural gas furnace efficiency

This is another parameter that many people do not consider as much as they should. Gas furnaces have a range of efficiencies. The higher the efficiency of the gas furnace, then the higher the price. Deciding what efficiency you should go for depends very much on your anticipaed natural gas bills over the period that you expect to use natural gas heater.

You need to consider how much the natural gas price will rise over the coming years. Will the extra money that you pay for a highly efficient natural gas furnace be recovered by the savings you will make by using less gas?

4) Spare parts, servicing and warranty

To get good value from a new natural gas furnace, you need to consider what your running costs will be. Is the furnace from a reputable manufacturer who is renowned for quality and provides a long warranty period? Are spare parts reasonably priced and likely to be easily available over the expected lifetime of your new gas furnace?

Is routine maintenance easy to perform and something that you can do yourself? Does the furnace come with a detailed service manual? How often does the manufacturer recommend servicing and will you need to call out a service engineer?

Many people ignore the costs of servicing and spare parts – but these are important factors in reaching a decision as to which is the best value natural gas furnace to buy.

5) Shop around for the best price

Obviously, before spending a large amount of money on a new natural gas furnace, you will want to make absolutely certain that you are buying one for the lowest possible price. Shop around and get quotations from at least 5 suppliers. Try playing one off against the other to see if you can get a better deal – maybe not just cash off the purchase price, but a longer warranty, or interest-free credit terms.

The current state of the economy means that most companies are very keen to sell their products and are prepared to haggle over price. use this to your advantage

Buying a new natural gas furnace can feel like a daunting task. Take your time and do thorough research. Only then will you be able to compare natural gas furnace prices properly to arrive at a purchasing decision.