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Natural Gas: Where Endless Money Went to Die

Testosterone Pit -- The fiasco that is playing out in the natural gas industry doesn’t happen often in a free market, and when it does happen, it’s usually short—and brutal for all involved: namely, prices that are way below production costs.

But the money has dried up. And drilling for natural gas is collapsing.

The breakeven price for natural gas.. over $8 per million Btu ..The current price of $2.53 per million Btu

There are consequences. Power generators, having switched massively from coal to natural gas, are driving up demand.

At $2.53 per million Btu at the Henry Hub, the price of natural gas is up 33% from the April low of $1.90 per million Btu—a number not seen in a decade. But even if it doubled, it would still be below the cost of production. And if it tripled, it might still be below the cost

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Submitted Jun 21, 2012 By: ccf_jeff

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MidNJ Champion Author New Jersey Posts:7,536 Points:1,169,685 Joined:Sep 2009	Message Posted: Nov 27, 2012 8:49:55 PM Ignore MidNJ Report Abuse This article is from "TESTOSTERONE PIT" ? Interesting, very very interesting!
sparky808 Champion Author Honolulu Posts:2,981 Points:594,810 Joined:Sep 2011	Message Posted: Jun 22, 2012 12:37:34 PM Ignore sparky808 Report Abuse Thank you for posting.
dave27johnson Champion Author Chicago Posts:1,784 Points:404,915 Joined:Feb 2012	Message Posted: Jun 22, 2012 3:01:22 AM Ignore dave27johnson Report Abuse Natural gas is only a fiasco for speculators - not the users.
katmandue Champion Author Detroit Posts:8,051 Points:2,130,120 Joined:Jul 2006	Message Posted: Jun 21, 2012 5:02:01 PM Ignore katmandue Report Abuse Not to worry speculators will find a way to drive up the price.
sydb7 Champion Author Atlanta Posts:3,542 Points:1,916,730 Joined:Mar 2003	Message Posted: Jun 21, 2012 3:41:24 PM Ignore sydb7 Report Abuse I can't see how they are losing money! The cost of my heating bill never went down!!
evowner Champion Author Salem Posts:2,161 Points:355,260 Joined:May 2012	Message Posted: Jun 21, 2012 3:33:22 PM Ignore evowner Report Abuse We're supposed to be happy that the price of natural gas is below cost of production? What cost of production? If fracking is too expensive then stop it.
myambro Champion Author Sacramento Posts:3,194 Points:1,049,375 Joined:Mar 2005	Message Posted: Jun 21, 2012 3:20:50 PM Ignore myambro Report Abuse I guess the consensus is that it is (Pres.) Bush's fault and (Pres.) Obama is doing nothing but make it worse.
teegeesp All-Star Author Madison Posts:880 Points:600,000 Joined:Sep 2010	Message Posted: Jun 21, 2012 3:04:30 PM Ignore teegeesp Report Abuse ok
humancry Champion Author Michigan Posts:4,618 Points:1,002,455 Joined:Nov 2006	Message Posted: Jun 21, 2012 2:57:40 PM Ignore humancry Report Abuse OK
gils Champion Author Ohio Posts:1,691 Points:642,625 Joined:Feb 2011	Message Posted: Jun 21, 2012 2:55:44 PM Ignore gils Report Abuse ok
1mrtym Veteran Author Houston Posts:457 Points:92,475 Joined:Mar 2012	Message Posted: Jun 21, 2012 2:55:09 PM Ignore 1mrtym Report Abuse ok
TheThorn All-Star Author South Carolina Posts:812 Points:782,175 Joined:Sep 2008	Message Posted: Jun 21, 2012 2:52:42 PM Ignore TheThorn Report Abuse just wait. once demand increases as this 'cheap' fuel source is pursued the price will return with a vengeance. just let us have a cold winter this year and see what happens.
RAE344 Champion Author Virginia Beach Posts:3,044 Points:657,520 Joined:Jun 2011	Message Posted: Jun 21, 2012 2:52:08 PM Ignore RAE344 Report Abuse When the car industy start making CNG cars on a large scale, it natural gas industry will come back.
netman044 Champion Author Texas Posts:6,848 Points:1,287,525 Joined:Sep 2005	Message Posted: Jun 21, 2012 2:48:21 PM Ignore netman044 Report Abuse Still the cheapest fuel available on a cost/btu basis.
brian314159 Rookie Author Indiana Posts:30 Points:407,100 Joined:Sep 2011	Message Posted: Jun 21, 2012 2:44:53 PM Ignore brian314159 Report Abuse ...and when the price goes up, that will spur innovation, which will provide an alternative. The beauty of the free market system!
LtRTH Champion Author St. Louis Posts:1,757 Points:581,645 Joined:May 2011	Message Posted: Jun 21, 2012 2:39:48 PM Ignore LtRTH Report Abuse As demand goes up, so will the price. It will all balance out in the end.
SavinOnFuel Champion Author Gary Posts:1,966 Points:1,255,285 Joined:Nov 2007	Message Posted: Jun 21, 2012 2:38:49 PM Ignore SavinOnFuel Report Abuse Well, this is one take...
DJRIO Champion Author Miami Posts:8,025 Points:1,421,585 Joined:Jan 2008	Message Posted: Jun 21, 2012 2:38:38 PM Ignore DJRIO Report Abuse and it alot cleaner too. not to mention a alternative to oil in transportion
regasaz Champion Author Phoenix Posts:5,775 Points:1,279,380 Joined:Dec 2006	Message Posted: Jun 21, 2012 2:37:27 PM Ignore regasaz Report Abuse Prices will eventually settle out.........
imforgiven Champion Author North Carolina Posts:1,634 Points:537,155 Joined:Oct 2008	Message Posted: Jun 21, 2012 2:37:10 PM Ignore imforgiven Report Abuse Okay.
camusblowers Rookie Author Idaho Posts:27 Points:3,630 Joined:May 2012	Message Posted: Jun 21, 2012 2:36:29 PM Ignore camusblowers Report Abuse fascinating
sabob Champion Author Pennsylvania Posts:12,463 Points:1,124,270 Joined:Dec 2008	Message Posted: Jun 21, 2012 2:35:44 PM Ignore sabob Report Abuse I would like to hear another version of the story as they're still drillin in the Marcellus shale region
Go_E85 Champion Author Orange County Posts:2,209 Points:173,805 Joined:Dec 2007	Message Posted: Jun 21, 2012 2:34:39 PM Ignore Go_E85 Report Abuse ...
bowler300MO Champion Author Missouri Posts:1,983 Points:868,765 Joined:Mar 2010	Message Posted: Jun 21, 2012 2:32:36 PM Ignore bowler300MO Report Abuse common sense
caddilac Champion Author Ontario Posts:16,582 Points:2,136,455 Joined:Apr 2007	Message Posted: Jun 21, 2012 2:32:35 PM Ignore caddilac Report Abuse Interesting.
TXryder Champion Author Texas Posts:2,686 Points:428,730 Joined:Jan 2012	Message Posted: Jun 21, 2012 2:31:07 PM Ignore TXryder Report Abuse nothing lasts forever
pulpwood Champion Author Mississippi Posts:7,379 Points:1,859,605 Joined:Sep 2006	Message Posted: Jun 21, 2012 2:26:58 PM Ignore pulpwood Report Abuse It failed in the eighties.
BobbyVA Champion Author Virginia Beach Posts:5,487 Points:1,172,525 Joined:Jul 2009	Message Posted: Jun 21, 2012 2:25:46 PM Ignore BobbyVA Report Abuse This is a story about the Obama Administration killing off T. Boone Pickens and his nat/gas theory. This group in the W/H is so anti- business anything that may make money is hated by the group in power who are trying to drive the USA down and out.
fireless1 Champion Author Atlanta Posts:2,147 Points:534,765 Joined:Dec 2010	Message Posted: Jun 21, 2012 2:23:47 PM Ignore fireless1 Report Abuse Ok
Eugene_C Champion Author Columbus Posts:2,299 Points:155,995 Joined:Mar 2004	Message Posted: Jun 21, 2012 2:22:48 PM Ignore Eugene_C Report Abuse What?
bonzoonfmb Champion Author Florida Posts:1,767 Points:640,910 Joined:Feb 2010	Message Posted: Jun 21, 2012 2:22:02 PM Ignore bonzoonfmb Report Abuse Going to have to wait until the demand then the prices go up.
honkerman Champion Author San Jose Posts:44,171 Points:2,393,095 Joined:Jul 2004	Message Posted: Jun 21, 2012 2:18:05 PM Ignore honkerman Report Abuse Confusion in the midst of chaos.
JimL1 Champion Author Phoenix Posts:8,201 Points:1,239,245 Joined:Jul 2003	Message Posted: Jun 21, 2012 2:16:31 PM Ignore JimL1 Report Abuse Whose press release is this?
THX138 Champion Author San Francisco Posts:2,544 Points:1,010,985 Joined:Apr 2010	Message Posted: Jun 21, 2012 2:14:56 PM Ignore THX138 Report Abuse More Bush legacy!
AcuraTSX Champion Author Ohio Posts:5,472 Points:2,178,130 Joined:Dec 2005	Message Posted: Jun 21, 2012 2:14:54 PM Ignore AcuraTSX Report Abuse My bill was down this winter.
Tommy4Wheel Champion Author Wilmington Posts:32,881 Points:3,101,570 Joined:Apr 2004	Message Posted: Jun 21, 2012 2:13:56 PM Ignore Tommy4Wheel Report Abuse Obama's Fault!
tsgasprc Champion Author Colorado Posts:1,312 Points:359,840 Joined:Jun 2010	Message Posted: Jun 21, 2012 2:08:22 PM Ignore tsgasprc Report Abuse They're sending it to Japan too.
nauzad Champion Author Las Vegas Posts:1,004 Points:282,955 Joined:Mar 2010	Message Posted: Jun 21, 2012 2:08:11 PM Ignore nauzad Report Abuse ok
GreenLegend Champion Author Raleigh Posts:1,640 Points:398,385 Joined:Jan 2009	Message Posted: Jun 21, 2012 2:08:03 PM Ignore GreenLegend Report Abuse Create more demand for natural gas!!! More NG cars, NG filling stations etc. Let's use OUR OWN natural gas resources! Down with OPEC!
Clayton2000 Champion Author South Carolina Posts:2,389 Points:486,205 Joined:Oct 2008	Message Posted: Jun 21, 2012 2:07:10 PM Ignore Clayton2000 Report Abuse ok
grandamgt1 Champion Author Illinois Posts:2,331 Points:1,237,400 Joined:Apr 2008	Message Posted: Jun 21, 2012 1:59:20 PM Ignore grandamgt1 Report Abuse The problem isn't supply. The problem is distribution, usability, and marketing.
boatmen Champion Author New York Posts:3,065 Points:620,305 Joined:Jan 2011	Message Posted: Jun 21, 2012 1:59:11 PM Ignore boatmen Report Abuse ouch
yvonneIL Champion Author Chicago Posts:3,699 Points:734,125 Joined:Apr 2011	Message Posted: Jun 21, 2012 1:58:59 PM Ignore yvonneIL Report Abuse ok
PettyEddie2012 Champion Author New York City Posts:1,724 Points:345,365 Joined:May 2012	Message Posted: Jun 21, 2012 1:58:20 PM Ignore PettyEddie2012 Report Abuse I love it when money goes into a pit, as it benefits consumers. Look at the airlines, a giant money sucking business (reverse robin hood, taking money from rich and benefiting the poor) which gives consumers rock bottom prices.
checkitnow Champion Author Atlanta Posts:2,021 Points:568,545 Joined:Aug 2010	Message Posted: Jun 21, 2012 1:55:33 PM Ignore checkitnow Report Abuse supply and demand, econ 101
Liberty2000 Champion Author Indianapolis Posts:1,739 Points:280,520 Joined:Jun 2007	Message Posted: Jun 21, 2012 1:52:15 PM Ignore Liberty2000 Report Abuse We'll see if my monthly gas bill goes down!
Fitwit Champion Author Stockton Posts:6,382 Points:1,352,705 Joined:May 2009	Message Posted: Jun 21, 2012 1:44:57 PM Ignore Fitwit Report Abuse To Life!
rodzilla123 Champion Author San Diego Posts:4,380 Points:1,030,365 Joined:Jul 2008	Message Posted: Jun 21, 2012 1:43:15 PM Ignore rodzilla123 Report Abuse The price of Natural Gas may be low, but if it goes up a lot then demand will slide while consumers look for cheeper energy.
tarheelcoastie Champion Author Greensboro Posts:5,176 Points:1,107,155 Joined:Jan 2009	Message Posted: Jun 21, 2012 1:41:05 PM Ignore tarheelcoastie Report Abuse malarkey! what a rag!
dong1971 All-Star Author Vancouver Posts:660 Points:216,390 Joined:May 2012	Message Posted: Jun 21, 2012 1:40:51 PM Ignore dong1971 Report Abuse ok