PITTSBURGH — Wholesale natural gas prices have doubled during the last year, and that’s bringing sighs of relief from an unusual variety of interests.
Soaring production and an unusually warm winter sent prices plunging to under $2 per thousand cubic feet last spring, prompting some to wonder whether the natural gas boom would kill demand for both coal and new renewable energy.
But natural gas is now just over $4 per thousand cubic feet. Energy experts say prices in the $4 or $5 range won’t affect the increasing use of the fuel by consumers and industry since the price was $8 just a few years ago. In Europe and Asia prices are even higher — $10 to $14.
“I don’t think anyone in their right mind” thought $2 or $3 natural gas was here to stay, said Manuj Nikhanj, the head of Energy Research at ITG Investment Research, a worldwide financial firm based in New York. He added that current prices are still “pretty cheap.”
Gas drilling companies are obviously happy with the rising price, and so are leaseholders and states that get revenue based on the market price. But the coal industry and renewable energy advocates are cheering the news, too, since gas no longer has a huge price advantage over those other energy sources.
Some even suggest that at current prices both natural gas and renewables win.
“Ultimately in the long term, gas and renewables are really well paired,” said Christina Simeone, the director of PennFuture Energy Center, which is run by an environmental group.