Natural gas prices suck $450 million from Wisconsin

Sunday, February 12, 2006

A story by Ben Fischer in the Wisconsin State Journal examines the volatility in natural gas prices. PSC chairman Dan Ebert discussed the impact on Wisconsin:

He pointed to estimates showing that higher natural gas prices alone have sucked an additional $450 million out of the Wisconsin economy this year. . . .

As far as public policy goes, experts agree that the days of strict government price controls are over, and the only surefire way to even out the market is to re-create the supply bubble, either by cutting demand or increasing stockpiles.

That's done either by slowing consumption through conservation, a theme Ebert hit on while promoting state legislation to increase spending on renewable energy and efficiency efforts.

An Associated Press story by Brad Foss adds an international view on natural gas prices and confirmation of "peak gas" in the U.S. and Canada:

Gradually, though, U.S. — and then Canadian — output began to taper off. Producers drilled many more wells, but still could not offset the depletion of existing wells while satisfying rising demand.

To bridge the gap, LNG imports tripled in the '90s, rising to 226 billion cubic feet per year by 2000. And they nearly tripled again by 2004, climbing to 652 billion cubic feet, or 3 percent of the country's total gas consumption.

But there is still not much of a supply cushion in the U.S. natural-gas market, which is a major reason why prices climbed steadily in recent years . . .