The Wall Street Journal gives us this headline in the print edition: "Companies Give Away Shale Gas In Texas." Online, it's In Booming Oilfield, Natural Gas Can Be Free. (Alternate link.) Here's a three paragraph excerpt that sums it up:
American energy companies have spent billions of dollars in the past decade exploring for natural gas. But in parts of Texas and New Mexico, there is now so much of it that it is sometimes worthless. Some companies have even had to pay buyers to take it away.
Shale drillers in the Permian Basin are producing vast amounts of gas as a byproduct of prospecting for oil. But there aren’t enough pipelines to take all the gas to market, causing some of it to become landlocked, and sending local prices into free fall.
Gas prices in parts of the prolific region hovered near zero last month and some trades went negative, to as low as a negative 25 cents per million British thermal units, according to S&P Global Platts. The price-reporting agency said it was the first time on record that gas traded for less than zero at the Waha hub in West Texas. While prices have since ticked up, averaging $1.68 per million British thermal units for the four weeks through Dec. 21, that is still 40% of the $4.20 per million British thermal units that gas has fetched in that time at the main U.S. benchmark, Henry Hub in Louisiana.
Wow! Paying customers to take the product -- that's no way to make a buck.
If only the utility companies that use natural gas to produce energy would pass their savings on to their customers.
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2:35 PM 12/29/2018
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