eia.gov’s Natural Gas Weekly report continues to be a thorn in the side of pipeline companies like PennEast.
Last week’s entry heralded a new era where we reached historical lows in natural gas prices on key regional hubs:
According to the report:
Responding to robust supply, mild temperatures, and low holiday demand, several trading locations in the Northeast and Mid-Atlantic regions set record low natural gas spot prices this past week, as prices fell well below $1 per million British thermal units (MMBtu) on July 2.
Following a cold and snowy winter, natural gas prices in the Northeast have been relatively low since April. Prices at Transcontinental Zone 6 New York (Transco Z6 NY) and Algonquin Citygate, with service to Boston, have averaged $2.43/MMBtu and $2.21/MMBtu, respectively, from April 1 through July 8. In New York, the average price over that period this year is 35% lower than the same period in 2014, and the average price in Boston is 50% lower this year compared to last year. Prices at the Algonquin Citygate reached a historic low on June 5, dropping to $1.19/MMBtu, and fell even lower, to 82¢/MMBtu, on July 2. Similarly, in New York, prices neared their historic low on June 5 at $1.38/MMBtu, and dropped to a record low 89¢/MMBtu on July 2. The July 2 spot price was for gas delivered July 3 through July 5 for the Fourth of July holiday weekend.
There are several factors contributing to the lower prices this year, including year-over-year growth in production, particularly from the Marcellus, and higher natural gas storage volumes.
Look at that, natural gas was 82 cents at the Boston gateway, and 89 cents at the NYC one. These numbers boggle the mind. Keep in mind that fracking companies need to sell their gas at about $4/MMBtu to generate a profit.
Take these numbers and plug them into PennEast’s Purpose and Need statements and you see, yet again, just how hollow PennEast’s words are.
There is literally no need for this pipeline in the region.