Yesterday FERC released their annual State of the Markets report, which I’ve talked about before. The full report is available here:
Keeping in mind PennEast’s avowed purpose and need, here are some facts FERC found for 2016:
- 2016 saw record low natural gas prices
- 2016 also saw near record low electricity prices
- While natural gas production dropped, demand was met anyway
- Renewables account for majority of electric generation capacity add-ons
- In our region, Transco Zone-6 NYC fell all the way to 32 cents. The average for the nation was $2.48 for comparison
- Natural gas exports continued to grow. The vast majority was pipeline exports to Mexico. The rest is a small market in LNG export, averaging .635 billion cubic feet/day in exports.
- Natural gas storage reached record highs for the 2nd year in a row e.g. we’re producing too much gas so they have to store it somewhere for later use during peak periods.
- In our electric region, PJM, prices fell 47%.
The key take away here is this: all of this happened without PennEast. We are literally hitting a floor in prices at this point. If commodity prices drop any lower, it will be uneconomic for drillers to actually keep on drilling.
When people tell you “we need PennEast”, show them this report, and when they’re done reading it, ask them if they’re opinion has changed. I’ll bet it will.