WHY ARE NATURAL GAS PRICES SO LOW?
If you’re searching for a natural gas provider then you’re likely considering natural gas prices and may be curious about what makes the fuel such an affordable option. Natural gas prices have been cut in half over the last six years, and prices are anticipated to remain comparatively low for years to come. According to energy industry data and information specialist, IHS, and their 2014 industry study, natural gas prices are likely to stay low at least for the next 20 years. For those that are currently using natural gas this is good news. Low forecasted gas rates also provide an incentive to make the switch to natural gas for those that are considering conversion.
There are a handful of factors that contribute to the low prices. The most significant factor is America’s abundant supply, combined with very efficient extraction techniques. The nation’s existing, and forecasted, supply of natural gas will not only meet our current needs, but also the anticipated growth in demand. Demand is expected to increase into the future, particularly on the commercial side in the industrial and electrical power sectors. Although natural gas production comes from a variety of locations, the Marcellus shale deposit is currently one of the most significant contributors. The Marcellus Formation is a unit of marine sedimentary rock found in eastern North America.
Another factor affecting our nation’s supply of natural gas revolves around current export laws. Government regulations place export restrictions on natural gas, which contributes to the abundant supply within the U.S. These regulations are driven by a variety of political and industrial influences. Those that support regulation believe, in part, that exporting would lead to higher prices. It can be argued, however, that the supply is so abundant that prices could remain low, even with more export.
Consumer demand also plays a role in cost. At the moment consumers only account for about 20% of the natural gas consumption in the U.S. Power plants and industrial use account for the majority. This is in contrast to the high consumer demand for oil. Although consumers may eventually use more in the near future, the abundant supply is forecasted to meet this demand.
Forecasting natural gas use and cost is part of Realgy’s daily business. We can help position your company to benefit from changes in natural gas pricing now and in the future.
Realgy Energy Services is a registered Retail Energy Marketer in the states of Illinois, Michigan and Indiana. We offer Service Plans that will provide electric and natural gas at wholesale pricing direct to customers without any utility markup. Our Service Plans work with the local utility to provide seamless service and annual savings. Additional information: www.realgyenergyservices.com
John Deere Slowdown
FINDING SAVINGS IN QUAD CITIES AMIDST SLOW ECONOMY
Over the past several months John Deere has been forced to layoff hundreds of employees, including the most recent round of 910 from their Illinois, and Iowa facilities. This comes on the heels of relatively abundant hiring over the past few years. Although experts close to the situation feel that this news does not necessarily indicate that the company is falling behind, the Quad Cities economy is feeling the pinch.
Economic cycles bring highs and lows. During the low points, as we’re experiencing now, the affects can reach a variety of business types. The results have a ripple effect, causing loss of business to local banks, healthcare establishments, local suppliers, etc.
When the economy turns, businesses look for ways to save. For those located on the Illinois side of the Quad Cities, electric choice provides the opportunity for businesses to choose an alternative energy supplier for their electricity. This means that they are no longer locked into the rate charged by the utility. Electric choice allows direct purchasing of electricity without additional costs from MidAmerican, Ill. The result is savings for businesses.
Realgy Energy Services provides electricity savings to businesses across the Quad Cities in the MidAmerican, Illinois service area – savings of 6% for our average customer. As a result, well-known businesses, and many municipalities including, East Moline, Rock Island, Andover, Hampton, Rapids City, and Milan, among others, have chosen or are getting approval for Realgy to become their electricity provider. Electricity services are not yet available in this market for residential clients.
When it comes to offering savings for businesses, Realgy is an innovator of plans that lead to costs savings. We have programs in place that assess, in detail, the electricity usage of the marketplace. We’ve been analyzing the MidAtlantic market for over a year. We apply these learning’s to the particular usage needs of our business clients. The result is a plan designed to help businesses take advantage of the most cost effective fee structure available.
As businesses in the Quad Cities, and beyond, continue to deal with the affects of a slower economy, it can be nice to know that there are options available to help improve the bottom line. Electricity, for a large or small business, can be a significant cost factor. When these costs can be reduced businesses start to see the affect.
Realgy Energy Services is a registered Retail Energy Marketer in the states of Illinois, Michigan and Indiana. We offer Service Plans that will provide electric and natural gas at wholesale pricing direct to customers without any utility markup. Our Service Plans work with the local utility to provide seamless service and annual savings. Additional information; www.realgyenergyservices.com
February 2015: Tied for Coldest February on Record
Chicago and the Tri-State area experienced a record cold February 2015 to go along with a very cold winter.
One more month and the winter of 2014/15 will be over and we can tally up the final score.
http://www.crh.noaa.gov/images/lot/15winter_CHI.png
Energy Choices Begin with a Choice
Energy comes in many forms; wood, oil, solar, natural gas, propane, etc. With each choice comes the benefits and the costs of delivering those benefits.
Looking at natural gas, it is generally transported from one of three sources; Louisiana Gulf Coast, Oklahoma/Texas panhandle and recently shale gas in Texas, North Dakota and Pennsylvania.
It takes pipelines to carry the natural gas to where the people use the gas. The link below underscores some of the concerns in constructing new pipelines or expanding others; environmental (is it good for people), property rights, ecology (is it good for the all life on the planet) and cost.
Question: are you willing to support new or expanded pipelines for natural gas?
This question (along with many others) will influence what energy choices we have in the future.
In 10 years, your job probably won’t exist
Happy New Year, the future continues!
So with that in mind, here is an interesting question…will your job (career) exist in 10 years, how about 20?
Change is relentless and with the new comes obsolescence.
In energy, the prediction has been that solar will continue to advance in price and efficiency. While this is true, other technology is not standing still.
· The internal combustion engine (cars, trucks, buses, electric generation) is getting more efficient. The US Government has set the average fleet MPG at over 50 within the next 15 years. Currently, it is around 30 MPG.
· Light bulbs have radically changed, such that the incandescent is no longer available. The average LED light bulb will operate continuously for 5 years and would consume less energy over those 5 years than 1 incandescent light bulb operating for just 6 months. In the US, adoption to all LED light bulbs could eliminate the need for over 80 coal fired power plants.
· Of course, fracking has changed the landscape of the oil industry and has cut US importing oil by nearly 30% over the last 5 years.
So change touches us all. It’s exciting to forecast into the future and equally exciting to see it be wrong and right!
Cheers to change.
by David Tuffley a lecturer in applied ethics and socio-technical Studies at Griffith University
Natural Gas Collapses – “This is Panic Selling”
Panic is usually not a “good” thing. But, panic can be used to highlight extremes.
Last winter (2013); “Polar Vortex” came into most people’s vocabulary. Bitter cold extended over most of the continental United States. The result: a panic to higher spot price for natural gas. Recall supply and demand. The panic occurred due to “bottlenecks” in supplying natural gas and electricity.
This winter (2014) began yesterday (December 21, 2014) and the panic has resulted in natural gas prices dropping about 35% since end of Nov 2014. The reason: it’s not as cold as expected and the forecast is about Normal or average winter cold. So traders sold their position in natural gas (the NYMEX futures).
Volatility of natural gas is nothing new. So, if you are an end-user, what should you do? Look ahead…
1. If you didn’t already, think about locking in your Feb and Mar 2015 price. Recall the old adage; Hogs get slaughter, pigs live on.
2. Do not lock in a long term (beyond 6 months). Summer prices have not moved as much as this winters.
3. Talk with your supplier about what this means for your 2015 budget.
Do not think like a trader and try to buy at the bottom; the reasons are many and the benefits are few (compared to the downside). Instead, look at what this means to your budget and plan accordingly.
Realgy is a full-service energy provider and would appreciate an opportunity to speak with you about your energy needs.
http://www.cnbc.com/id/102289402
How to Get a Good Deal from an Energy Marketer
I am often asked how to get a “good deal” in choosing an energy supplier?
In the past, my answer typically began with an explanation of how “deregulation” or “customer choice” developed (which gets me glassy-eyed looks), which was followed by general advice such as: determine the quality of supplier; review the terms and conditions and then the pricing.
However, as we are having renewals with our customers reoccurring for the 4th, 5th and 6th time, I think what these customers have told me is more relevant….
In addition, during our 12+ years we seen many, many processes from consultants, aggregators or in request for proposals, I have consolidated these experiences into what I believe is a list of best practices;
1. Assemble a copy of all your bills (either electric or gas) including the following (this will help you eliminate or question what a marketer sends you in step 2).
a. Identify the energy cost on the bill(s).
b. Identify the delivery cost on the bill(s).
c. Add up the total energy used (either kwh for electric or Therms for natural gas) for 1-12 months, pairing each month with the energy cost (the delivery cost will not change).
2. Contact marketers and ask them for a proposal for service.
a. A list is available at: http://realgyenergyservices.com/customer-services/web-links/ under each utility.
b. Eliminate the ones who do not reply.
c. For ones who reply, ask for a comparison for at least the last 12 months of how their proposal price compared to the utility cost. Again, eliminate those who do not respond.
d. Look at how the marketer’s pricing and the utility pricing are presented.
IN MANY CASES marketers may be above a utility in some months; they should be able to explain why.
AVOID those that are above the utility for 12 months in a row.
AVOID those marketers whose comparison does not accurately show the utility cost.
3. With the marketers who responded and sent you their pricing comparison, ask for their terms and conditions (contract or Agreement). Read their agreements paying special attention to the following;
a. Pricing; is it defined, how long does it last, and what happens when it ends?
b. Quantity; if you’re buying a fixed price make sure it says how much gas you’re buying at the fixed price and what happens if you use more or less than that amount. If you’re buying a variable rate, it should state it’s for all your usage or “open” quality.
c. Renewal; when do you have to give notice to terminate, what happens if you don’t?
d. Additional Services: is storage included, what about changing plans (from variable to fixed), taxes, service fee, online access, answered customer service (vs. automated attendants), etc. Some additional service is worth the price, some are not.
While not an official step, there are good reasons to eliminate a marketer from consideration (in other words, absolutely avoid), such reasons include;
a. No trade references or BBB accreditation.
b. An initial rate (fixed or variable) that lasts only 1-6 months and renews which is followed by a different (perhaps) vaguely defined price. These are known as “teaser” rates and will inevitably cost you more than the utility.
c. Language that doesn’t make sense is not clear in its intent or clearly favors the marketer.
d. A renewal date scheduled during the winter or summer. Make sure you can terminate your agreement for natural gas or electricity in April or May. This will give you the best period to switch or renew during a “low” energy usage period when pricing is more stable and you will not be under pressure to continue the agreement.
Natural gas prices have changed 25% in 4 weeks!
Does the words “Polar Vortex” strike fear into you?
If so, this CNBC article, Wild ride for natural gas signals volatile winter ahead, describes record production of natural gas and the forecast of colder weather similar to last winter.
So, the winter forecast is cold and there is abundant natural gas…..the question is at what price.
To avoid the uncertainty of winter gas prices Realgy offers:
Storage service’ “Winter gas at Summer prices” and PriceWatchTM (fixed price)
Please contact our Customer Service department for additional information at 877-300-6747 x1000
Read the whole CNBC article “Wild ride for natural gas signals volatile winter ahead”
Tell Ameren to open up their natural gas service to Customer Choice
So Ameren wants you to believe that you are paying a “low” “stable” price for your natural gas. Well, if you compare their cost to the entire United States, they may have a point.
However, if you compare to your neighbor or local supplier you are paying more. That is; if your neighbor or business is with Realgy Energy Services.
Ameren is trying to retain its regulated monopoly position in natural gas by putting out these press releases saying; “we are AVERAGE!”.
So compare what happened in Illinois when electricity was opened to customer choice: the State of Illinois has saved $37 billion with Energy Choice; that’s compared to what you would have paid by staying with the utility (like Ameren, COMED, Peoples, etc).
Specifically Realgy Energy Services customers over the last 36 months have saved over 14.7% compared to Ameren; that is over $889.00.
Let them know you want the same choice for natural gas as you have for electricity. ICC contact info: Torsten Clausen, Director tclausen@icc.illinois.gov
So as Ameren promotes being average in the USA, you can look to be better and tell Ameren to open up their natural gas service to Customer Choice.
Read the full Ameren Media Release, “Ameren Illinois Customers will see natural gas prices lower than national average for a second year“
US predicts lower heating bills this winter
US as a whole may have lower heating bills, however, in the article details the Midwest; Illinois, Indiana and Michigan are forecasted to have a colder than average winter.
Frosty is coming to Town!
Find the full abc news article, “US Predicts Lower Heating Bills This Winter”