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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: energyplay who wrote (24231)	7/2/2003 2:14:50 AM
From: schrodingers_cat	Read Replies (1) \| Respond to of 206093

"shift of natural gas from industrial uses to electric generation." And swing or topping electricty made for natural gas will be much more sensitive to weather driven dmand than industrial uses. This will tend to make the price of NG more unstable than in previous years. TO survive in this more volitile price environment, E&P firms and drillers will need to reduce leverage and pay down debt. I think you're right about NG prices getting even more unstable than they are already. This may be a problem for producers, but I think it is an even bigger problem for customers. If you were trying to calculate the economics for a project that uses lots of NG, then what price are you going to use? $3? $6? $10? For generation the economics looked pretty good with NG at $2.25, but they are going to be pretty ugly at $5.50. There's a lot of ways to generate electricity, and if NG prices stay above $3 then coal, nukes, oil, hydro, wind etc are going to be making a big comeback. I don't think that the average residential heating consumer is going to be all that impressed either with a fuel whose price varies by a factor of 5. There's lots of alternative ways to heat houses too.