US pushes ahead with renewables

Sep 12, 2021 News

…as Natural Gas soars to 13-year high

Kaieteur News – A Market Insider, Patti Domm, has contended in a CNBC editorial that the cost for the USA’s Natural gas has doubled but is also going up and projected to be the most expensive after 13 years for this winter.
According to Domm, 2008 was the peak year where gas prices were above $10/MMBtu. Nonetheless, 2021 could mark 13 years after which a similar fate might occur since the Futures Market Natural gas contract for October surpassed $5/MMBtu ever since February 2014.
The editorial was substantiated by Goldman Sachs Analysts who perceived that a winter that “is closer to or colder than a full standard-deviation from average would likely trigger a price spike to cause demand destruction with gas above $10/MMBtu.”
Domm also explained that this phenomenon could affect consumers’ bills for heating during winter, as well as electrical utilities and industrial production processes.
According to the editorial, low Natural gas supply has been fostered by 77.3 percent lower production in the Gulf of Mexico, as a result of Hurricane Ida.
In addition, it further denoted that the US’ Energy Information Administration (EIA) asserted that gas storage is lower than the five-year average by 7.4 percent and 16.8 percent lower than 2020’s level to date.
The situation is also exacerbated as John Kilduff, an Again Capital partner, validated from the editorial that prices raised markedly in the Northwest, as customers’ AC demand increased during heat waves this summer.
Consequently, the crucial summer injection period was undermined as less gas was stored for the winter period.
The editorial also highlighted that the US Government conjectured that 2021’s average Natural gas costs will be $4.69/MMBtu.
Meanwhile, Kilduff mentioned that the price can effortlessly incur US$6 and even leap to US$10 especially during an early season, cold winter outbreak. Moreover, Jack Fusco, Cheniere Energy’s CEO, corroborated that a US$5 gas price is equivalent to US$20 or more in Europe and Asia, as economies revamp due to increasing demands and as USA exports Natural gas.
Furthermore, Domm made clear that the culmination of increasing demand and less supply, has intrigued investors into Natural gas producers’ shares (inclusive of Cabot Oil and Gas, Range Resources, Antero Resources and EQT) and also the United States’ Natural Gas Exchange-Traded Fund (UNG ETF).
Contrarily, her editorial also claimed that the Biden Administration’s impending objective is to rely more on renewable energy sources (solar and wind) by 2050; thus, the EIA affirmed that Natural gas will decline to 34 percent generation in 2022 but renewable energy and coal generation should rise to 22 percent and 24 percent respectively in 2022.

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