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Coal, Gas Supplies Abound Across Our Region as Winter Nears
Posted Thursday, November 12, 2009 ; 06:00 AM | View Comments | Post Comment

If you heat your home more conventionally with natural gas or electric heat that comes from coal furnaces up and down the Ohio River, you can prepare to save some dollars this winter.

Story By Rob Cornelius

Usually it's this time of year when we start burning everything from coal to couches for warmth.

On one hand, neither football team in this great state seems likely to be playing a post-season game that will interest most folks outside West Virginia, so couches and various porch furniture remain safe for now.

But if you heat your home more conventionally with natural gas or electric heat that comes from coal furnaces up and down the Ohio River, you can prepare to save some dollars this winter.

You've seen the headlines. Gas providers like Dominion and Mountaineer Gas have voluntarily dropped their rates for every thousand cubic feet, or MCF, of natural gas you buy to warm the home. After paying as much as $15 for every MCF the past few winters, you will see prices back down in the single digits on the next several bills. Wholesale gas on the national exchanges is down around $4.50 per MCF.

If you could buy gas in sufficient quantity to get that price, it'd be like heating your home in four- or five-day stretches for the cost of a Big Mac Extra Value Meal, possibly upsized.

And still more natural gas is on the way. Storage nationally remains near record highs: 3.8 trillion cubic feet of NG in storage is a huge number, and would probably be bigger had we more storage. Wells here and there are being shut in for the time being; others are drilled and left unfinished until local gathering operations have the capacity to take more gas.

Imagine what will happen when operations here in the Marcellus shale finally are able to crank at the speed and capacity of those in the Barnett Shale near Dallas. That's where this process of multi-stage well fracturing and ultra-deep horizontal drilling first began to hit its stride.

Open the trade papers, and you will see still more places, new shale fields and strata of pay for natural gas. Names like Eagle Ford and Mid-Bossier and those sorts of bends in roads in Louisiana or Arkansas that mean nothing to us are probably the sources of a few more trillion cubic feet.

What does this all mean? To the detriment of the natural gas explorers, it probably means a cap on prices for a while. It certainly was fun to plan for drilling at $10 or $12 gas, but now at $5, the plan has to be how to operate successfully without oversupplying the market.

Some guys work the demand side. That's why I get bulk mail seemingly every day from Boone Pickens and the like, reminding us how cool it would be to drive a natural gas-powered Honda I could fuel up at my house while I sleep.

But telling any American that using more energy is a great thing is a hard sell as governments try to take away our choices, and impugn those who want us to do less or be less.

On the supply side, the technology is there. The natural gas in North America seems limitless. But we've seen a ton of natural gas stories over the years that didn't come true. That's why policymakers are still a little wary of turning this stuff into transportation fuel it seems.

The drillers and guys who supply the rigs will continue to get rich, albeit in boom-and-bust cycles. The folks who build the partnerships and pipelines are getting into the act now, growing and merging and building the infrastructure we need to get this out to market from rural West Virginia.

The best deal is for the consumer. Long term, more natural gas means cheaper everything. And if we can keep the EPA from declaring shenanigans and wanting to review every new hole punched in the ground by a drill, we can all save some money.

The last thing the gas guys want is to be in the same fight the coal industry is -- or perhaps that would bring them all together to fight our oppressors.

Rob Cornelius of Parkersburg writes a column for The State Journal, frequently focusing on energy. His e-mail address is robcwv@gmail.com

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